Independent software vendors (ISVs) and software-focused original equipment manufacturers (OEMs) are assessing alternative routes to market. Recently, it has become more apparent that these companies lack the in-house technical scale to sustain building hardware. Arrow delivers an integrated hardware/software solution for those ISVs and software OEMs that provide proprietary hardware.
In the current business landscape, there is a movement seeing companies take stock of their go-to-market models, exploring new opportunities to create value and promote growth. As companies embark on this journey, they are considering a variety of software delivery models with anything from shedding hardware to taking a software-as-a-service (SaaS) subscription approach to delivery. The one emerging trend is a transition to a software-centric business model that offers a set of elements to help businesses to capitalize on growth opportunities, meet new customer demands and enhance their financial trajectory.
As a result, many independent software vendors (ISVs) and software-focused original equipment manufacturers (OEMs) are assessing alternative routes to market. They have offered customers several buying scenarios from perpetual licensing, guided hardware, and reference architecture support to developing purpose-built hardware appliances to bundle with their software packages. However, with recent economic events, it has become more evident that many of these companies lack the in-house technical scale to sustain building hardware internally. It is also less palpable for them to use their limited resources to manage hardware directly and continue to achieve growth. Indeed, suppose ISVs were to shift to concentrate on their core software competency. In that case, they could establish a recurring revenue structure that brings several benefits attractive to investors, organizations, and customers alike. Positive and predictable cash flow is one advantage. With it comes deep data insight that acts as a catalyst for more insightful investment and rapid scaled growth in line with customer base increases.
Many software companies transitioning to an ISV model do so while concurrently redefining how to sell their software. Although ISVs primarily focus on software, the right hardware remains critical in delivering solutions. More and more businesses are opting to transfer hardware management to a specialized solution provider that assumes the control and financial implications of the hardware. In fact, according to Forrester, the number of ISVs is expected to reach 1 million by 2027, an indicator in line with the growing shift toward software-centric business models and the call to differentiate and deliver increased value to customers.
Delivering an integrated hardware/software solution based on a leading technology provider’s hardware platform is a successful go-to-market approach for those ISVs and software OEMs that provide proprietary hardware. Those new to the approach nevertheless question how to make the hardware/ software delivery work if they take the hardware off their books. There is a justifiable concern around a seamless customer experience and the financial implications on their bottom line.
For an in-depth look at the hardware/software model shift and what to consider when embarking on a business model transition, read our latest whitepaper, Enabling the Transformation to a Software Focused Business Model.
