Sharing special secrets

Though the independent software vendor (ISV) market is showing fast-paced growth both locally and globally, it certainly has not reached its optimum in terms of operational excellence. Here, some of the bigger players in the software development space share secrets that would put our software vendors on par with the rest of the world.

Multinational software vendors are constantly trying to better their partner programmes as it has become evident that the success of such vendors can easily be measured by the successes of their ISVs.

In SA, the development of such partner communities has gone a long way in structuring the way in which vertical markets operate. Certain standards have been set to ensure what competencies ISVs should have before qualifying for partner status.

The challenges the software industry faces - continuous change, rigorous competition, financial pressures and unpredictable threats - have increased the need for on-demand applications and highlighted the importance of ISVs and the technology gaps they fill.

ITWeb explored the conditions for local ISVs through their multinational software partners, in an effort to further understand what can be expected for this fast-growing sector. We looked at the kind of support the sector is given locally and different software vendors` strategies for their ISVs.

Many ISVs start off as development houses boxing solutions and looking for a space in which they can make their mark and develop themselves as competitive players in the industry.

The challenge is to encourage ISVs and the local software market to grow and achieve a balance between software consumption and production.

Danny Naidoo, developer and platform group director, Microsoft

Microsoft refers to this vertical as the local software ecosystem (LSE) with ISVs being the cornerstone. With over 500 ISVs in its partner network, the multinational estimates that a developer in the ISV economy on average contributes in excess of R750 000 per annum towards the sustainable growth and development of the sector, thus positively impacting the economy.

The challenge is to encourage ISVs and the local software market to grow and achieve a balance between software consumption and production, says Danny Naidoo, developer and platform group director at Microsoft.

"We have seen a strong move to international projects and initiatives being driven out of SA. This boundary-less way of transacting has seen our local ISVs generate close to R5 billion in revenue, both locally and internationally," he explains.

Another contributing factor to ISVs making such a large contribution is the ability to adapt and act as integrators, says Gary Carroll, director of IBM SMB for South and Central Africa.

"ISVs are solving problems and finding players in the market to assist in delivering a total solution. The importance of ISVs has accelerated, because the mid-market in SA is not dominated by one player, although SAP and Oracle do maintain a large mind share in any country, including our own."

He says 34% of ICT expenditure worldwide is devoted to ISV applications and solutions with integration accounting for 30%, resulting in a substantial opportunity to work with ISVs.

Vendors are constantly improving their ISV strategies in an effort to stay in line with trends, adapt to growth and changes in the local market and to further assist their partners to attain new business.

Oracle prioritises ISV interaction with customers as this ensures they are constantly aware of market needs and possible business, says Bev Scott, ISV channel manager at Oracle.

The multinational encourages diversity through 'triangulation`, the forming of small consortiums consisting of a systems integrator, Oracle and another partner. "These are easier to grow and manage and also give customers freedom of choice," she explains.

Oracle says it cannot be prescriptive in the way its partners run their businesses, but trusts that developing companies that grow Oracle business is becoming easier.

"Communication is key; there are challenges for ISVs to stay in business and our job as developing houses is not to manage the ISV`s business but to manage the business relationship we have with the ISV."

With more than 60 ISV partners, Microsoft goes a step further and includes a business-mentoring component in its ISV empower programme. This is aimed at giving ISVs insights into running a successful business.

"This has been particularly beneficial for start-ups," says Naidoo. "The ISV element of our partnership programme has been fully operational for the last three years and is supported by the innovation centre for ISVs in Africa which is based in Durban."

The centre will allow for African ISV businesses to design and build software products using Microsoft technology, gleaning guidance from Microsoft personnel, he says.

There is a plethora of mid-market ISV players in the local market whose packages suit the South African environment, and IBM has forged relationships with 25 of them. "As more organisations switch to solutions, opportunities for these players will increase, particularly as ISVs transform their own operations to be more responsive and enhance their solutions to drive businesses. Applications such as supply chain management and customer relationship management will continue to be key drivers and present significant opportunities to grow and participate in the local market," says Carroll.

This potential is further recognised in the general belief that there are no limits to the potential that can be reached by the South African ICT market and that local organisations and individuals have an immense capacity and ability to accomplish great things.

Microsoft echoes this sentiment. "We believe that there is capacity in the local market to double the number of ISVs developing software both locally and internationally - making a meaningful and significant contribution to the GDP of the country," elaborates Naidoo.

With this, Microsoft is referring to the enhancement of skills and capabilities among ISVs and the developer community. "We are also working with ISVs to leverage Microsoft`s channels to market. These include the channel builder programme, and early adopter programme, which provides partners with access to technology that is being developed two years before it is made available to the general public and engagement on the knowledge interchange in conjunction with the product teams worldwide."

In our young economy there is still a lot of ground that has not been covered by the software industry, says Scott. "South Africans are entrepreneurs and successful ISVs will maintain that pioneering environment. There are plenty of growth opportunities still available, particularly in the health, banking, insurance and telecommunications spaces."

It has been said that technology, in its own way, has shrunk the world. It has allowed innovators to showcase their talents to markets they would have never been able to reach otherwise.

There are challenges for ISVs to stay in business and our job as developing houses is not to manage the ISV`s business but to manage the business relationship with the ISV.

Bev Scott, ISV channel manager, Oracle

SA, as a growing economy, is seeing a large growth in such innovators and through technology has been able to let the world know of its capabilities and strengths. 

But policy changes in the local market are required to support the ISV industry, including the revision of South African patent laws.

A framework for ISV-type business should be developed, suggests Microsoft`s Naidoo. "Venture capitalists are currently reluctant to invest in software locally and through the creation of a framework of incentives and a programme of rebates for local patents, this will go a long way to changing this investment climate. It will encourage venture capitalists to enter the local market," he explains.

Microsoft says it is working with venture capitalists to understand the opportunities that exist in the local market, and will continue to encourage any other venture capitalists that are interested in pursuing such opportunities.

With most local ISVs already playing in the global space, or showing great potential to do so, foreign investors are showing more and more interest in not only bringing new technology to South African shores but also learning from local innovators and entrepreneurs.

"A lot of the smaller development companies have realised that one of the keys to fast and systematic growth is aligning one`s company with a vendor to increase reach and potential. They also need to look at what is out there in terms of open standards, utilise the resources offered by the vendor and make sure they deliver to build credibility," advises Oracle`s Scott.

IBM partner initiatives

February 2005: Opening of more than a dozen new IBM development centres in China, Brazil and Russia in an effort to accelerate innovation around the adoption of open standards based solutions in emerging markets.

* The innovation centres provide developers and business partners with easy access to IBM`s technical skills, resources, and business expertise to help them build, deploy and optimise customised solutions based on IBM`s open middleware and hardware technology.

* New centres serve as a resource to the broadest ecosystem of IBM business partners including venture capital firms, local ISVs, regional systems integrators and individual developers.

May 2005: IBM unveils resources to help ISVs develop and adapt business solutions such as accounting, human resources and ERP.

* ISVs are provided with technical, sales and marketing resources to more easily plan, build and transition to a services delivery model.

* New tools and resources are provided to help more ISV partners easily transition to a services delivery model.

* Software as Services Showcase is unveiled as an online directory, which allows customers to search for ISV solutions that are available to them as a service.

* Showcase includes ISV solutions that span a range of solution areas - compliance, human resources, CRM - in addition to specific industries, such as retail and insurance.

* More than 40 solutions from 20 ISVs are listed in the showcase.

August 2005: New IBM initiative to help start-up companies in emerging markets to more quickly and easily develop solutions based on open standards technology.

* Developers get instant access to IBM hardware and software portfolio, free of charge.

* Plans to roll-out more than 40 different virtual enablement workshops through the IBM virtual innovation centre.

Microsoft showcases partner successes

August 2005: nVisionIT, a solutions innovator for the enterprise, puts in a noteworthy performance at Microsoft`s annual partner summit.

* Award for best custom development solution is secured, while it was a finalist in an additional two categories, those of information worker and integrated e-business solutions.

November 2005: Mint becomes longest standing African member of the Microsoft partner advisory council (PAC) for collaboration and portals through its reappointment to the council.

* The PAC programme was started in 1996 and has grown to a total of about 20 PACs, covering the entire Microsoft spectrum of products and major events.

* Microsoft product groups aim to interact with selected partners who have substantial product implementation and development experience.

ISVs innovating on Oracle platforms

November 2005: Oracle announces seminars on Oracle Database 10g and Oracle Fusion Middleware 10g specifically tailored to ISV community.

* Sessions are designed to provide ISVs with knowledge and skills they need to utilise Oracle technology.

* Content ranges from high-level overviews to in-depth technical training sessions.

Oracle partners with IBM

December 2005: Oracle joins the IBM AIX collaboration centre as a founding partner.

* Oracle developers will work closely with IBM to integrate Oracle applications with current and upcoming versions of AIX 5L, and will continue to deliver Oracle applications on AIX concurrent with their availability on other platforms.

* Customers to benefit from greater exploitation of each platforms leadership features including virtualisation, security and cross-platform portability.

* Today, Oracle and IBM share more than 11 000 customers.