The Differences Between ISV vs. SaaS

Although independent software vendors (ISVs) and software as a service (SaaS) are sometimes used interchangeably, there are key differences in what they are and how they operate. This article explores some of those differences. It also outlines many of the benefits that emerge when ISVs become SaaS vendors who fully embrace the software as a service concept.

What Is an ISV?

An independent software vendor is an organization that specifically develops and sells bespoke software applications for a range of diverse end-users. Although many ISVs have historically delivered their products via disk, CD or DVD, a growing number of providers in this field have transitioned to the SaaS delivery model.

What is SaaS?

With the software as a service business model, application developers make their products available through the cloud — usually with subscription-based pricing. This approach removes the need for users to configure on-site servers or download software on their physical machines. Instead, all access is granted remotely via the Internet.

In short, the key difference between ISV vs. SaaS is that the former provides software products and the latter represents one channel through which those products can be delivered (i.e., the cloud). The rest of this article explores why the ISV and SaaS bond continues to grow.

Understanding the SaaS Transition

There are many reasons ISVs (and their users) increasingly prefer the software as a service concept. Below are some of the ways that independent software vendors benefit from using SaaS:

• Lower costs: Moving software development and delivery to the cloud eliminates the need to dispatch technicians to help customers configure their servers or troubleshoot issues.

• Greater security: Because everything is cloud-based, patches and upgrades are automatic — making for a more secure experience.

• Higher conversions: The SaaS model lends itself to free trials since there are no physical products to develop or ship. In fact, letting customers “try before they buy” is a staple of many SaaS marketing strategies.

• Recurring revenue: Most SaaS platforms use some type of subscription-based pricing, which allows ISVs to generate recurring revenue throughout the year. This consistency helps smooth peaks and valleys — while also improving cash flow.

However, your customers also benefit if your ISV organization embraces cloud-based delivery. In addition to improved security and simplified upgrades, below are other ways in which the ISV and SaaS marriage benefits end-users:

• Anytime, anywhere access: Because everything is in the cloud, users can access your programs and applications from any secure mobile or PC browser.

• Better scalability: Cloud-based delivery makes it easier for customers to buy as much access as they need. If a company hires a larger team, for example, it can simply purchase more subscriptions. The opposite is true if that company needs to let some employees go. SaaS pricing models allow organizations to control spending as their needs evolve.

Time to Make the Switch

Regardless of how you deliver your products and services to your customers, you need a way to securely accept payments. More specifically, it needs to be a solution that is as flexible and robust as the customized products you develop for end-users.

To learn how our cutting-edge payment tools can help your ISV organization transition to cloud-based delivery and generate more sales, schedule a free consultation with our merchant services team today. Visit cardconnect.com/signup to start the conversation!