It’s impossible to generalize the impact that the pandemic has had on all cloud ISVs. How your software business is doing in 2020 directly relates to the products you offer.
Cloud ISVs, Dialed In
After the initial shock of shutting down the economy to slow the spread of COVID-19, some software developers began to realize the pandemic created a tremendous opportunity. Chacon says that “businesses that support businesses” grew, such as ISVs that provide video conferencing, remote access, document sharing and collaboration solutions.
“Cloud technology has been around for years, but people are now asking how they’d live without it,” he comments.
Cloud ISVs also experienced growth if they had solutions that could help consumer-facing businesses navigate the crisis. Examples are software developers that had answers for restaurants and retailers looking for ways to enable online ordering, mobile payment and curbside pickup.
Manufacturers have also accelerated their cloud roadmaps to sustain productivity and efficiency with smaller staff or remote workers. In 2020, they’re deploying solutions designed for remote monitoring, automation, and data collection and tracking via the Internet of Things (IoT).
Businesses across the board are looking for solutions that support safe social distance, both for customers and employees. Cloud applications feature work- or shop-from-anywhere functionality, with the added benefits of easier deployment and implementation. Furthermore, cloud apps can be used on customer’s personal devices, minimizing a business’s need to disinfect shared tablets, kiosks, or PIN pads.
Dialed Back
Chacon says while some software developers onboarded scores of new users, others, such as those that develop products for table service restaurants, travel or entertainment, saw business bottom out.
“These ISVs aren’t expanding,” he says. “They’re regrouping to focus on functions that will help people adapt to new regulations and changing market dynamics.” For example, he says he recently spoke with an Epson partner who is releasing a remote ordering and curbside pickup app to extend the functionality of his point of sale solution.
Chacon adds that integration activity is limited. “Before the pandemic, everyone wanted to integrate with everyone. Now, ISVs are more selective. They need to focus on core functions before expanding partnerships,” he says.
ISVs responding to the crisis with new development recognize they’re taking on risk. “Any time there’s turmoil, businesses have to weigh the short-term impact against long-term relevance. They wonder if they’ll get a return on their investment,” Chacon says.
Some cloud ISVs are looking at acquisition. “VCs are more willing to take the risk,” Chacon explains. “The question is whether being acquired by a larger entity will best serve an ISV’s application, but sometimes they don’t have a choice. If their products will continue, they need deeper pockets to support them.”
Write the Conclusion You Want
Whether, as Chacon says, you are “seeing the light or feeling the heat,” you ultimately control how the 2020 chapter of your business will read.
Chacon says it’s important to understand your customers’ pain points and how you can best address them. For example, finances are a concern across the board, so they may be looking for an OPEX instead of tying up capital in technology.
Cloud software developers and their channels may also find opportunities by offering new services that are now in demand, such as wireless networking and managing databases.
There are questions, however, related to how large this market will be moving forward. Unlike the growth of the past five or 10 years, businesses are closing, and the time it will take the restaurant or entertainment industries to recover is uncertain.
This can lead to a more competitive environment for developers. “Unless you develop one-of-a-kind software, ISVs who adapt fastest and can support their applications will get in and win for the long haul,” Chacon concludes.
