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ISV Expands Developer Opportunities Through Vertical Approach

All eyes are on the cloud right now, but vertical market focus is still a driving force for partner business model transformations. Microsoft suggests that partners, from systems integrators (SIs) to value-added resellers (VARs), need to build industry specialization to prosper. And while sales may be the initial motivation to go vertical, there can be important operational benefits as well -- as Keyora, an Ontario, Canada-based ISV has discovered.

The Cost of Generic
An ISV with 50 employees, Keyora traditionally took a horizontal approach, building a generic e-business suite of products named "Wave." Ever-growing customer expectations and stiff competition in the e-business market has made a horizontal approach increasingly expensive.

Prospects want to see how Wave is going to solve their specific needs, so Keyora takes the time to understand each company's market challenges during the sales process. Using the prospect's data and products, Keyora mocks up a custom site to demonstrate the functionality of its platform.

"With horizontal opportunities, we have about a one-in-50 close," said Susan Griffiths, Keyora's CEO. "That represents three to six months and a lot of effort."

Building Subject-Matter Experts
Keyora's response has been to focus on vertical markets with the help of both customers and partners. Working with several Dynamics AX partners to offer an end-to-end financial solution, Keyora has customized the e-business platform to meet industry needs.

"Building industry expertise through customers or partners is always the easiest way to do it," Griffiths noted. "We do a lot of research, but the customer's employees have a strong sense of what doesn't work and what they would build instead. They are very willing to share the information with us."

While customers define what they want, Keyora's developers still have to translate those requirements into a working solution. As they build their understanding of the customer's unique needs, the developers become subject-matter experts. That expertise translates into the opportunity for career advancement in the traditionally flat organizational structure inherent to the ISV business model.

"It's helped us to create a different structure to the organization," Griffiths said. "We have incredibly talented developers who were all supporting a horizontal platform. Now we can give ownership to them as subject-matter experts to manage the application from the vertical perspective."

The opportunity for the developers lies not just in building the vertical functionality, but also to apply their industry expertise to other uses of the solution. With their deep understanding of the Keyora platform, the developers can see uses of the application that the customer would never recognize.

"As the specialist, the developer is the subject-matter expert for all three of our application suites. They can define how they all interact within one vertical to become a subset of the platform," Griffiths said. "It has created tremendous excitement within our team."

More than Sales
The message of going vertical has been focused on market opportunities and closing sales, but there is more. Providing career advancement in an increasingly competitive job market is clearly an important consideration for partners. As Keyora has found, vertical markets add new dimensions to organizational structure and give developers the opportunity to build knowledge and take on new challenges.

Are you finding unexpected benefits of going vertical? Add a comment below or send me a note and let's share your story.

Posted by Barb Levisay on June 13, 2013