Independent software vendor (ISV) is a business term for companies specializing in making or selling software, designed for mass marketing or for niche markets. Such markets may be diverse including software for real estate brokers, scheduling for healthcare personnel, barcode scanning, stock maintenance and even child care management software.
Specialized products generally offer higher productivity to organizations than more generalized software such as basic spreadsheet or database packages.
Most large software companies, including Microsoft, Google, Red Hat, Oracle, SAP, HP and IBM, have special programs for ISVs.
An ISV makes and sells software products that run on one or more computer hardware or operating system platforms. The companies that make the platforms, such as Microsoft, IBM, Hewlett-Packard, Novell, Google, Oracle, Apple, SAP, salesforce.com encourage and lend support to ISVs, often with special "business partner" programs.
In general, the more applications that run on a platform, the more value it offers to customers. Of course, platform manufacturers such as Microsoft and IBM make applications as well, but don't have the resources and, in many cases, the special knowledge required, to make them all.
Some ISVs focus on a particular operating system, such as IBM's small business AS/400, for which there are thousands of ISV applications. Other ISVs specialize in a particular application area, such as engineering, and develop software primarily for high-end Unix-based workstation platforms.
ISVs make and sell software that is added to platforms. Original equipment manufacturers (OEMs) use hardware platform components to build larger products. Value-added resellers (VARs) incorporate platform software into their own software product packages.
According to the Institute for Partner Education & Development, at least 50 percent of an Independent Software Vendor’s revenue comes from the development of proprietary software solutions or applications. They have expertise in standard market platforms (Windows, Unix, Linux, Mac OS X) and large business software solutions.