Independent software vendor: definition and what they do

By Indeed Editorial Team

Published 14 November 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Independent software providers support companies and other professionals with software and other secondary applications for a wide range of purposes. For instance, these vendors provide companies with specialist software to track performance, manage data and oversee their internal processes. If you work for an organisation that outsources software solutions, learning about independent software vendors, or ISVs, can be very helpful. In this article, we explain what an ISV is, review the different types of ISV solutions, outline what an ISV does, look at what an ISV partner is and list the various ISV partner types.

What is an independent software vendor?

Independent software vendors develop and sell different software applications and a wide range of solutions to other companies and professionals. They sometimes operate as software publishers that develop their own software solutions and programs, which they independently publish. As the computer science, technology and IT industries are constantly evolving, ISVs are in growing demand. The solutions that ISVs offer usually apply to the following industries:

  • retail and e-commerce

  • business analytics and intelligence

  • accounting and finance

  • manufacturing, production and operations

  • inventory and warehouse management

ISVs sell their software solutions and applications as retail products, with the consumers or end-users agreeing to use the software within specific licence limitations that protect the product from redistribution, copying and any modifications. They create software and applications rather than producing hardware and other systems-based equipment. Often, ISVs partner with established companies that do manufacture this kind of hardware.

Related: What is software development and why is it needed?

Different types of ISV solutions

ISVs provide a wide range of solutions to consumers, including:

Software as a service (SaaS)

SaaS solutions typically deliver service model software applications through cloud computing. They can operate across both public and private cloud networks, in addition to cloud marketplaces. SaaS software solutions can significantly benefit companies by improving their ability to manage and track their ongoing processes across their organisation, from marketing activities to sales and financial processes. ISVs that provide SaaS solutions usually specialise in specific niche areas, meaning they deliver customisable solutions for consumers. Some examples of these specialisations include analytics tracking, performance monitoring and project management.

Related: What is SaaS marketing? (Definition, benefits and how-to)

Enterprise risk management (ERM)

Cloud-based platforms are likely to use ERM software solutions and ISVs offer these to help companies evaluate and monitor operational, financial and strategic risks. ISVs primarily provide ERM solutions to the accounting and finance sector, alongside medical, technology-based or industrial companies. Businesses rely on ERM solutions to analyse potential risks and generate methods that significantly reduce risk exposure levels. Some popular features of ERM software applications that an ISV provides include incident, compliance and document management, in addition to mitigation tracking and reporting tools.

Related: What is a risk management framework? A comprehensive guide

Customer relations management (CRM)

CRM software is one of the most popular solutions that an ISV provides to companies. This particular application helps companies effectively organise, collect, use and store their customer data to assist with sales tracking, market segmentation and customer communication. ISVs that sell CRM software solutions to companies specialise in either selling marketing and research applications or developing these solutions.

Related: What are CRM systems? (Definition, key features and tips)

Cloud applications

Some ISVs focus on developing applications that specifically rely on cloud computing. They usually develop cloud-based solutions that optimise cloud computing for improved communications, business management and data storage. ISVs provide a wide range of cloud applications that can assist the following business areas:

  • technology

  • finance

  • human resources

  • administration and sales

  • operations management

Related: Software for accounting: 8 software options to consider

Enterprise resource planning (ERP)

An ISV's ERP software covers a wide range of different applications that comprise complex software packages or singular programs. ISVs design ERP solutions to improve business activities by making them more productive and efficient. ERP software solutions enable companies to effectively manage multiple departments. These solutions are typically useful for the following business areas:

  • accounting and finance

  • human resources

  • supply chain management

  • production and manufacturing operations

  • payroll

  • sales and inventory

  • customer communications

Related: Manufacturing software: determining software for business

What does an ISV do?

Here's an explanation of what an ISV does:

Conduct market research

ISVs carry out market research to develop different ideas for software products that can benefit consumers and companies. This research includes analysing current industry technology to identify improvement or development areas. For example, an ISV that specialises in developing software to improve child care management may analyse existing software that aims to organise daycare facilities. ISVs use their analysis and market research to create an innovative and effective product that fills a gap in the market and meets current user demands.

Related: How to conduct market research (with types and benefits)

Provide effective customer service

If a user invests in a company-specific or more widely available consumer software, they have access to expert advice and customer service from an ISV. These vendors provide effective customer service to consumers via a range of mediums, including email, telephone and online chat to help consumers with any software-related issues. Users can report issues they're experiencing, provide improvement suggestions and receive troubleshooting support from an ISV.

Related: What does good customer service look like? (With examples)

Program different applications

ISVs begin to program different applications once they've completed finalising their vision and planning. Usually, the ISV writes the code as part of the application's development, though they sometimes outsource this task to external professional application developers. ISVs typically produce many drafts, conduct various tests and consider user feedback before they publish the complete applications. After launching an application, the ISV may carry out routine maintenance and perform any necessary updates.

Lead software marketing campaigns

ISV products are widely applicable, but specialised marketing campaigns are crucial. These vendors optimise their budgets for advertising, target specific demographics and increase their products' appeal. For example, an ISV may create an online payment system to improve retail stores and may implement a marketing campaign that specifically targets retail stores that don't currently use an online payment system. By doing this, ISVs make it easier for them to persuade retail stores to purchase their software solution. ISVs use their marketing campaigns to highlight their products' unique selling points, including exclusive features and prices.

Related: 20 types of marketing for effective and profitable campaigns

What is an ISV partner?

An ISV partner is a service provider, developer or reseller that works with ISVs to develop their products and improve the products' distribution to consumers. They may also develop their own features or solutions that successfully integrate with ISV platforms or applications. Some ISV partners specialise in certain areas, including software integration and optimisation, in addition to software distribution.

Various types of ISV partners

There are many different types of ISV partners, including:

Managed security service providers (MSSP)

MSSPs provide specific solutions that protect a company's network systems from technological risks, such as cyberattacks, or physical risks, like a power loss. ISVs usually partner with MSSPs to integrate effective solutions, such as risk mitigation, disaster recovery planning, data backups and protocol restorations. MSSPs also provide additional services to ISVs, with some of the most popular including:

  • well-managed firewalls

  • risk and vulnerability assessments

  • intrusion detection

  • private virtual networks

Related: A guide to 10 careers in cyber security (with salaries)

Value-added resellers (VARs)

Value-added resellers work with ISVs to improve existing software solutions by integrating value. For example, VARs enhance existing ISV applications by providing additional features and elements that the ISV application alone didn't have. Many VARs have specialist niches that enable them to suit specific industries. VARs help ISV solutions to align with specific industry demands and standards via updates and software add-ons.

Systems integrators (SI)

System integrator partners fulfil a wide range of services that significantly help a company to successfully integrate ISV software packages or applications. SIs perform verifications and different forms of testing that help to integrate the various features that an ISV system or application can offer. Many SI partners predominantly focus on integrating these kinds of systems, yet some SIs also act as VARs or ISVs themselves.

Disclaimer: The model shown is for illustration purposes only, and may require additional formatting to meet accepted standards.

Explore more articles