The ISV Dilemma

I received quite a jolt when a budding
ISV (independent soft-ware vendor) said
that he feels that their life is hell, and the
road for them leads to nowhere. ISVs are primarily entrepreneurs who develop all sorts of applications on established platforms-ranging from Windows to Unix to Linux-and their various versions. The ISVs either sell directly to the customers or tag along with the IT vendor or the systems integrator. In India there are over 1,000 ISVs, with outfits of varying sizes, ranging from three to five people to a couple of hundred people.

The biggest challenge before small ISVs is hiring people, particularly software engineers, and that of managing them. Especially keeping them motivated. A challenge complicated all the more by the fact that, essentially, they need very capable and experienced people, who would, obviously, prefer to join a well-known and prestigious company rather than a small, unknown entity. Or so received wisdom has it.

What shocked me, though, was something else. From all the resumes that this ISV got when he went to recruit, quite a few were from people working in “large and well-known” software companies. Their resume indicated that they were doing very monotonous and routine jobs, and that job satisfaction was lacking. The eye-opener was that quite a few of them flunked the initial written test given to them. On the contrary, some of the applicants with no work experience or those from small companies scored better.

Recruitment for small ISVs is a tough nut to crack. And costs quite a bit too. For instance, this ISV I met wanted a couple of specialists who could work on BI (business intelligence) systems. Several attempts to get people through word of mouth or even manpower consultants failed, even though he had offered double the commission that is normally given to them. Finally, he spent Rs 1 lakh to take out a recruitment ad in a leading Indian financial newspaper. He was inundated with almost 1,600 resumes. After all the screening and shortlisting, he was left with 39 candidates. Finally, only about 27 people turned up for the interview and of them three were selected. And one quit within three weeks of joining.

It is easy to brush this aside as another unfortunate tale of the struggle of another upcoming IT startup in this big bad world of IT giants and MNC brands, but the impacts will be serious and far-reaching. The fact is that these entrepreneurs, whom many call the lifeline of IT development, will start getting choked. It is the small ISVs that drive innovation today, not the big companies, especially in applications. The big companies just go and implement them. The big companies will also get hit by this.

The alarm bells should start ringing for the big names in software. A lot of their engineers are not satisfied with the kind of work they are being given. And, more importantly, they are probably also getting rusty-this cadre even flunks some very basic, entry-level exams. If they continue to work, even at senior levels, only for the sake of money and the brand name, they will never be able to go up the value chain.

This story also highlights the urgent need for more innovative thinking among small ISVs. For instance, the one I met is now looking at ways to cut sales-cycle time so that he can give more time to people issues. In fact he has also broken the rules and taken a fresher, and is quite happy.

But clearly, much closer big-company—very-small-company collaboration will help. Many of the big IT companies have programs to develop an eco-system. Perhaps it is time to re-visit it, specially with a view to exploring even smaller entities.

The author is editor of Dataquest IBRAHIM AHMAD