Customers Now Want Their Apps Hosted

We continue on a daily basis seeing more and more ISVs looking for a way to offer their customers a hosted version of their application.  The good news is customers are willing to pay to have their applications hosted. It’s no longer a trend or fad but a significant segment of application sales and any software vendor who’s not on board is missing the boat.

A New Source of Revenue For ISVs

Customers understand that there’s a cost, and generally more than projected, for an in-house implementation and ongoing management of an application. If this is for a small or specialized group of their users the costs can be even higher since the cost is effectively spread across fewer users or cost centers which makes a hosted application very appealing since they know their true cost up-front and they generally have a lower up-front cost.

Not Hosting Just Anywhere But Partnering With A Cloud Service Provider

Smart ISVs are selecting an application hosting partner to manage the hosting and in many cases selecting a “white labeled” solution so the software vendor can sell the hosted app as their own branded solution.  The key here is to control the hosting by partnering with a Cloud Service Provider that specializes in application hosting and counting on the CSP to manage the environment while the ISV manages the App and their customer support.

I recently had an ISV tell me he wanted to host their app for customers on Amazon so he could have control of the hosting.  He didn’t realize that “control” was really the burden and headcount of an Amazon trained engineer who would have to manage the implementation with customer networks as well as all the Amazon resource costs.  In the end, he concluded this would be more expensive and a distraction for his business and support team.

Select a Cloud Service Provider and Not an IaaS Provider

There is a HUGE difference.  Yes, the Cloud Service Provider provides the infrastructure too but also the provisioning and management of users and applications.  IaaS providers usually draw the line at providing compute power for rent and leave the customer to set-up and manage the whole environment.  A CSP provides all the set-up, provisioning, and management of the day to day operations and back-up of a multi-tenant Cloud and takes this responsibility off the back of the ISV’s support organization.  This gives the ISV’s support team the ability to focus on supporting their App and not the infrastructure.