I got the burst and desire to write this blog entry after having read an article about Microsoft and Toyota forming a partnership to develop new IT-based services for electric vehicles when to recharge. Think about it. In the future, the cloud will become the place that connects devices and vehicles and if this is not an opportunity for ISV’s, what is? Also, when you add mobile solutions to this formula of the cloud, you have something that can become big and create a new market for the ISV.
I will never forget the day when I was sitting in an advisory panel with other software executives when one of the participants from a large software company suddenly said with a loud voice to the entire group: you are looking at your business inside the box, not from outside. That was the first time when I had a real wakeup call how the cloud can change not only our lives, but also how products are innovated and how we can make a difference with software.
The cloud has unfortunately lots of hype around it, but many Independent Software Vendors (ISV’s) such as M-Files (Motive Systems) has taken Microsoft Azure as an enabler of new opportunities and not just as an “object for migration”. M-Files is the first Document Management Solution that is built using Windows Azure as the foundation with tens of thousands of users around the world. Windows Azure provides a scalable and robust platform for an ISV to build solutions that can be distributed around the globe.
Anybody can migrate to the cloud, but the winners are the vendors that really look at the current business model and make something bigger of it like what M-Files decided to do. As a software vendor, M-Files will rely upon Microsoft to build data centers and infrastructure to these centers and the role of M-Files will be to innovate on top of this infrastructure. Windows Azure and SQL Azure are part of a Platform-as-a-Service environment (PaaS), but without an application Windows Azure is just infrastructure and there is nothing that you can do with it. Microsoft relies on Independent Software Vendors (ISVs) to build applications that can then be deployed to the Azure cloud and be part of the Windows Azure Marketplace or Windows Azure DataMarket with the possibility to accelerated sales. Other solutions such as Dynamics CRM 2011 Online are positioned to another category (SaaS) and can be consumed “as is” or by customization by the company or a System Integrator (SI).
ISV’s are living in turmoil. Some of them have built solutions for years with an architectural model that will be hard to move to any cloud infrastructure even if there was a desire. There are many alternative ways to make the transition, and one of them is to do a gradual move by building extensions that utilize the cloud and this gives the ISV the taste of the cloud and what it really is to develop to that environment. Sometimes the architectural model just is meant to be for the cloud and those are the lucky ones that are typically in the minority.
Having travelled the world, having seen hundreds of ISV’s, I am convinced that the ones that do not even have a transition plan will have huge issues going forward. I have analyzed the situation from System Integrator (SI) and Independent Software Vendor (ISV) perspective and I have to say that both groups will benefit from the cloud if positioned correctly. The former can serve the latter in the transition and the latter should be thinking and innovating outside the box. Think big, do not think about migration, but think about things that you were not able to do in the past that you can do now. Ulf Avrin provides advice in his blog entry in the transitioning to the cloud and what types of changes one can expect in the transition.
Do you have a transition plan in place and are you going to benefit of the cloud?