Taking the Customer Out of the Middle: ISVs and Application Hosting Providers

Taking the Customer out of the Middle:

ISVs and Application Hosting Providers

The Customer Experience is What Matters: Building Up

Let’s face it, hosting service providers and software developers have a love-hate relationship with each other.  The hosting provider needs the ISV, because hosting that product or solution means consumption of resources (read=subscriptions and billings) for the provider.  The ISV needs (sort of) the host, because customers are demanding that they be able to access their solutions “in the cloud”, and hosting providers are the way to get that done.  It would seem that the two have much in common, in terms of wanting to give the customer what they want, but it’s not that simple.

Often times, when a customer decides they want to have an application hosted by a 3rd party service provider, they proudly deliver the request to the provider and ask how much it’ll cost.  Now, in a lot of cases, and from the QuickBooks hosting community in particular, the market has become accustomed to getting a lot of things hosted for not a lot of money.  Always compared to the DIY approach of leasing infrastructure with Rackspace or the like, the full-service application host pricing models have been compressed greatly in order to gain acceptance and adoption.   So, the customer wants the host to install and deploy the application, and the provider generally sucks it up and does the deployment for little, if any, additional revenue.  It’s only when there are implementation difficulties that the problem with this situation starts to reveal itself.

Because the service provider probably isn’t making a lot of money on this single deployment of a new application, they aren’t highly motivated to put a huge amount of engineering time in to fully understand what the deployment will take to be done well.  When stuffing the CD in the drive and running “setup” doesn’t cut it, the host often then takes the next logical step of contacting the software provider.  The problem with this is that the software provider doesn’t know the hosting company, doesn’t know that they have technical people (or a platform) that are not what they usually deal with, and are often ill-prepared to hop on the phone with T2 engineers or developers on line.  Frankly, they are there to support their customers (the purchasers of the product), and not necessarily the hosting providers.  For this reason, many software companies require that the customer intervene, and be the bridge connecting the two support groups.  This is time consuming, often not very effective, and is frustrating for – mostly – the customer who just outsourced their IT and believed this type of thing would be taken care of.

There are even situations where alternative software products may be recommended by the hosting service provider, if the solution is particularly challenging to deploy or if the ISV isn’t being as helpful as the hosting provider demands.  Again, this puts the customer in an extremely difficult position, and compromises the relationship already establish with their software vendor.

In all fairness, the positions on both sides are completely defensible.  Software companies aren’t all looking to have their solutions hosted, and when they decide to, they may want to have a choice in who hosts their products (similar to the approaches adopted by Intuit and Sage).  Some software products are just so darned popular that everyone wants to host them whether they have the resources to do so or not (QuickBooks and MS Office and anything and everything that plugs in to them, for example).  And this is what drives the problem, but it also drives opportunity – for software developers and hosts alike.

Building Up believes that software developers and hosting service providers can work together better, and deliver better overall customer satisfaction to their hosted market of users by being prepared to engage as the need, or opportunity, arises.  We’re helping hosting providers, ISVs and developers, and the clients they serve achieve better results and performance through a cooperative relationship founded on the recognition that only one thing ultimately matters: the customer experience.

Let us help you keep your business building up.