Cloud Opens ISV Expansion Opportunities: Plan for Success

The cloud is removing barriers and allowing ISVs across the globe to enter new markets. But success in unfamiliar markets requires much more than just access. Careful planning from the beginning and consistent execution can save you from cultural missteps and costly mistakes.

With the cloud as an international platform, ISVs should consider internationalization from the start, recommends Bart van der Horst, partner and managing director for iChannel, a strategy consulting firm that helps technology companies expand into new markets.

"Most ISVs today develop for the cloud and the cloud doesn't stop at borders. If you want to be a market leader, you have to think internationally," said van der Horst. "Make sure you take data security and international regulations into account."  

Language considerations can be more complex than expected, like making allowances for the number of characters in descriptions and field entries. While there are machine translations, including one offered by Microsoft, language is a tricky business that needs to be tested by humans. Working with a professional translation firm, especially one with expertise in the industry that you serve, will save you time and money in the end.

Planning for Expansion
"When you are evaluating new markets, it's imperative to do a competitive analysis," explained van der Horst. "Many U.S. partners just think about the U.K., which can be a fine place to start, but they should think about how they will follow into continental Europe, the Middle East and Africa."

Thorough competitive analysis by country should include research on industry events, professional associations, Microsoft's focus and current partner engagement. Speaking to Microsoft reps, local partners and associations will help develop your insights into the market.

"You should build a three-year plan, which may seem long for our industry, but it's an iterative process that will change over time," van der Horst said. "When you are investing in international expansion, consider not only the potential profits but the value you build in the product and your organization." Features and functionality that are built for foreign markets may be attractive to your current user base. Alliances that you forge can benefit your customers and partners across markets.

Other considerations that van der Horst suggests you include in the planning process are:

• Localized marketing messages, along with a Web site content management system that will help you manage your content across markets.
• Pricing designed to meet local standards and currencies.
• Understanding of how to compensate partners in line with local norms.
• Executive sponsorship and communication with employees about your progress.

When you are ready to execute on the plan, van der Horst suggests not trying to go it alone. "Hire local people, a business exec or project leader, as an interim manager or employee to help you enter a new market," he advised. "Trying to set up with your own folks as expats in a new country usually doesn't work out." You'll also need a local tech resource to support your partners and a marketing agency familiar with the region.

Since most ISVs have limited resources, the most realistic way to enter a new geographic market is through a channel strategy. Finding partners in your market is a significant challenge, but focus on quality instead of quantity. "Build a partner P&L that lists out your value to their organization," van der Horst said. "Clearly define how you are going to help your partners make money. Plan to deliver more sales help in the beginning until they become proficient."

To maximize the value you can receive from your Microsoft partnership, choose your market niche carefully. "It's easier for Microsoft to work with you when you focus on a vertical. You don't have to have the best solution to be the market leader," van der Horst added. "Together with Microsoft and your channel partners, you can make a real impact on your specific market."

The cloud puts international expansion within the reach of every ISV. Play to your strengths in choosing a vertical focus and plan ahead to take advantage of the boundary-free opportunity. How have you built a presence in new markets? Add a comment below or send me an e-mail and let's share your story.

Posted by Barb Levisay on July 08, 2015