Unveiling the future of AI innovation for ISVs

In today’s rapidly evolving digital landscape, software companies are at the forefront of innovation. These organizations are uniquely positioned to take advantage of AI-powered solutions to drive growth, enhance customer experiences, and stay ahead of the competition.

AI is opening the door to valuable opportunities for software companies by accelerating cloud migration, app modernization, and analytics, while making developer tools more accessible. To harness the power of AI, software development is key.

With 53,000 customers currently using Azure AI services, it’s clear that a growing number of companies are investing in AI tools for independent software vendors (ISVs)—and they’re reaping the benefits.¹ On average, organizations see a 350% return on every dollar invested in AI within 14 months.²

If you’re looking to transform your business, Microsoft is committed to helping you achieve your AI ambitions. At Microsoft Ignite in November 2024, we announced product innovations, a suite of new offerings, and streamlined resources to empower software companies to differentiate, innovate, and grow in the ever-evolving landscape of AI-powered experiences.

ISV innovation with AI

Software companies play a primary role because they create the tools and platforms that make AI accessible and practical for various industries. These companies develop the foundational models and algorithms into their offerings that drive AI applications, enabling differentiated innovative solutions across different sectors.

By advancing AI capabilities, software companies can push the boundaries of what is possible, fostering an environment of continuous improvement and discovery. 

With the right AI tools for ISVs, it’s possible to develop intelligent applications that anticipate user needs while enhancing data privacy and security. In addition to elevating customer experiences, many software companies are tapping into AI to streamline development and go to market faster.

Customer trends driving AI transformation

We’ve identified four key customer trends that are driving AI transformation and presenting significant opportunities for software companies. According to our customers, AI makes it easier for their organizations to:

1. Boost customer engagement. Organizations are improving customer engagement through AI-powered self-service capabilities. This allows companies to deliver engaging, personalized interactions and create more meaningful connections with their customers.
2. Elevate employee experiences. Teams are using AI tools to automate repetitive tasks and gain valuable AI-driven insights. This empowers employees to focus on higher-value activities, improving their overall work experience.
3. Reinvent business processes. AI is reshaping business processes through process automation and supply chain optimization. This allows organizations to streamline operations, reduce costs, improve efficiency, and drive business growth.
4. Accelerate innovation. Organizations across all industries are tapping into AI to innovate faster and gain a competitive edge. Research and development, product, and engineering teams are taking advantage of deep AI-driven insights and self-learning tools to boost productivity, streamline processes, and make more informed decisions.

These trends represent the next leap in computing and technology, opening new possibilities for ISV partners to integrate advanced AI features into their solutions. Companies like PTC and Relativity are using AI-based solutions built on Microsoft Azure to deliver exceptional value to their customers. These success stories highlight the tangible benefits of AI, from increased efficiency to enhanced customer satisfaction.

Differentiate with AI-powered experiences: Insights from Microsoft Ignite

During our Microsoft Ignite sessions for AI for ISVs, we introduced updates to Azure Machine Learning, Microsoft Azure OpenAI Service, and Microsoft Fabric designed to help you stay ahead. For example, the Azure integration with Weights & Biases will give developers more ways to track, evaluate, and optimize Azure OpenAI models. Using these tools, developers can automatically track various aspects of fine-tuning jobs, compare model versions, and evaluate generative AI-powered apps. 

We also announced curated resources and AI readiness programs, including our new Microsoft ISV AI Envisioning workshops. These free events are designed to help you keep your skills sharp and your offerings competitive. Learn how to empower your team to build AI-powered apps confidently with hands-on guidance in 1:1 technical consults or join our AI Envisioning workshops to get a framework for developing generative AI solutions. All of this is underpinned by Azure Essentials, a collection of resources that includes foundational guidance, best practices, and dedicated training to help you elevate security, reliability, and ongoing performance for your cloud and AI workloads.

Transform your development experience and ship faster

One of the most significant advantages of AI is that it helps streamline and speed up development. At Microsoft, we’re always looking for ways to improve the developer experience, including giving your software teams AI tooling at their fingertips so they can move faster. Comprehensive platforms like Azure AI Foundry and GitHub Copilot allow developers to innovate rapidly, reduce time spent on repetitive tasks, and free up resources to focus on what truly matters—building great software. These tools deliver personalized technical guidance, ensuring your developers have the support they need to succeed.

Azure AI Foundry SDK, now in preview, provides a unified and comprehensive tool chain for building, testing, deploying, and managing AI applications and application programming interfaces (APIs) with enterprise-grade control and customization. Featuring a library of models and tools, this solution offers simplified coding experiences to boost developer productivity and help your organization responsibly scale your AI applications. 

GitHub Copilot for Azure in VS Code

GitHub Copilot for Azure in VS Code is built to simplify cloud development by bringing everything you need right into your editor. Instead of jumping between tools and docs, you can set up resources, deploy apps, troubleshoot issues, and learn about Azure—all without leaving VS Code. Just ask for help with tasks like configuring a Kubernetes cluster, finding a specific service, or resolving common errors, and Copilot will guide you. It’s designed to keep you coding, speed up deployments, and reduce the time you spend on setup and fixes.

Our free resources and technical guidance provide comprehensive support at every stage of your development journey, from AI readiness to sandbox credits for experimentation. Plus, you’ll gain access to our industry-leading AI products and tools with credits for Copilot.

Expand your reach and drive growth to the next level

Many ISVs are embracing AI to open up new avenues for growth. By building and selling AI solutions, software companies can reach more customers, expand into new markets, and scale their businesses.

The Microsoft AI Cloud Partner Program gives you the tools to create and market innovative Microsoft Cloud and AI solutions. With offerings for partners across business models and growth stages, we meet you where you are and provide the resources you need to drive profitability and innovation. Depending on your needs and goals, explore the following pathways to help you build, sell, and grow your software solutions.

• ISV Success: ISV Success helps you transform your development experience, build and publish to the Microsoft commercial marketplace faster, and accelerate sales with Marketplace Rewards. Join ISV Success for free and get access to exclusive benefits, including AI resources, a cloud sandbox, industry-leading developer tools, and technical consultations. As you sell through the marketplace, you’ll earn Marketplace Rewards that help you convert customers and close more deals—the more you perform, the more you earn.

Generating AI success with key investments

Plus, ISV Success now includes new AI investments spanning hands-on technical enablement, credits for AI development tools, and expanded benefits for ISVs with AI projects.
Our highest performing ISVs can also qualify for financial incentives to build and deploy AI-powered apps or migrate end customers to apps based in Azure.   

• Microsoft commercial marketplace: We’ve made key investments to help ensure that the Microsoft commercial marketplace continues to be the most partner-focused business platform, designed to help you reach more customers, simplify sales, and grow your business. This includes reduced agency fees for renewals, expanded multiparty private offers in key markets, and new ways to monetize professional services through private offers. Additionally, the Azure Sponsorship benefit that’s available through Marketplace Rewards is expanding for channel partners.
• Certified software designations: You can now set your company apart and increase customer reach with Solutions Partner designations. To qualify, you’ll need to meet performance, training, and customer success criteria—and customers must clearly identify that your solutions have the reliable capabilities they need. This distinction helps validate the quality, reliability, and relevance of your software solution. It also drives a positive customer experience by delivering on the value customers expect from solutions built on the Microsoft Cloud. When you attain a certified software designation for your solution, you’ll gain access to go-to-market, sales, and marketing benefits designed to propel your growth and fuel greater demand for your solutions.

Securing the future

In the era of AI, Microsoft is taking a bold step forward to help ensure the security and trust of our customers, partners, and the global community. As we strive to go to market with a unified AI strategy, we recognize the importance of security in protecting our digital future.

For Microsoft, security is not just a priority; it’s a fundamental commitment. We’re dedicated to providing innovative solutions that help safeguard our customers and partners from emerging threats. This unwavering commitment to security is reflected in our cybersecurity investment of $20 billion over the next five years. We’re dedicated to addressing the ever-evolving threats faced by organizations worldwide.

At the forefront of the digital security landscape, we’re leading the charge in helping to protect our customers and partners in an increasingly complex digital environment. Our comprehensive security solutions are designed to build trust and resilience, ensuring that our customers can navigate the digital age with confidence.

Catch up on all the announcements from Microsoft Ignite

If you missed 2024’s Microsoft Ignite, we encourage you to watch all the sessions on demand. During these sessions, explore the opportunities AI provides for growth and differentiation in the marketplace. Also, catch up on all the news for partners in this recap blog. 

Let’s build the future together and tap into the full potential of AI to transform the software industry. Join us in our mission to empower every person and organization on the planet.

¹https://www.microsoft.com/en-us/investor/events/fy-2024/earnings-fy-2024-q2

²IDC Infographic, sponsored by Microsoft, The Business Opportunity of AI, IDC #US51315823, November 2023. **Generative Artificial Intelligence: A New Chapter for Enterprise Business Applications, IDC Perspective #US50471523, March 2023.

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