An independent software vendor (ISV) is a company that specializes in producing software aimed either toward mass marketing or specific niche markets. These type of applications are able to provide businesses and individuals with a highly efficient, specialized solution for their individual needs. This may range from providing software designed for the scanning of barcodes to providing a business with inventory management software. These specific solutions help to maximize the productivity and efficiency of the businesses that use them.
Many of the companies that produce generalized software solutions, such as Microsoft and Google, also provide more specialized solutions. Often, however, these large companies are unable to produce the specially targeted applications needed in some businesses. This is why an independent software vendor is crucial.
Microsoft, Google, International Business Machines (IBM), and other companies that produce computer platforms provide incentives for independent software vendors to develop applications for their platforms. An independent software vendor is often able to become business partners with these companies, providing the ISV with greater resources for producing applications. This enables the independent software vendor to produce higher quality applications than the vendor would otherwise be able to produce.
An independent software vendor may choose to produce applications that will only run on a specific type of platform, such as with IBM's AS/400. Limiting the system that the application runs on gives the developers more time to focus on maximizing the functionality of the application, rather than worrying about cross platform compatibility. This means the applications will often have a greater number of features and fewer number of bugs when compared to applications that have been designed to run on several different platforms. This helps increase the marketability of the application to potential consumers.
An independent software vendor may not be the company that produces the software the vendor sells. Instead, the independent software vendor may choose to package software with a set of supplied hardware and sell it to consumers in a package. These types of ISVs are known as value-added resellers (VARs).
The vast majority of computers bought from stores today are sold by VARs. This is why computers come with a variety of different software packages already installed. This helps the average consumer by eliminating the need to buy individual software packages separately. The downside is that users may be provided applications that they find of little or no use for their specific needs.