With the introduction of the digital, businesses have started deploying tech solutions and applications, even building service apps for themselves. ISVs have been emerging all over the globe, with IT Giants like Microsoft now acting as enablers with cloud platforms like Azure, providing capabilities to independent app developers, app studios, startups and enterprises alike.
Companies across verticals are today moving towards flexibility, security and advanced computing capabilities. Microsoft with its cloud is driving business transformation for leading banks, financial institutions, hospitals, media companies, e-commerce organizations, government departments, and telecom providers, who have become early adopters of local Microsoft cloud services, leveraging the local cloud for better productivity and enhanced customer experience.
We like to think of ourselves as an electric company. Nobody uses electricity directly; they use appliances in their household which in our case are applications.”
Microsoft has entered new partnerships, powering new-age independent software vendors (ISVs) with its cloud services, which provide marquee solutions for various business needs. These solutions have been deployed across verticals like retail, eCommerce, banking, FMCG among others as Microsoft looks to build a successful ISV story in India with its Azure Marketplace.
“The choice of MS was not just because of server but the local support. Microsoft offered cloud stack knowledge on how to scale Zing to a global HR platform.”
Founder and MD
Acting as an Enabler for ISVs
Microsoft as a ‘cloud platform provider’ works as a support system for ISVs supplying them with capabilities like scalability, and mobility. According to Harish Vaidyanathan, Director for Microsoft’s ISV business in India, “ISVs are the ones that offer solutions to the end customers. We like to think of ourselves as an electric company. Nobody uses electricity directly; they use appliances in their household which in our case are applications.”
“Azure has a lot of benefits; the technical team has been very helpful, the latest tools and technology, plus Microsoft’s experience with enterprises makes it an immediate choice.”
Founder and CEO
With its expertise in cloud, Microsoft enables ISVs to move away from traditional servers and onto cloud, thus getting rid of unnecessary hardware and software liabilities. Prasad Rajappan, Founder and MD, ZingHR, one of the most promising Indian ISVs on Azure says, “The choice of Microsoft was not just because of server but the local support. Microsoft offered cloud stack knowledge on how to scale Zing to a global HR platform. Azure and its capabilities helped Zing HR to move from traditional server architecture to the cloud.”
For ShepHertz, an omnichannel app development platform, Founder and CEO Siddhartha Chandurkar quantifies the choice of Azure as the cloud capability provider, “Azure has a lot of benefits; the technical team has been very helpful, the latest tools and technology, plus Microsoft’s experience with enterprises makes it an immediate choice.”
ISV Adoption in India
The market for ISV solutions in India is just beginning to gain momentum. This has been a direct result of cost reduction due to a shift in thinking, new value additions through collaborations and technologies. Microsoft’s Vaidyanathan states, “Initially, most customers would not prefer an ISV solution due to the cost, but because of the cloud and the subscription model, cost comes down dramatically. Now you can get an ERP solution, very quickly, and cheaply on a monthly basis, that has changed customer mindset significantly. Also cost comes down as now you don’t have to invest in hardware, software, data center, networking etc.”
ShepHertz, which has a number of customers including a major Indian airline, media houses and others in BFSI and Healthcare, believe that the change in mindsets is very recent and due to the proliferation of IoT in the country. Siddhartha believes, “In the past 1 year customer expectations from any company have increased. With the proliferation of android in India, things will really go pro. Smart phones offer convenience and access to products. But mobile is just a medium, an electronic device is nothing without an application. Factories, offices, households; India is a very big app market. Today, transition of a person from web to mobile, and vice versa is very important.”
ZingHR’s Prasad, having put human resources on cloud for a number of institutions like Kotak and HDFC Bank believes adoption and understand of cloud has been the driver, “Cloud preference is an interesting trend. Two years back this was an issue, people were skeptical with cloud security. They already had infrastructures so they opined that why should they pay for this. Funny part is, now they say putting the data on cloud is more secure.”
Microsoft’s Engagement Strategy
Harish believes Microsoft has seen a big change moving towards the ISV motion. He explains how Microsoft’s communicates with and supports its ISVs, “The conversation has two pieces. Firstly, what are the benefits of building their products on top of Azure. And secondly, once they are on Azure, how do we help them get existing Microsoft customers.”
Describing Microsoft’s way of engaging customers, Harish elaborated, “We have ISV programs where we help ISVs to move to the Azure platform and other Microsoft technologies. Once that is complete, we work with the ISVs to figure out how we can help them grow their business. The ISV program is 10 months old. We are doing this in the Indian market today but we have started in other geographies as well.”
Apart from this, Microsoft helps them technically with regards to product development and deployment. “We have a technical team working with ISVs to improve product efficiency. Azure marketplace enables ISVs to sell their products. It is not necessary but optional. We have 3000 ISVs on Azure.”
Helping them Reach Customers
Microsoft’s ISV business revolves around helping customers take advantage of cloud through ISV solutions. Harish Vaidyanathan states, “We talk to our customers about all these ISV solutions. This changes the dialogues dramatically from an end customer standpoint,” he adds, “We use our existing sales and marketing dictionary to expose ISV solutions to the customers. We have a fairly large sales channel, access to which we give to our ISVs.”
ISVs believe Microsoft’s history with enterprises and its mammoth sales channels enable a very compelling combination. Siddhartha says, “Microsoft has always been great at enterprise level with operating systems, the Office and now with cloud. Shephertz and Azure is a very potent solution which we sell to our customers and in a short time we have been able to close some very big ones.”
Rajappan points out that Microsoft is much more than a cloud hosting partner for Zing HR, “It would be wrong to say all it gives is cloud hosting. That is a valuable part but the real value comes from customers and partners like in any other ecosystem.”
Taking Indian Solutions to Global Markets
As a global company, Microsoft has big customers and strongholds in world markets. Some of this weight has been leveraged by ISVs who have found customers in foreign markets as well. However, Harish Vaidyanathan believes India is one of the trickiest markets to succeed, “Indian customers are really cost sensitive. If ISVs succeed in India, they can succeed anywhere in the world. We have seen some success with Indian ISVs going global, but it is still early days.”
Prasad Rajappan says ZingHR has a planned global expansion strategy, “Majority of our customers are in India but now we have a few in Australia, Singapore, and Middle East. We find that US and Europe markets are saturated. So we want to capture other markets first. This year, we are eyeing Australia, MEA and South East Asia.” Siddhartha eyes ShepHertz as a global company for digital marketing, “China, South Korea, Japan combined eclipse the US market. However, China is difficult to enter due to domestic problems, Japan language is an issue. But they are big markets and are of our interest. We already have enterprise clients in US and Singapore.”
ISV Business in Number
Microsoft says there are 2000 products and 6000 ISVs in the country. These include product development companies including startups, app studios and app developers. But with the competition, the opportunity is also huge.
Prasad has high hope for ZingHR, “In India there are 10 million companies with 20-100 employees. Out of this 6 Lacs are IT enabled. Our clientele is just 500 right now. Market size is expanding.” Talking about the current business, he adds, “About 60-70% of our sales come through Digital Marketing. We plan to increase out records to 50 Lacs in the next three years. We have record of 500,000 entries now which we want to take to 50, 00,000. Current turnover is 400 Crores per annum”
Siddhartha believes growth is just starting to take momentum for ShepHertz, “We process 30 billion APIs, the traffic we manage. We are currently closing 4-5 customers a month. 60 to 70% of our revenue comes from bigger companies. We have built a global economy for digital marketing and are growing at 20% M-o-M. Now we have to grow 10X; profitability is focus for next quarter.”
The ISV business is surely destined to be a huge success in India for Microsoft and its partners. Siddhartha believes that Indian enterprises are looking to run shoulder to shoulder with counter parts globally, “Enterprises know what is happening in US, they want to replicate but they don’t have a platform,” he adds, “Enterprises need bigger platforms. Our platform gives this kind of capability with Azure.”
Microsoft’s biggest challenge arises due to the sheer numbers. Harish remarks, “The challenge is how the ISVs can be addressed to because the infrastructure is so large. How many ISVs can we put in front of our previous customers?” On the future of ISVs, Harish pointed out that the key is applicability, “Not every ISV is promising. There are some ISVs who are more mature; it is easier for them to succeed. They are solving a very particular, precise problem. The more precise the problem an ISV solves, easier is customer congregation.”