What Is The Difference Between ISV and COTS?

As digital technology continues to evolve, cloud-based technology and computing processes are being increasingly integrated into modern day-to-day business processes. Studies have shown that 50% of enterprises spend more than $1.2 million on cloud-based services annually.

An Independent Software Vendor (ISV) is defined as a software publisher that generates, develops, and distributes commercial software through licensing agreements. These commercial agreements may either be one-time licenses or time-interval-based subscription plans. ISV companies retain all ownership and intellectual property rights.

Commercial-Off-The-Shelf (COTS) software is defined as commercially available packages software that is ready-made and instantly available for the use of the general public and other interested parties. COTS software is commercially produced and distributed to users and does not require any modification.

Difference between ISV and COTS

An ISV company is any organization that creates, refines, and sells digital solutions and software for certain operating systems. ISV companies usually operate in partnership with a larger technological company such as Microsoft, Apple, IBM, Google, and Oracle to manage organizational growth and obtain the necessary technological and promotional support. Examples of ISV companies include Amazon Web Services (AWS) and Microsoft Azure.

ISV companies typically offer their software through cloud-based mediums and sell their products to users using Software As A Service (SAAS) distribution models. Although end-users are enabled to easily modify the software’s source code, the ISV company retains all intellectual property and ownership rights to the commercially licensed software. ISV companies may need to partner with larger organizations due to a lack of required funding or access to digital innovation.

COTS software is defined as any software that is readily available to end-users through offline and online distribution outlets such as physical stores as well as software websites. COTS software is usually utterly accessible to any user that may require it and does not require any modification of the software’s source code. COTS software is mass-produced and is hence not tailored to fit the needs of a specific niche industry or organization.

While ISV software allows users to openly modify the software application’s source code to fit their specific preferences and fix prevailing issues, COTS software enables users to take advantage of software support channels where users can address their issues.

COTS software users are provided with time-interval based software updates that can fix bugs and errors to help ensure that the software is functioning properly and is meeting the preferences and requirements of its users.

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