What is an ISV? An ISV, short for independent software vendor, is a company that builds and sells its own software and is not owned by the maker of the hardware, operating system or platform that software runs on. "ISVs" is simply the plural, so "ISVs meaning" and "ISV meaning" point to the same thing.
The word "independent" matters. A vendor that makes a laptop and ships its own software with it is not independent. A company that writes accounting software, a security tool or a vertical application for dentists, and sells it on its own terms to run on other people's platforms, is.
This guide explains what an ISV is, how ISVs differ from SaaS companies, what ISV solutions look like, how ISVs sell, how the ISV segment is made up, and how ISVs work with MSPs and resellers.
What does an independent software vendor do?
An ISV designs, builds, sells and supports software. The software can be packaged for customers to install, delivered over the internet as a subscription, or built to plug into a larger platform. The day-to-day work covers product development, pricing and licensing, sales, customer support and, increasingly, relationships with the platforms and partners that help it reach buyers.
What is the difference between an ISV and SaaS?
ISV describes who the company is and how it relates to platform owners. SaaS, or software as a service, describes how software is delivered. The two overlap heavily, so people often search for "ISV SaaS" together.
| Term | What it describes | Example question it answers |
|---|---|---|
| ISV | A software company that is independent of the platform owner | Who built this and who do they answer to? |
| SaaS | A delivery model: software run by the vendor and accessed online by subscription | How do customers get and pay for it? |
| SaaS ISV | An independent vendor that delivers its product as SaaS | Most modern ISVs |
| OEM | A maker of hardware or a platform that bundles software | Who ships it inside their own product? |
What are examples of ISV solutions?
ISV solutions cover almost every category of business software. Illustrative examples of the kinds of products independent vendors sell:
- Business applications. Accounting, payroll, billing and HR tools.
- Security software. Endpoint, identity, email and cloud security products.
- IT management software. Remote monitoring, ticketing and documentation tools that MSPs rely on.
- Collaboration software. Messaging, meetings and project tools.
- Data and analytics software. Reporting, integration and data management products.
- Vertical software. Applications for one industry, such as healthcare scheduling or legal case management.
- Developer tools. Source control, testing and observability products.
Well-known vendors such as Atlassian, Intuit, Adobe and Autodesk are commonly described as independent software vendors. In cloud marketplaces, the term is also used for any software company that lists a product on a major platform, such as Microsoft, Amazon or Google.
What are ISV software solutions made of?
Most ISV products combine a core application, an interface for customers, an interface for developers (an API), integrations with other tools, and an administration layer for managing accounts and billing. Many also include a set of connectors to popular platforms, because customers expect software to fit into the tools they already own.
Integrations are a bigger deal than they look. A product that connects cleanly to a customer's stack is easier to sell and harder to replace. That is one reason ISVs care about the technology their buyers use, which our guide to technographic data for ISVs and VARs covers in more detail.
How do ISVs sell?
ISV sales, or ISV go-to-market, usually combines several routes:
- Direct sales. The vendor's own team sells to customers, often through an inbound website or sales calls.
- Self-service. Customers sign up and pay online, common for lower-priced products.
- Marketplaces. Listings on cloud and software marketplaces let customers buy using their existing cloud agreements.
- Resellers and VARs. Value added resellers bundle, configure and support the software for their own customers. See what is a value added reseller.
- MSPs. Managed service providers adopt a product, standardize on it and resell it across their client base.
- Technology partnerships. Co-selling and integration deals with other vendors.
Software that serves small and mid-sized businesses often depends heavily on the last three routes, because those customers buy through trusted local advisers.
What is the ISV segment?
"ISV segment" refers to the part of the technology market made up of independent software vendors, and to the ways that market is divided. The common splits are:
- By size. Startups, growth companies, and established vendors.
- By product type. Horizontal tools used everywhere, and vertical tools built for one industry.
- By delivery. SaaS, installed software, and hybrid.
- By platform. Which cloud, operating system or ecosystem the product is built on.
- By go-to-market. Direct, partner-led, marketplace-led or a mix.
These splits matter when you want to find the right vendors, whether you are recruiting partners, offering a service or comparing products. Our ISV database covers about 80,000 independent software vendors, and you can browse the ISV companies database by segment.
How do ISVs work with MSPs?
MSPs are one of an ISV's most useful routes to market. An MSP that standardizes on a product can deploy it quickly across many customers, handle first-line support and bill for it as part of its own service. For the vendor, one MSP relationship can mean many end customers.
To make that work, ISVs build partner programs with MSP-friendly features: multi-tenant management, usage-based billing, white-label options, training and clear margins. If you are weighing how to approach the channel, our guide to building a channel list of MSPs is a good next read.
What should an ISV think about when going to market?
- Who the buyer really is. The user, the budget holder and the adviser can be three different people.
- Which channel fits the product. A product that needs setup and support suits a reseller or MSP. A simple product suits self-service.
- Integration coverage. The tools your buyers already use should connect to yours.
- Partner readiness. Training, documentation and a clear margin make partners willing to sell.
- Data quality. Outreach is only as good as the list behind it.
Related reading
- how to find a technology reseller: how vendors recruit resellers and buyers find them.
- what is technographic data: using technology data to find better-fit buyers.
- what is a managed service provider: the providers that resell and support ISV software.
- what is a value added reseller: the reseller model in detail.
Where to go next
An ISV is an independent company that builds and sells its own software, and it is one of the main groups that sells into the IT channel. If you want to reach ISVs, see our ISV companies database. If you want to reach the MSPs and resellers that ISVs sell through, browse our MSP database, or request a free 100-record sample.
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