Trace Id is missing
Hero

Cloud computing for independent software vendors (ISVs)

Learn how cloud computing helps ISVs scale, save, perform, and innovate.
Explore solutions

Cloud computing definition

Cloud computing services deliver computing services—such as storage, processing power, and applications—over the internet, giving users the ability to access resources on demand without the use of physical infrastructure.

For independent software vendors (ISVs), cloud computing is a crucial component of their business. It allows them to quickly deploy, scale, and update applications without having to invest in hardware. Cloud services also provide ISVs with built-in security and compliance capabilities, allowing them to focus on innovation.

ISVs create and sell software products that are compatible across a variety of hardware platforms and operating systems. These solutions typically solve specific customer problems, such as managing sales or financial data, as well as specific infrastructure needs, such as supporting data storage, security, or authentication requirements.

Key takeaways

  • Get an introduction to cloud computing's role in the ISV market.
  • Learn more about the scalable, flexible features that cloud computing has to offer.
  • Explore the significant financial benefits of cloud computing.
  • Discover how ISVs can benefit from the cloud’s reliability features. 
  • See how cloud computing helps ISVs drive innovation and agility.
  • Explore strategic considerations for cloud adoption—and learn to plan for a smooth transition.

Overview of cloud computing in the ISV market

As the technology landscape continues to evolve at a rapid pace, ISVs must take initiative by enhancing their agility, reducing costs, and prioritizing digital transformation—which is why more and more organizations are now migrating to the cloud. 

Cloud platforms streamline software delivery by allowing for easy updates and seamless user access, regardless of location. With on-demand access to scalable resources, ISVs spend less time managing infrastructure and more time innovating on high-quality software. This shift enhances collaboration and supports continuous integration and deployment practices, allowing ISVs to scale their apps to meet demand and accommodate growth.

Why this matters for decision-makers

For business leaders looking to stand out in an increasingly competitive market, the benefits of cloud computing services for ISVs are unparallelled.

For digital native ISVs, cloud computing facilitates rapid prototyping and deployment. As a result, ISVs can bring new ideas to market faster without significant upfront investments. The ability to stay agile and move quickly can help ISVs differentiate themselves in a crowded market and attract early adopters.

For all ISVs, cloud technologies can help modernize legacy systems, optimize expenses, and streamline operations. By gaining access to cutting-edge tools and processes, ISVs can innovate faster than ever before. Cloud computing also facilitates data-driven decision-making through advanced analytics, giving business leaders greater insight into costs, resources, and operational efficiencies.

Cloud scalability and flexibility for ISVs

Adapting to market demands

With cloud computing, ISVs can dynamically adjust their resources based on real-time market demands. By taking advantage of the elasticity of the cloud, ISVs can continuously monitor application performance, scaling resources up or down when needed. This flexibility prevents costly over-provisioning, where excess resources lead to unnecessary expenses. It also reduces the risk of underutilization, ensuring that ISVs maintain optimal performance and customer satisfaction.

The ability to expand

For ISVs aiming to expand into new markets, cloud computing services offer significant advantages. With cloud computing, ISVs can quickly provision additional resources to support increased demand, ensuring seamless performance as they attract more users. This agility allows for rapid experimentation and deployment of new features tailored to specific market needs, facilitating faster entry into diverse regions. The cloud's pay-as-you-go model also eliminates the need for hefty upfront investments in hardware, giving ISVs the ability to allocate resources strategically and efficiently.

Innovative business models

Cloud services significantly support the development of flexible business models like software as a service (SaaS), which allows ISVs to offer subscription-based services and pricing. SaaS cloud solutions not only foster ongoing relationships with customers through regular updates and support, but also allow ISVs to gather valuable usage data and feedback, adapt to changing customer needs, and drive greater customer satisfaction while also stabilizing revenue flows over time.

Cost efficiency

Reducing expenditures

Cloud computing offers significant financial benefits for ISVs by dramatically lowering the need for upfront investments in physical infrastructure. Instead of purchasing and maintaining expensive servers and hardware, ISVs can use cloud services on a pay-as-you-go basis. This model minimizes financial risk, allowing ISVs to scale their resources as they grow. The cloud also further reduces ongoing maintenance expenses and IT staffing needs, freeing up resources that can be reinvested into the business.

Optimized operational costs

Cloud services' pay-as-you-go pricing structures gives ISVs the ability to manage operational expenses more effectively by optimizing operational costs. Thanks to this flexible billing model, ISVs only pay for the resources they consume, eliminating the financial burden of underutilized infrastructure and reducing the risk of over-provisioning.

As ISVs scale their operations, they can also adjust their resource allocation without incurring fixed costs. This adaptability not only supports budget management but also provides the financial agility necessary for responding to market opportunities.

Access to advanced tools at lower costs

Cloud platforms offer cost-effective access to advanced tools like AI, machine learning, and big data analytics. By providing these state-of-the-art tools as part of their service offerings, cloud providers give ISVs the ability to incorporate AI-powered features and analytics into their apps, delivering valuable insights to users. As a result, ISVs can innovate more rapidly, driving business growth and improving customer experiences, all while minimizing costs.

Reliability and performance

High availability and disaster recovery

Cloud providers offer robust infrastructures that guarantee high availability, data redundancy, and effective disaster recovery. Geographically distributed data centers support automatic failover and load balancing, which in turn, minimizes downtime. Data redundancy is also built into their systems to protect against data loss, while comprehensive disaster recovery solutions allow ISVs to quickly restore services in the event of an emergency. 

By delivering these essential features, cloud providers help ISVs uphold reliability and performance standards, fostering confidence and long-term loyalty among customers.

Global reach and local performance

By strategically positioning data centers around the world, cloud providers give ISVs the ability to deliver high-quality services to a geographically diverse customer base, in turn reducing latency and improving load times. This geographical distribution ensures that customers receive faster response rates and a more reliable experience, regardless of their location. 

Localized data centers also help ISVs comply with regional data regulations and privacy laws, further bolstering their ability to serve customers effectively. As a result, ISVs can expand their reach into new markets while maintaining a high standard of service, fostering customer satisfaction and loyalty across diverse demographics.

Strengthened security and compliance

Cloud platforms offer built-in security features that are vital for ISVs managing sensitive data or operating in highly regulated industries. These platforms incorporate advanced security measures such as encryption, access controls, and intrusion detection systems. Regular updates and patches are automatically applied, helping to safeguard against emerging threats. Most cloud providers also comply with industry standards and regulations, which offers ISVs the necessary frameworks and certifications to meet legal requirements.

Driving innovation and agility

Accelerating development and deployment

For ISVs, cloud environments facilitate faster app development, testing, and deployment, in turn driving innovation. With access to scalable resources and development tools, ISVs can rapidly set up and tear down environments for coding and testing, eliminating the delays associated with traditional infrastructure provisioning. 

Cloud platforms also support continuous integration and continuous deployment (CI/CD) practices, allowing teams to automate testing and streamline the release process, ensuring that new features can be delivered quickly and reliably.

Emerging technologies

Cloud platforms provide ISVs with seamless access to emerging technologies such as AI, machine learning, natural language processing, and image recognition. By offering a suite of tools and services, including pre-built APIs, cloud providers give ISVs advanced capabilities that don’t require extensive development. Internet of Things (IoT) frameworks also give ISVs the ability to connect devices, collect data, and analyze that data in real-time, in turn accelerating the development cycle.

Agile and DevOps practices

By providing shared platforms and resources accessible to all team members, cloud environments foster real-time collaboration among developers, testers, and operations, breaking down silos that can slow down the development process. Automation tools streamline workflows, facilitating continuous integration and continuous deployment (CI/CD) practices that allow for rapid iterations and timely feedback loops. This agility gives ISVs the ability to quickly respond to changes in user requirements and market conditions, accelerating the delivery of high-quality products. 

Cloud environments also include integrated monitoring and analytics tools that can help identify issues early in the DevOps cycle, further enhancing product reliability and customer satisfaction.

Strategic considerations for cloud adoption

Evaluating cloud strategies

When evaluating cloud strategies, you’ll want to choose the right cloud model for you, one that aligns with your specific business and data needs, including cost considerations and workload types.

ISVs should consider the following cloud strategies and models when looking into adoption:
Public cloud
ISVs should consider a public cloud strategy if they need: 
  • Rapid market entry that will allow emerging ISVs to quickly deploy services without heavy infrastructure investment.
  • Variable workloads that can scale up and down, depending on fluctuating demand.
  • Limited IT resources to save on management overhead. 
  • Cost-efficiency through pay-as-you-go pricing. 
  • Fast innovation by accessing the latest technologies.
Private cloud
ISVs should consider a private cloud strategy if they need:
  • Enhanced security and compliance control for sensitive data. 
  • Custom requirements when specialized performance or custom configurations are essential.
  • Stable workloads for predictable, high-demand applications where performance consistency is needed.
  • Long-term cost management through predictable spending. 
Hybrid cloud
ISVs should consider a hybrid cloud strategy if they need:
  • Mixed workloads that incorporate elements of the private cloud as well as the public. 
  • Development environments for testing applications in the public cloud while maintaining production in private.
  • The ability to rapidly scale up or down without sacrificing control over sensitive data.
  • Flexibility to optimize costs and performance across environments. 
Multicloud
ISVs should consider a multicloud strategy if they need:
  • To avoid vendor lock-in. 
  • Diverse requirements for different applications that are best served by different cloud providers.
  • The ability to target multiple geographic markets and accommodates region-specific compliance or performance requirements.
  • Increased flexibility and agility in selecting the best services for specific needs. 
  • Enhanced innovation through diverse tools and technologies across providers.
Managing cloud costs and resources
To prevent overspending—and to maximize return on investment—effectively managing cloud expenses is a crucial priority for ISVs.

Here are some best practices:
  • Use cost-management tools. Use cost-management and budgeting tools to proactively track spending and identify cost-saving opportunities. 
  • Optimize resource allocation. Analyze, identify, and right-size underutilized or idle resources either manually or through auto-scaling features, in turn reducing unnecessary costs.
  • Implement tags and labels. Use tagging and labeling to categorize resources by project, team, or environment, providing greater visibility into spending. 
  • Adopt reserved instances or savings plans. Purchase reserved instances or savings plans, which offer significant discounts compared to on-demand pricing, for predictable workloads.  
  • Monitor and analyze usage. Conduct regular reviews to assess spending trends—and adjust strategies accordingly.

Planning for a smooth cloud transition

A successful cloud migration requires careful planning and strategic execution, especially if you’re looking to minimize operational disruptions and maximize the benefits of cloud adoption. 


Here are some key phases to consider:

  1. Start your assessment. Conduct a comprehensive assessment of your current infrastructure, applications, and workloads and identify which systems to migrate.
  2. Choose the right cloud model. Decide between public, private, hybrid, or multicloud based on business needs and application requirements. 
  3. Develop your migration strategy. Select an appropriate migration approach—lift-and-shift, re-platforming, or refactoring—based on your goals and the specific needs of your applications. Create a roadmap that delineates the phases of migration and clearly defines roles and responsibilities within your team. 
  4. Plan the architecture. Prepare your applications for the cloud. Plan your data migration, including data integrity, storage solutions, and backup strategies.
  5. Establish governance and security protocols. Implement security and compliance measures to protect sensitive data, ensuring that data encryption, identity management, and compliance controls are in place. 
  6. Prepare your team. Provide cloud training for your team on new tools, technologies, and best practices so that the transition goes smoothly.
  7. Test and validate. Conduct a pilot migration to identify issues before full migration, testing for performance and security. 
  8. Execute migration. Stick to the established migration phases, monitoring progress and adapting as necessary.
  9. Monitor and optimize. After the migration is complete, closely monitor performance, analyze usage patterns, and optimize applications. To evaluate the success of the migration, refer to your KPIs. 

Conclusion

Summary of cloud benefits for ISVs

The advantages of cloud computing are myriad for ISVs looking to adapt to change, stand out, and drive long-term growth. Some of the top cloud benefits for ISVs include:  
  • Unparallelled scalability. With cloud computing, ISVs can easily handle fluctuating workloads by adjusting resources based on demand, allowing for rapid expansion across markets as well as the fostering of innovative business models, such as SaaS. 
  • Cost efficiency. By reducing capital expenditures, optimizing operational costs, and providing access to advanced tools at a lower cost, cloud computing offers significant cost saving to ISVs of all varieties. 
  • Reliability. Cloud computing provides high availability, data redundancy, and robust disaster recovery options for ISVs, ensuring their operational continuity while also maintaining trust among users. 
  • Tools for innovation. ISVs can stand out from the competition by using CI/CD practices, accessing advanced technologies such as AI, and supporting agile and DevOps practices that foster rapid experimentation. 

What this means for decision-makers

For business decision-makers, adopting the cloud is a sure-fire way to achieve long-term success in any industry. For digital native ISVs, cloud computing streamlines the development process and fosters easy collaboration, allowing ISVs to bring high-quality products to market faster. All ISVs benefit from access to new and cutting-edge tools, which modernizes their systems and optimizes cost. 

By adopting the cloud, ISVs can meet user expectations—while competing and thriving in a changing market.

Start your cloud journey today

If you’re a decision-maker, you’ll want to consider cloud computing as a pivotal part of your strategic growth plans. Don’t let lack of hardware or outdated systems hold you back from innovation— experience unparallelled scalability, enhanced collaboration, and streamlined operations by embracing the transformative potential of the cloud. 

Assess your current infrastructure—and set your organization on the path to sustainable, long-term success.
R background
Resources

Additional resources for ISVs

Explore tools, resources, and best practices designed to help ISVs succeed on Azure.
R1
Resources

Accelerate growth with ISV resources

Learn how to build, sell, and thrive as an ISV partner with the help of online courses, research, and case studies.
Learn more
R2
App advisor

Get the guidance you need when you need it

Stop searching and start doing with a self-guided experience that surfaces the latest resources and recommendations based on your current development stage.
Learn more
R3
Personalized guidance

Transform your development experience with ISV Success

Build and publish your apps faster with exclusive benefits, including AI services, consultations, and developer tools.
Learn more

Frequently asked questions

  • Cloud computing delivers computing services, such as storage, processing power, and applications, over the Internet, giving users the ability to access resources on demand without the use of physical infrastructure. 

    For independent software vendors (ISVs), cloud computing is a crucial component of their business. It allows them to quickly deploy, scale, and update applications without having to invest in hardware. Cloud services also provide ISVs with built-in security and compliance capabilities so they can focus on developing new software. The cloud computing benefits for ISVs are unparalleled.
  • By providing on-demand access to flexible and scalable resources, cloud computing gives ISVs the agility to adjust their computing power, storage, and other services based on fluctuating demand. As their services grow, ISVs can rapidly deploy additional resources or features, ensuring optimal performance and user experience.
  • Cloud providers often maintain compliance with industry standards and regulations, helping ISVs meet legal and security requirements more easily. Regular updates and security patches are also typically managed by the provider, ensuring that systems remain protected against emerging threats. This layered security approach allows ISVs to focus on developing their software while benefiting from enhanced protection and reduced risk of data breaches.
  • When planning a cloud migration, ISVs should consider several key phases. First, they’ll need to assess their current infrastructure and applications to identify which components are suitable for migration and how they will integrate with cloud services. They should also develop a clear migration strategy that includes timelines, resource allocation, and risk management to minimize downtime and disruption. Training for staff on new cloud technologies and ongoing maintenance plans are crucial. And finally, ISVs should consider the long-term implications of cloud usage, including cost management and performance monitoring, to optimize their cloud environment for future growth and innovation.
  • Yes. Cloud adoption for software vendors provides organizations with the infrastructure and tools necessary to modernize outdated systems. By migrating legacy applications to the cloud, ISVs can take advantage of cloud-native services, such as microservices architecture, APIs, and containerization, as well as modern technologies such as AI and analytics. 

    Accelerate your modernization with Microsoft by accessing the most advanced suite of AI development tools on the market. 

    Learn more