Sharon Lee ISV Community Lead

Happy New Year, Partners! For me, 2016 was a year full of opportunities to work closely with many ISV partners. Throughout the year, I had the pleasure of seeing several of those partners realize their goals of completing their applications, building new partnerships and channels, and get recognition for their solutions with Microsoft and customers.

For 2017, I have five trends and ideas for building a successful, profitable ISV business to share with you.

1. The definition of the independent software vendor (ISV) is broadening

The cloud has helped remove cost and scale as barriers to innovation. Today, the partner landscape is increasingly filled with hybrid cloud-enabled business models. Partners with cloud application development practices have emerged to compete with ISVs.

Increasingly, I am seeing all types of partners – Managed Service Providers, Value-Added Resellers, Systems Integrators – developing their own packaged intellectual property (IP) and delivering services around a software-as-a-service application.

2. Start now to make your business cloud ready

As more new business forms emerge, many partners are realizing that the changes required in other areas of the business to help support this move to the cloud such as talent readiness, sales and marketing, and customer support are more complex and harder to execute than the technical aspects of cloud transition.

We have developed an analyzer to help you assess your state of cloud business model readiness. Take 15 minutes to complete the assessment about your business, then watch our on-demand webcast to learn how you can develop your cloud business model in 100 days through 1:1 coaching.

3. Implement intellectual property (IP) in your cloud offerings

According to our research surveying partners with a cloud application development practice, here are the top five IP services most commonly offered:

  • Industry-specific workflows
  • Customer self-serve portals
  • Vertical-specific functionality
  • Industry-specific mobile apps
  • E-commerce functionality

Productizing IP and creating repeatable processes has been a successful strategy for many partners. If you don’t want to create your own IP, you can look to the Microsoft partner ecosystem for incremental solutions that can be bundled with Microsoft offerings to round out your total solution or work with partners who can help you identify and build your cloud IP proof of concept. Many partners that have a cloud application development practice offer proof of concept services.

4. Seize the opportunity in managed services

Offering Microsoft Azure managed services can provide partners with additional recurring revenue streams. With the Microsoft Cloud Solution Provider (CSP) program, Microsoft partners can offer managed services for Microsoft cloud products including Office 365, Enterprise Mobility + Security, and Microsoft Dynamics CRM Online.

Based on the same survey of partners mentioned above, the top five most commonly offered managed services are:

  • Application lifecycle management and support
  • Application support/help desk
  • Configuration management
  • Reporting and analytics
  • Single sign-on management

In 2017, make joining CSP one of your goals so you can deepen your customer relationships, earn higher margins, and unlock portfolio opportunities with cloud managed services.

5. Achieve scale with partners

More ISVs are recognizing that reseller partners can help them achieve scale. They are making the transition from a direct-to-customer model to a through-partner-channel model. If you’re interested in building a reseller channel for your solution, it is important to create simple SKUs that can be easily resold, and to educate VARs on how to sell your product to customers.

Partnering with Managed Service Providers is also proving valuable for ISVs. Cloud MSPs can help you handle ongoing customer support services that come with cloud adoption such as consulting, migrations, and operations management.

Azure MSP functional support

To identify prospective partnerships that will help you meet customer needs, the Microsoft Partner Center has detailed information about partners. Other ideas include joining the US Partner Community Yammer network and attending Microsoft Inspire, our annual worldwide partner business and sales conference, this July in Washington, DC.

Whether you are an ISV or a partner with a cloud application development practice, we want to help you succeed. Connect with me by email at, on Twitter (@whatsup_sharon), on LinkedIn, and on Yammer.

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