Mumbai: As the importance of software solutions increasing in the industry, the strategic importance of independent software developers (ISVs) is steadily growing. Today, ISVs are recognized as the important component of the channel community. However, when it comes to healthy business ties between ISVs and channel partners, the current scenario is not very promising.
The survey conducted by the loud Technology Alliance, an industry consortium of ISVs, found that the relationship between far too many ISVs and the channel remains tenuous at best. The study also shed a light on areas where partners and ISVs can improve on collaboration between them.
According to the findings, partners still has very little contribution in ISVs revenue.
Based on a poll of 92 ISVs, the survey said that close to half ISVs said they receive less than 25 percent of their revenue through channel partners. These ISVs are likely in the early stages of launching their products or have optimized for e-commerce.
Though the current state of coordination between channel partners and ISVs is not very favorable, many ISVs have now started to appreciate the role the channel can play in helping them achieve recurring revenues by providing more touch to the end customer. According to the report, both partners and ISVs can make a substantial amount of money if they can work more collaboratively.
Creating a channel program and recruiting and managing channel partners is hard
work, but very rewarding when done right. Recruiting the right partners and improving their partners’ technical competencies are the top two channel goals for ISVs. Similarly, improving how we sell vendors’ solutions, becoming technically competent on vendors’ solutions and selecting the right vendors are some of the pain points of channel partners while working with ISVs.
Channel conflict is one area that needs constant attention. Another area of potential misalignment and missed expectations is who holds responsibility for customer renewals. Channel partners believe that they should be responsible for customer renewals, while only ISVs give their partners any responsibility for customer renewals.
The last area where there can be better alignment between ISVs and their channel partners is the investment in channel management resources. ISVs believe that having dedicated partner management resources is not a factor in how the channel selects vendors, whereas channel partners place a lot of emphasis on this.
It is a best practice to clearly spell out expectations when it comes to ISVs working
with the channel. ISVs expect channel partners to be self-sufficient to close up-sell opportunities and renewals. It is a best practice for ISVs to provide their channel partners with extra incentives to register deals in advance. The channel partners protect themselves from potential competition, while the ISV gets potentially better visibility into the forecast, the report suggests.