Heavily Regulated Industries Present Smaller ISVs with Potential Niche Markets
This is the third blog post in our current series on the opportunities for smaller Independent Software Vendors (ISVs) in opting to service niche markets. In this post we will look at a source of product notions that these smaller ISVs may find when they look closely at heavily regulated industries.
Heavily regulated industries share one common characteristic: they are all subject to periodic review by their respective regulatory agencies. Therefore, records keeping — across the board — is a mandatory task for all of these businesses. Extrapolating from this fact, it should be easy to see why these types of businesses are particularly promising for ISVs who offer comprehensive applications, like Enterprise Resource Planning (ERP), or any of the other “enterprise” software packages (Content Management, Document Management, Risk Management, etc). In fact, once one of these businesses standardizes on an ERP solution, every department throughout the organization will need to implement the solution.
With a business intent on migrating all of its operations onto a new ERP platform, there will be, in all likelihood, opportunities to provide customers with what we like to refer to as “follow on” software and services. For example, despite the fact that all departments within a heavily regulated business must, across the board, implement a new ERP standard, these same departments can still complain about the obligation. Further, they can perform poorly with the new software, which can lead to a drop in overall profit for the business or a drop in sales. Regardless of how activities diminish, a requirement emerges to support the customer in its efforts to hasten user adoption across the business, of the new software package.
For all of the above it makes sense for ISVs of all sizes to look closely at regulated businesses. Obviously, larger ISVs have developed lucrative ERP solutions for the largest components in specific industries. For example, for law firms, an Enterprise Content Management (ECM) software package by the name of Hummingbird, which is actually no longer aggressively marketed, is still the standard. Needless to say, quite a number of ISVs have earned meaningful revenue either selling this package, or servicing it.
Similar examples abound for health and human services businesses, financial institutions, and more. But this is fine for larger ISVs. What about smaller ISVs with original Intellectual Property (IP) in mind as a business model. Where are the opportunities for these smaller players in heavily regulated industries? We will take a look at how to filter for some of these opportunities in the next post to this blog.
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