In 2024, independent software vendors were rushing with eyes wide closed, according to one major cloud service provider’s commissioned survey

Based on a Sep–Dec 2024 survey of 657 executives and decision-makers at independent software vendors (ISVs) in parts of the Asia Pacific region (APAC), Europe, the Middle East and Africa (EMEA), and North America* on their experiences in approaching generative AI (GenAI), several findings have been disclosed by a public cloud service provider^.

First, ISVs in the survey were deemed to be approaching GenAI adoption and investments with “a gold rush mentality”. Many were opting for ready-to-use infrastructure to quickly deploy GenAI, prioritizing rapid deployment and scalability over in-house development.

Second, the rush to adopt GenAI was deemed to cause risks creating fundamental gaps. This could include a lack of proper planning, with many ISVs in the survey citing they were struggling to develop robust, profitable business models, which can lead to lack of understanding of pricing models.

Other findings

Third, another qualitative finding was that “high technology costs and talent shortages create unsustainable practices”. Among the respondents, the substantial financial burden of GenAI development had been compounded by a shortage of skilled talent, making their overall approach expensive and potentially unsustainable. Also:

  • Respondents had underestimated the importance of trust and compliance. This oversight could lead to increased costs, loss of customer trust, and potential regulatory penalties.
  • The survey report has concluded that there should be a shift from surface-level solutions to deep integration: this opinion asserts that “ISVs must shift from shallow use cases to more novel GenAI capabilities, developing deeply integrated products that deliver higher value.”

Qualitative recommendations to ISVs to address the GenAI opportunities and challenges include:

  1. Invest in R&D that addresses areas of vertical and administrative solutions that help their customers transform how they do business, such as reengineering processes, building new customer experiences, and disrupting with new products, services, and ways of doing business. ISVs should not only deliver GenAI capabilities that replace existing capabilities as customers will not see the ROI and ultimately not make the investment.
  2. ISV professionals must expand their own talent beyond GenAI and technology, and bring in vertical and operational expertise to develop solutions that are ready and easy for customers to adopt and get faster time to value. Strengthening customer-centric skills to understand their customer’s business and market develops both trust and value to deliver a product that customers see the benefit of the partnership and solution.
  3. Build strategic relationships with the right partners to co-define and develop products that link the partner offer to tangible, proven scalable GenAI solutions. ISVs that can craft impact for customers improve partnership value and provide a sustainable and growing market that drives competitive advantage for themselves and their partners.

The survey was commissioned by AWS.

*No detailed breakdown of ALL the countries included in the survey was supplied

^ Respondents were offered a small incentive as a thank-you for time spent on the survey. No information is provided as to whether the respondents had interests with the organizer(s) of the survey