Independent Software Vendors (ISVs) play a crucial role in the software industry by introducing new applications, enhancing existing platforms, and fostering innovation. They are key drivers of technological progress, and with their expertise, create tailored solutions for specific industries, enabling streamlined workflows, improved productivity, and enhanced competitiveness in highly challenging markets. They also operate in a highly dynamic and competitive environment where innovation, agility, and cost management play a key role in success. Unlike larger software companies with a wider resource base, ISVs often face unique challenges, such as managing complex pricing models, adapting to unpredictable workloads, and balancing resource flexibility during development and testing phases.
One of the most critical aspects in addressing these challenges is the billing model. Currently, there are four types of billing options in practice – fixed-price, retainer, time & material (T&M), and hourly billing. Hourly billing offers flexibility, particularly for cost-sensitive vendors. An hourly billing model provides the agility and transparency that ISVs need to thrive. In the following segments, we discuss how this model can benefit ISVs.
ISVs often encounter roadblocks that impede their ability to scale efficiently and remain competitive. These include:
Hourly billing offers ISVs a practical solution by introducing flexibility and transparency into project management. Unlike fixed pricing, which can complicate negotiations and limit adaptability, hourly billing ties costs directly to work performed. This approach simplifies complex pricing models, allowing ISVs to adjust project deliverables seamlessly. Flexera’s 2023 Tech Spend Pulse, conducted among 500+ participants, revealed that 90% felt that vendor price hikes were a primary challenge in their IT spending. And over 60% believed that visibility was a challenge2. Hourly billing supports resource flexibility and visibility by enabling ISVs to scale their teams up or down depending on project demands, such as increasing developers during intensive phases or reducing staff during routine maintenance.
In addition, hourly billing helps ISVs avoid vendor lock-in, adapt to fluctuating workloads, and enhance cloud support. For instance, SaaS providers experiencing seasonal surges, like retailers during holidays, can use hourly billing to scale resources without overpaying. It is widely acknowledged that software development aligns with the Pareto principle, with 20% of developed features often going unused. This underscores the cost-efficiency of hourly billing, as it ensures clients pay only for the features they truly need. This pay-as-you-go model aligns well with Agile and DevOps practices, enabling ISVs to maintain agility and control costs in dynamic environments.
At Intelics Cloud, our aim is to enable ISVs take full control, eliminating hidden surprises with scalable solutions tailored to their needs. Most hyperscalers are unable to offer this flexibility, which increases the operational costs. Our clients can experience savings from 30-50% on development and testing by turning off resources during non-working hours, making the Intelics Cloud solution an ideal choice for budget-conscious ISVs. Clients can match their cloud usage to the requirements by scaling up during peak demand and reducing during slower periods, ensuring that they only pay for what they use. With Intelics Cloud, our platform is designed to work with you, enabling clients to scale confidently without the fear of high exit costs or vendor lock-in. Last but not the least, our dedicated team supports every requirement by prioritising our clients’ needs.