How Snowflake Drives Revenue with Azure Marketplace

Nicole Smith:

I’m going to start recording. All right. Hi everyone. Welcome to Tackle’s webinar. How to drive revenue with Azure Marketplace. Thanks for joining us today. I’m Nicole Smith and I’m the VP of marketing at Tackle. You guys have probably all gotten some emails from me. So you might recognize the name and there’s going to be more emails to come because we’re recording the webinar today. So, we’ll share the recording with everyone afterwards. So if you miss something and have to jump off earlier or want to share it with everyone or anyone in your organization, that’s fine. And we’ll be sharing this afterwards. If you’re not super familiar with Tackle, we help software companies generate revenue through the Cloud Marketplaces. Our Cloud Marketplace platform reduces your time to list and sell products on AWS, Azure and Google Cloud Marketplace. We provide the granular transaction reporting behind that and also help you do that with limited engineering resources required.

Nicole Smith:

Today we’re going to be focusing on how to drive revenue with Microsoft’s Azure Marketplace and to help us with this discussion, we have some great panelists here from Snowflake and Microsoft. So we’ve put together a really good discussion and we’re going to be learning about how Snowflake got on Azure marketplace and their journey to marketplace and what got them there and what’s worked for them. What an ISV should be thinking about to ensure they get the most out of this new channel that they’re just starting here. What are some of the benefits of marketplace to sellers and what are some best practices to really accelerate the buying process for marketplace?

Nicole Smith:

So to really help us set the stage for this discussion, let’s do some intros and introduce you to our awesome panelists who are here today. So first up we have Paul Defeo and Paul’s the manager of Cloud Alliances North America at Snowflake. He manages the Microsoft partnership globally for them. And before he joined Snowflake, he actually worked at Microsoft. So very familiar with this. He worked in a variety of different roles related to Azure and Cloud Technology Partners. And he has more than 20 years of experience delivering technology, business and strategy lead to global fortune 500 companies. When he’s not working, you can find him doing some outdoor activities like golfing, swimming or spending time with his boys on the soccer field and basketball court. I love the background. You’re definitely repping Snowflake today virtually today. So welcome.

Paul Defeo:

Absolutely Nicole. Yeah, indeed.

Nicole Smith:

Any work background you want to provide in Snowflake for people that may not be familiar or what you all do?

Paul Defeo:

Sure. So Snowflake is the cloud data platform. We run on the three primary cloud providers, including, Microsoft Azure. We have built out our technology to be a cloud-based or cloud-only technology and focused on a variety of different workloads. So Data Warehousing being one, Data Lakes, AI and ML. Most recently our data exchanged a lot of customers to share information very easily and then do real time analytics against that data.

Nicole Smith:

We’re excited to have you here and learn from you guys about your journey.

Paul Defeo:

Thank you.

Nicole Smith:

Next up, we have Brian Bell. So Brian’s the director of business operations and program management at Microsoft and his team really focuses on helping partners grow their business on Microsoft’s commercial marketplace. He was previously at AWS and he led the AI category and launch SageMaker marketplace. He’s also held several roles in tech centered around machine learning platform, including Product Management, Marketing and Business Development. So, I’m noticing a theme here but when Brian’s not working, you can find him on the basketball courts, hanging out with his kids or playing the latest PC game. Welcome Brian. Thanks for joining us.

Brian Bell:

Thanks Nicole. Happy to be here.

Nicole Smith:

So, I know I’m sure everyone’s familiar with Microsoft if they’re on this webinar. But do you want to tell us a little more about marketplace and your team there?

Brian Bell:

Yeah. [inaudible 00:04:10]marketplace and app sources, we view it as the scaled motion to partner with Microsoft and so wasn’t sell through. And so it’s a place that you can package up list and sell your products, software B2B via this virtual storefront.

Nicole Smith:

Awesome. Good. Thank you for joining us, Brian. Last but not least, we have Jont Kingsepp and Jont is the senior director of business development, the team at Tackle. He’s responsible for our Microsoft partnership. Jont has more than 20 years of experience in enterprise software and services. He spends a lot of that time at companies like OutSystems and Pivotal. He actually started his career in corporate finance and as a chartered financial analyst and Tackle are remote first company. So Jont lives in Chicago with his wife and his three children. Hello, Jont.

Jont  Kingsepp:

Hello, Nicole. Hello everyone. And thank you for joining us today.

Nicole Smith:

Anything[crosstalk 00:05:11]

Brian Bell:

I’m surprised Jont we haven’t made this connection before, because I also worked in finance with the CFA. We’ll talk about that later.

Jont  Kingsepp:

Yeah.

Nicole Smith:

Thanks.

Jont  Kingsepp:

That’s funny. I spend hours with you [crosstalk 00:05:23]

Brian Bell:

Yeah. I never learned that about you.

Jont  Kingsepp:

Yeah. Interesting.

Nicole Smith:

Any basketball playing in your free time, Jont?

Jont  Kingsepp:

Yeah. It’s hockey, for me, so hockey and now I’d say my son is chasing me around the rank more than me chasing him.

Nicole Smith:

Anything else you want to add about Tackle on how we work with Microsoft, ISVs?

Jont  Kingsepp:

Yeah. That’s a good point. So Tackle as Nicole had mentioned that has a platform that really enables ISV vendors to list and transact more efficiently and effectively to any Cloud Marketplace. So we’re working with over 150 customers now across all three clouds. The partnership with Microsoft has really exploded over the last year. We’ve now listed over 30 customers of different products on Azure Marketplace. We have another dozen or so that will be done in the next few weeks and then have a full pipeline of activity. So we’re in full swing with this partnership. And also really excited to have both Brian and Paul joining us today. We appreciate the time you’re taking to share your stories with us and our audience about both listing and then transacting on Azure Marketplace.

Nicole Smith:

Awesome. That connects… includes our interests. So with that, I think let’s kick it off into the real meat of the discussion in the conversation. If people have questions, feel free to type them into the chat area. We had a lot of great questions come in already, on the registration form. So we’ll be asking those as well. Some of them will come up organically in the discussion and if not, we cover some of those in the QA.

Jont  Kingsepp:

Great. All right. Yeah. Let’s get started. Thank you, Nicole. As Nicole mentioned, today we’re going to cover a variety of topics all around listing and then transacting most effectively on Azure Marketplace. By the end of this session, you’re going to understand some best practices, how to maximize revenue through this channel and then how to accelerate the buying process. So we’re really excited by what we’re going to cover today. And of course, we’ll cover questions and answers at the end. So we’ve got about the next 33, 5 minutes of prepared questions we’re going to go through and then we’ll reserve time at the end for Q&A. So with that, Paul, I’m going to start with you.

Paul Defeo:

Sure.

Jont  Kingsepp:

You mentioned Snowflake is a pioneer in cloud data platforms, enabling every organization to be data-driven. So what were some of the drivers behind Snowflake’s decision to use Azure Marketplace as a purchasing channel for your customers to begin their journey with Snowflake?

Paul Defeo:

Great question, Jont. So, first and foremost, our platform, as I mentioned earlier strictly runs on the cloud provider. So that’s an integral delivery method for how we go to market with our technology. The marketplace’s natural extension as an adjacent market to extend sales capabilities and broadcast to new customers and new audiences. So we have some experience previously before we listed on the Azure marketplace with other providers. We found that a lot of interaction with our clients was more so around the purchase experience. So the control that they get within the organization at a BU level, so they can leverage in the case of with Azure, as of the controls and security measures, they have, who’s purchasing it, what business unit and who has access to the technology?

Paul Defeo:

So that’s one reason. Another reason is we found that internally for us to even get to the marketplace. And hence the reason why we worked with Tackle, was our engineering and product teams are really laser focused on delivering a great platform. That takes a lot of energy and time and work. And as we know, there is one thing you can’t get back in the day and that’s time. So really, our engineering team and product team said, “Hey, look, can we do this?” Certainly we can. But leveraging a platform like Tackle to help us list faster on the Azure Marketplace was about most important. So we definitely saved a lot of cycles and that process and hence the reason we went down that route.

Paul Defeo:

Then getting back to the original question of why the marketplace, what we are finding is from a procurement life cycle perspective, a lot of customers have large commandments in place with the likes of a Microsoft. So the ability to take advantage of those contracts and leverage the span that they have in the case of a Microsoft Azure enrollment or commitment, helps because that budget has already been approved and they can leverage that to buy technologies like Snowflake. Also, they have some of the integration in place with procurement systems like an SAP Ariba or Coupa. And there’s a variety. I’m just mentioning those two, there’s a variety of other procurement systems available the customers may use. But that makes it easier for them to justify the spend. And typically what we’re finding is maybe we can get customers to spend a little bit more as a result.

Jont  Kingsepp:

Okay. Great. Thanks. Those are three really compelling reasons to drive an Azure Marketplace listing. Brian, I’m curious for your perspective and your team is dealing with hundreds, if not more, on ISVs, that are both around various stages of listing and then transacting through Azure Marketplace. So curious, what you’ve seen in terms of what ISV should think about to maximize the investment in getting to Azure Marketplace. What are your thoughts?

Brian Bell:

Yeah. Thanks for that question. I think that’s key. One of the things we ask our ISV to think about is it’s not just an app store. It’s more of a channel, it’s a commerce engine and a channel. It helps with discoverability but you can’t just list something and forget it. You actually have to work the channel. You have to treat it like any other channel that you have existing. I mean, certainly we have three and a half million monthly active users coming to the marketplace looking for solutions. So it’s going to help get you some discoverability but you have to market and promote your solution. You have to sell that sizzle.

Brian Bell:

You also have to think about if you’ve been selling in an enterprise sales motion, how might you adopt that to the online marketplace? How might you think about pricing and packaging and free trials? We’ve had some ISVs think of… do a freemium version or a trial version that converts. One of the awesome things about Microsoft is if you’re in the partner network, we automatically share data. So any lead is yours to own and follow up with automatically that’s your partner center. So you can integrate with the CRM. The thing here though is thinking about the segments. Because if you’ve been selling top down, you might be thinking about how you might sell bottom up. You’re going to meet the users where they are, they’re data scientists, IT pros developers looking for a solution right now that they can try.

Brian Bell:

Think of how a developer might look on stack overflow for a solution to a problem. That’s what they’re looking for. They’re looking for a solution to our problem. They want to try it right away and deploy it and marketplace will help you do that. So how do you adopt your pricing, your packaging, your promotion, your four P’s of marketing for this place of marketplace. You could take advantage of the… how might you adopt and accelerate your existing marketing programs through something that marketplace rewards, which is something we offer. So as you transact more, how might you accelerate it?

Brian Bell:

I think it’s a phased approach. I think, we have some companies that’s… they start in marketplace and they only sell through marketplaces as their distribution engine. And some companies that have an existing sales motion, marketing motion and they need to adopt. And then the other thing to think about is, is your solution, are you on Azure already? Are you architected on Azure? Because if you deploy through marketplace, you’ve got to architect on Azure. The reason you want to do that is so you can get to co-sell because you unlock other benefits with co-sell such as lower fees, increased visibility throughout the field and through the partner channels, different merchandising in the marketplace, things like that.

Jont  Kingsepp:

Okay. So that’s quite a list of things to think about. But Paul, I’m curious. What I heard from Brian, so we can’t set it and forget it. You got to think about pricing and packaging-

Paul Defeo:

Sure.

Jont  Kingsepp:

… meet users where they are. I love that. We often talk about that is… your sellers should be selling where their buyers want to buy. And increasingly that’s cloud marketplaces like Azure Marketplace. The marketing programs, I would agree, as Tackle-

Paul Defeo:

Absolutely.

Jont  Kingsepp:

… as an ISV to marketing rewards program, a marketplace rewards program is something that we leveraged. So anyone who has listed already or is considering that, make sure to look into that, that’s a big benefit. The phase approach and then the solution of course, where you’re running and deploying today. So that’s a great list. Paul, I’m just curious, are those some of the considerations that you had going into it or what’s your reaction is an ISV that has listed and is already transacting?

Paul Defeo:

I mean, certainly Jont, there were topics we had interest… Snowflake had interest in and in particular, how expound upon some of the topics that Brian mentioned. So the marketing channel, I think, is an important concept. He mentioned set it and forget it. It certainly is not a set it and forget it. I mean, you have to continue to iterate just like you are in the technology spectrum. You’re continuing to get better and better with your product. And so you have to treat the marketplace as such and there’s a litany of different offerings, including one, he mentioned the marketplace rewards program that we find very advantageous, entering some new channels, running social campaigns, drumming up new business, through those capabilities. And Microsoft has been a good partner to help us down that journey with Tackle.

Paul Defeo:

And like I said, find new avenues to reach out to new customers. So, that’s one thing that’s great. That’s just the visibility that you would get. But again, to Brian’s point, you have to leverage and take advantage and put the work in to make that happen. That would be any marketplace for that matter. So treating ad is another reseller channel, as a channel and a mechanism to deliver and sell your product. As far as other things, you mentioned some of the simplification on the procurement process, I touched upon this earlier. What we’re finding with our customers is they already have a lot of those solutions in place with the provider.

Paul Defeo:

So leveraging that capability and making it easier for them to extend and buy on behalf of business units or engineering teams, development teams, developer community, is certainly a critical component that we are seeing actually real time with our customers. Their interest is absolutely there. I did touch upon this a little earlier but that drawdown effect, meaning that they can leverage that contract and spends with Microsoft to take advantage of technologies like Snowflake, it’s certainly can truncate the procurement cycle and make that a lot quicker. So we’re all about increasing sales. Certainly that’s a great way of doing it and making our sales cycles a lot faster.

Paul Defeo:

There’s some business flexibility and that so new ideas that can be created in how you deliver the product. And the creativity of those vehicles through the marketplace and customers asking for, “Hey, can I purchase you in this manner?” Sometimes worries and even finding that as new ways to create structures for our contracts and getting new ideas from the is a great way to doing that. One last topic I will mention and we can open it up and let Brian weigh in as well is, he mentioned the list wants and sell everywhere. It’s a global marketplace, so you’re not bound. I know this is primarily, it looks like a lot of folks from North America but you’re not bound to just North America. There’s multiple currencies, tax implications that go into listing on the marketplace and Microsoft handles a lot of that for you. So that’s a great thing to have and it allows the flexibility to sell maybe to potentially markets you never thought you could sell to previously. So it’s something to consider.

Jont  Kingsepp:

Yeah. That’s a great list of benefits, I’d say, is anyone should be thinking about a listing and transaction that you can realize through the marketplace. One of the comments you made really about this is a new Avenue to the customers. A lot of the ISVs that we talk to is come in initially thinking, I’m going to list on Azure Marketplace and then all these leads are going to come in. So you’ve heard a couple of themes already but there’s an investment that’s required. This is a new channel that really should be treated as such. I think, ISVs that are getting the most success from transactions and visibility and inbound leads, et cetera, are the ones like Snowflake that are investing the most in it. So just something to think about as you consider this.

Paul Defeo:

Certainly. [crosstalk 00:19:12]

Jont  Kingsepp:

Brian, I’m curious, so Paul just went through a list of benefits through Azure Marketplace from the seller’s point of view. I’m just curious, is there anything that you can add to or what you’ve seen from other ISV sellers or ISV partners that you’ve worked with about the benefits of selling through Azure marketplace?

Brian Bell:

I loved that one of the key benefits that he mentioned right at the end there is the list once and sell everywhere. I mean, you get the Microsoft Azure Marketplace scale by listing and deploying and doing the commerce through our marketplace. So you can sell in countries that you may have not even considered yet. We handle all the tax and legal implications of doing that with our standard agreements and tax remittance. And so we’ve had startups coming out of the startup program in size companies, even large companies say I never even considered, I’d be selling my product in that country. And so it gives us that ability to activate that virtual channel.

Brian Bell:

The other thing to drill down on was the different kinds of billing models that are available. So it’s not just deployment, which there’s tons of different ways to deploy in the marketplace. You can deploy as VMs or a cluster of VMs and an ARM template. You can have a SaaS offer, you can build your platform as a service and sell it through the marketplace. But it’s also all the billing options that you have that now your engineers, what Paul was saying is absolutely right. You don’t actually have to go back to your engineers and say, “Hey, can you design this whole different business model for us? Can you engineer and create this whole business model?” You can do that inside the marketplace with our APIs.

Brian Bell:

So if you want to charge per hour, which turns out some of these cloud providers out there made a huge business charging by the hour for software. And so you can actually unlock that, “Hey, I’m just going to pay 50 cents an hour, whatever it is for my software.” So developers can just start using it and see if they like it. And then your enterprise Salesforce can come in and engage in cross sell and upsell that new user. So I think that billing model flexibility is key to unlocking new segments of the market.

Paul Defeo:

Absolutely. I do see some questions coming in. So the question wouldn’t be on my end, do you want to try to answer them in the context of these questions, which I certainly can do? And so come Brian or do we want to wait to the till end of the presentation?

Jont  Kingsepp:

Yeah, no. I say we address them as they come in and we might turn into further questions so I [inaudible 00:21:42]get away.

Paul Defeo:

Sure. There’s one that came in around the private offer versus a public offer. I can speak to that because we have both… so certainly there are a lot of considerations. I’ll try to answer the other question. Can we restate the investment that Snowflake has made through the marketplace? So I certainly can try to weave those two questions together. The first, as far as the delivery mechanism, certainly as you scope out what you want to do with the Azure Marketplace, you have to make considerations on how you can actually submit that procurement process to customers.

Paul Defeo:

What’s the delivery mechanism. So from a public offer, that’s typically packaged offerings that you see, it could be a litany of different technologies packaged on a VM. It could be something that you deliver even as a service by seat base or consumption model. And that’s great. So those are fixed pricing models. You can infuse things such as meter billing and allow to pass that billing data over and expound upon the consumption based on the customer’s interest in that product. So, that’s public available, everyone can see it and they can purchase it and test the product that way. So, that’s low friction model.

Paul Defeo:

And then there is the private offer, which is not seen from… it’s not publicly available. We leverage that as well. And that private offer allows you to do more customization as far as delivering contracts and the type of [inaudible 00:23:13] monthly. You could do an annual, even some creativity on true payments and renewals that could you do that with a public offer? Certainly. It may be a little bit more challenging but from a private offer that flexibility of a contract perspective and the control of the customer experience of how they’re buying your product is certainly attractive and as part and parcel to why Snowflake decided to list the service in that manner.

Paul Defeo:

So what we find is customers are able to leverage that capability again through the Azure Marketplace, except the offer once it’s published specifically for them. And then from that perspective, the private offer becomes theirs and they can leverage on ongoing basis purchase on the annual basis, true ups, things of that nature. So I hopefully that answered that question on the private offer. And then I think there’s one more that was offered to just the investments. I’ll be quick. And then Brian jump in as well to expound upon the private offer and public offer capabilities of it, certainly in the investments… again, that’s something you have to make a decision criteria on.

Paul Defeo:

So we’ve spent a lot of time upfront building a business plan. What do we want to do with the marketplace? And we certainly wanted to take advantage of the marketing capabilities. We mentioned the marketplace rewards. So the advertisements and the capabilities on that front, also we looked at it as, how do we want to list? And as I mentioned, we leveraged Tackle lists with the Azure Marketplace. So there are obviously some technology investments on our end working through Tackle to take advantage of the Microsoft API set. So there’s the Microsoft marketplace API. And then you have the capability on the billing APIs to enter those meter dimensions. So passing that billing information, if you want it to on a realtime basis.

Paul Defeo:

So just looking at those different models, how does your company deliver the software or the platform, the technology, is it packaged? Is a software as a service? All those considerations go into what investments you’re going to want to make and then how you want to deliver it as a public or a private offer. So hopefully that answers the question and certainly I’d love to pass over to Brian to add anything to it.

Brian Bell:

Yeah. Thanks, Paul. I’ll say a couple things on private offers. One thing to consider is what I was talking about with meeting your users where they are. And so if you adapt your business model or your pricing model, deployment model in the marketplace to get interest and get somebody trying your product, there’s going to come a time where they want the full fledged enterprise edition with all the bells and whistles. We’re going to share that data, that lead data with you and your Salesforce. If you have one we’ll be able to… or your marketing team will be able to engage and nurture that customer and cross sell and upsell them and eventually perhaps get a private offer, right? So it just enables that customization of pricing and packaging, which gives you the flexibility for the business rules and the commercial rules inside the marketplace.

Brian Bell:

Marketplace rewards is our way of meeting you where you are in your publisher journey. So it starts off with a set of benefits for listing a transactable offer in the marketplace. We help you optimize your landing page and your contents and we do some social promotion, things like that. And then as you sell, we scale up the rewards. So as you invest in the marketplace, we invest back in you. So it’s like the more you put into the marketplace, the more you get out. And so we’ve designed a program, we have a whole team of wonderful team of marketing folks that have designed this scaled program. So as you scale marketplace, we scale with you and unlock additional benefits.

Jont  Kingsepp:

Yeah. And I’d say just from a Tackle perspective on private versus public offers, we’ve processed thousands of transactions and a lot of volume of most of them, the vast majority are through private right now. I think with Azure Marketplace in particular, what we’ve seen is a great improvement in of all the investments over the last six months or so, is flexibility around how you convey those private offers, mostly the custom terms. So I think there’s a lot more flexibility that’s coming on a month to month basis around this area. This is the one that area that has the most traction. And Paul, I see another question and I don’t think you hit it yet but I think it’s a good one. It’s about the type of transactions that you’re putting through Azure Marketplace and maybe just by the discussion around private versus public, it answers itself. But are you seeing net new deals coming through or are you taking[crosstalk 00:27:53]

Paul Defeo:

Yeah. I know that’s a topic we certainly want to talk about. So what deals are best through the marketplace and certainly what are we seeing net new opportunities as well as existing ones. A little bit of both. I mean, certainly initially we had a demand of from our customer base that was interested in purchasing through the Azure Marketplace. And like anything else that helps with the business justification to invest all the cycles that we just mentioned. So that initially is what we saw but what we’re starting to see in leveraging some of the marketing campaigns and capability and outreach is more net new customer interest.

Paul Defeo:

And as we go into… Brian mentioned that phase two approach where maybe we launched a public offer or trial capabilities alongside of our private offer to the purchase Snowflake. I think we’ll see more and more interest of net new customers trying Snowflake and delivering that model through the Azure Marketplace. So it’s certainly a little bit of both but initially, certainly it was the customers that express interest with Microsoft and buying it through the marketplace. Anything else Jont you want to cover on that topic[crosstalk 00:29:09]

Brian Bell:

[inaudible 00:29:09]What we’re seeing is we’re seeing a trend in procurement behavior, especially around large enterprises in governments, where they only want to transact in the marketplace. And that’s because they already have the commercial relationship with Microsoft. They already have the commitment, they already have the contracts in place. Their procurement department already understands the billing and the payment terms. And so we have actually large enterprises and governments telling their ISVs, their software vendors. “Hey, I only want to buy through the marketplace.” And so if you’re not in the marketplace and you’re selling into large enterprises and large governments or just any government, you may want to consider making sure you have transactive offers available.

Paul Defeo:

That’s a very good point.

Jont  Kingsepp:

That’s a really good point. This might be a good time to introduce a question that came up, which is, let’s see. How do you position the marketplace with the customer and what’s the messaging from the reps? At what point in the sales process? Oftentimes the customers are not aware of the marketplace mechanisms. So, how do you explain the benefits?

Paul Defeo:

Jont, why don’t I talk about it because I deal a lot with the customer front and I know Brian does as well. I’ll tell you from the Snowflake perspective and I certainly would like Brian to weigh in. So from our customers and what we’re seeing and perspective customers or clients at Snowflake. What we’ve done internally is built out a lot of benefits and listed that to our field sellers. So they’re absolutely aware that we are published on the marketplace. So if that topic comes up, they can answer it directly with our customers and mentioned that yes, that is a viable option for you to purchase Snowflake through the marketplaces. So I think that’s one thing you need to consider is what type of information, frequently asked questions or documentation. Do you want to publish internally for your Salesforce to let them know that’s available?

Paul Defeo:

As far as the benefits and what we’re seeing in that space, I mean, certainly going back to leveraging the contract mechanism that they already have in place with Microsoft is certainly a large benefit. A lot of customers are interested in shortening the sales processes, it’s definitely a benefit that we see where customers are potentially even willing to spend more or shortening that sales process and cycle, is another one. And then as far as other background data as far as how you’re leveraging the Microsoft Salesforce, what we’re seeing is we are, as Brian mentioned, part of the co-sell program. So the marketplace as an extension of co-sell and there are benefits that potentially those Microsoft sales teams can gain from going through the marketplace. And a lot of that is through the co-sell program.

Paul Defeo:

What we’re seeing is the interest from the Microsoft sales teams because we’re in the marketplace. It just, again, that low friction delivery for their customers. Since we’re a software as a service provider, we do not run in the customer’s tenant. So we run it on our own or a multitenant service. That delivery mechanisms prevents that usage or consumption that Microsoft sales teams would typically see in the customer’s environment. But what we see is that marketplace channel helps and helps ease that pain and certainly allows them to espouse all the benefits to their customers of Snowflake and purchasing that through the marketplace. Now, Brian.

Brian Bell:

Yeah. Well said. I mean, very well said. I think the only thing I would add to that is we do have programs in place for multi-tenant SaaS providers to report that ACR so sellers can get comped on that ACR, the Microsoft[crosstalk 00:33:08]

Paul Defeo:

Azure Consumed Revenue. I’m just making sure everyone knows the ACR.

Brian Bell:

Yes. Thank you.

Paul Defeo:

Absolutely, yes, yes. So the consumption of Azure. Yeah, it’s certainly, as I mentioned, I didn’t particularly talk about that through co-sale but that’s certainly a benefit. And why Microsoft sales teams would be interested. But again, I do want to reinstate, just going back to the investment, I mean it’s certainly the documentation and what’s available to your Salesforce is critically important. And then highlighting those points to make sure they’re well equipped when a customer asks, “Hey, can I purchase this in the marketplace or do you have a timeframe when this would be available?” You can answer that question.

Jont  Kingsepp:

And we’ve seen that as well. So we’ve talked about investments to relate to fire up this side channel, the marketplace as a channel. And at Tackle, what we do is we talk to all of the sales teams for our customers because unless you’re also investing in there, so we’ve got the effort to get online, we’ve talked about marketing but from a sales perspective, you do need to be enabling our sales teams to carry a marketplace conversation. So, which customers are primed to go through Azure marketplace? And a lot of that depends on the size of the relationship, et cetera. So I think it’s a good question. A lot of the customers, as was pointed out in the question, they’re not aware that this is an option yet. And so it’s up to you, the ISV to really enable your sales team and make them equipped to carry the conversation with the right customers.

Paul Defeo:

Absolutely.

Jont  Kingsepp:

[inaudible 00:34:33]thought that was a great question. When we’re talking about resellers, there’s a couple of questions that have come in and Brian, I’m curious to get your thoughts on this. Microsoft talks about their 70,000 a reseller marketplace channel. How do you address competition between VARs? Can you maybe talk about the reseller program and what that looks like through Azure Marketplace?

Brian Bell:

Yeah, I mean, one of the differentiators of Microsoft is we make the majority of our revenue through partners. So our partners success is our success and we view marketplace as an engine to unlock the 70,000 resellers that are out there reselling Microsoft solutions. So it’s another example of the list wants to sell everywhere. You can actually not only have this direct channel with free trials and different billing models and all kinds of different deployment models. But now you can unlock and do that worldwide. But you can also do it with the CSPs where you list once and then we’re literally right now we’re paying the CSPs to sell your solution that’s listed in the marketplace and there’s more capabilities on the roadmap.

Brian Bell:

So you’re going to see a lot of investment in that channel. Because it’s a very important channel for Microsoft. And so basically, I mean, when I talk to sellers, when I talk to publishers, their eyes light up because they go, “70,000 resellers, I could list.” And now it’s a channel of the channel, basically. It’s this channel platform to unlock this whole other channel. And you might have handful of channel partners right now that are reselling your solution. But if you’re looking to resell your solution and unlock that, it can be very powerful.

Jont  Kingsepp:

Yeah. I think[crosstalk 00:36:21]

Paul Defeo:

It touches upon the other question here, Jont, how do you address the channel conflict with Value Added Resellers? The VARs, I mean many of VARs, the Microsoft works with obviously different nomenclature as an MSP or cloud solution provider, even in the LSP, which would be those selling the licensing and the Azure as well. I mean a lot of them are Microsoft LSPs or CSP cloud solutions providers where they’re delivering the capability to manage the customer’s environment for them and selling Azure on behalf of Microsoft. So that that channel allows you to unlock some of those capabilities through the marketplace. So there shouldn’t be channel conflict that they are, certainly, if they’re not, I mean, they could be but to Brian’s point, maybe going back and justifying why the VAR should consider that for their business model. As we all know, it’s becoming a cloud first world. So certainly, we are seeing more and more interest to leverage the marketplace as a vehicle to sell, including our reseller community.

Jont  Kingsepp:

Yeah. A quick question just popped up on that topic, Paul, for you, Can you characterize a percentage that goes through the channel currently? The marketplace transactions, I guess it’s[inaudible 00:37:36]

Paul Defeo:

I mean, the functionality that existed with Microsoft to do this private offer through a service as a service delivery model for the likes of Snowflake is fairly new. So we were one of the first providers, one of the first providers to list once that functionality exists. So I think what we’re seeing is… I wouldn’t say it’s a large percentage today. It is growing rapidly and from a double digit. It’s been about now a little over six months since we’ve listed. We’ll continue to see that percentage uptick. I mean, certainly initially our delivery model is that direct channel. We offer the reseller community, we’re building out things like managed service capabilities and things of the like.

Paul Defeo:

So that dovetails very nicely from what we’re doing with SIs systems integrators and resellers in general. So I think we’ll see that percentage continuing to spike. And then it says what percentage market player or via the 70,000 CSPs. So, we’re looking as I mentioned to hone down that list and look at what of our existing community of resellers are also CSPs with Microsoft. So, that’s something that we have in process. I would call that a phase two approach where we’re going to start to get more prescriptive with our reseller community that are also a part of the Microsoft ecosystem. And once we unlock that capability, that should, again see more volume of transactions through the marketplace channel.

Jont  Kingsepp:

Okay. That’s a great answer. I think it answered a few questions that have been coming in on that. Brian, I got one for you. Paul talked about marketplace, how it’s collapsing sales cycle, which is great. Every ISV, every seller wants to hear something that collapses a sales cycle. But from a listing perspective, I know that there are a couple of features that can accelerate the buying process. Two VAR questions, one, can you talk about the different features or different ways that that can be associated with an offer to give users or ultimate buyers an opportunity to test before they buy? And then two, there’s been a number of questions that came in just around marketplace fees. So the fee structure. So I guess two part question to start with you Brian.

Brian Bell:

Yeah. So I think the first one’s about deployment methods?

Jont  Kingsepp:

Yeah[crosstalk 00:39:56]

Brian Bell:

I think I said a few things before but I probably brushed over it pretty quickly. You could basically make a trial that’s a limited time version of your product. So it’s fully featured, it spins up either in your tenant. Like you’re paying for the infrastructure. It’s spends the customer infrastructure so they can try it before they buy it. And then your Salesforce can engage and cross sell, upsell or try to convert to a paid offer. You can do a freemium model or there’s this version of your software that’s… it is transactable but it’s basically free forever and it’s very limited. That’s a very popular internet business model that we see pretty much anywhere on the internet.

Brian Bell:

You could do a free trial that converts to a paid, which is probably what I would recommend. So you get the configurable days, seven days, 14, 30, even 90 days to give the customer the user a chance to use the software for a limited time. Then it converts. They can cancel of course. And anything in between, the almost anything you can think of, we have cuts to meters, so you can need air on anything you can think of. I mean, they’re customers, right? So you can meet her on nodes, on VMs, on bytes of storage, terabytes of storage, calls to the API. I mean, the sky’s the limit. One of the cool things is like, it’s all built for you. You just have to build the integration with the APIs.

Brian Bell:

I hope that answers the question. Feel free to follow up and I’m glad to drill into any of those. I think on the fees, we’re constantly looking at these and evolving them and responding to the market. Right now we have a… if your IP co-sell, so your solutions IP co-sell, which you can look that up. I won’t go too far into it but basically you have to have a certain amount of Azure Consumed Revenue. And we do an architectural review and we make sure that you have all the materials and it puts it in the quote list. The price list for Microsoft. On SaaS, you get a 10% fee on revenue.

Brian Bell:

We have seen partners that have huge amount of ACR and the [inaudible 00:42:19]of tens of millions a year, hundreds of millions that we can negotiate fees. So, that’s an invitation. Reach out to me. I can help you with that. There are more announcements to come that I don’t want to say too much on right now but look in the next… I think Inspires coming up in July. So we’re going to have some announcements around agency fees coming your way in that timeframe.

Jont  Kingsepp:

That was great.

Paul Defeo:

So Jont and Nicole should we… I know there was a bunch of pre-scripted upfront questions that were surfaced before the webinar. Do you want to try to go through that list to make sure we answer that? I’m happy to answer. I think Brian is as well. Any of the other questions that we had put together but I think we’ve pretty much exhausted that list.

Jont  Kingsepp:

That was the next topic. We shift through all the open Q&A questions. We’ve got well over a dozen questions that have been sent in prior to the webinar. So Nicole I’ll turn it over to you to maybe tee up those questions and then for those listening, feel free to open up that Q&A chat and send the further questions that you have our way.

Nicole Smith:

I think one interesting that came in before the webinar was how has COVID-19 changed the game?

Paul Defeo:

[inaudible 00:43:37]Who would you like to go first? Brian or myself?

Nicole Smith:

Brian. You start.

Brian Bell:

Okay. COVID is interesting. Obviously[inaudible 00:43:48] living through it, right? On a positive note, I’ll say it’s a shared cultural experience, right? We’re all living through this thing and we haven’t had one of these really… since probably 911, this shared cultural experience of we’re all going through this together around the world really. Which is impactful as it has been. I think what’s happening is we see some partners accelerating their business. Some are pulling back. I think particularly like Bricks-and-Mortar retail, I think has probably been the hardest hit. I think it’s accelerated some secular trends that we’re seeing. Internet distribution, for instance. So I think we’re seeing a lot more companies saying, “Hey, I got to figure out my internet distribution model because everyone’s working remote and we can’t go visit and do a complex sales motion. We got to meet people where they are.” Which is right now is at home. And so if anything, I think it’s accelerating this trend towards virtual work, virtual purchasing and virtual sales and the marketplace is obviously benefiting from that transition.

Paul Defeo:

Yeah, I mean, I certainly agree the work from home aspects. I think from a multitude of fronts. So look at the technology we’re using today. There’s zoom, there’s Teams. The adoption of those utilities to interact with colleagues and customers is used on a daily basis and you’re seeing our wonderful glowing faces here on video using that very technology as it pertains to the marketplace. And what we’re seeing from our service there is acceleration, as Brian mentioned, healthcare. I think folks in the financial services industry and the adoption of using the analytics especially COVID-19 datasets, the infection rate via geographies where that’s happening, it really changes that dynamic of how they’re delivering their capabilities to customers. And we’ve seen a huge jump to the cloud as a result of that. More and more customers that who would’ve thought. It’s not as easy to get deliveries and install technology into your existing data center.

Paul Defeo:

Maybe this data center is closed. Are you using a third party provider to manage that for you. They may have some limitations. So the acceleration of a cloud certainly is happening as a result of that. We are very low friction. We’re delivered as a service running on the cloud. Anyone could go and use it instantaneously and go sign up right now and use it. So I think that’s of interest to clients. And as far as this interaction that we’re all talking about working from home, we see these existing projects where maybe they’re on the back burner. Previously they didn’t have time to get to it. Now that’s definitely not the case. People working from home, they’re not distracted with other meetings. Necessarily what happen in a business environment within their workplace.

Paul Defeo:

So we’re seeing more customers wanting to invest as Brian saying, getting ahead of the curve as we come out of this pandemic and crisis, they’re going to be better served to get more business with their clients and help their existing customer base. So I see an acceleration for sure. And guess what? The marketplace is a good way to try those technologies out very easily.

Jont  Kingsepp:

Yeah. And I’d say from a Tackle perspective, there’s a couple of thoughts. One, I would echo that last comment about accelerating business through marketplace. We’ve seen an increase in our interest in our platform over the last few months, which is interesting. It just was reading a Gartner report that was published in late April suggesting that they’re seeing an increase in acceleration from procurement perspective to marketplace transactions as a result of COVID. So I do think marketplaces are really enabling a more efficient way to both find and locate and then transact on software services and products that developers and business users need.

Jont  Kingsepp:

From a remote perspective, I think it is interesting. Tackle has always been a remote first. A company from day one doesn’t mean we don’t have offices, we have a couple but our mindset is always remote first. So it’s been interesting to see people adapt to it. I think it will be interesting as we emerged from COVID just the long standing effects of remote work because I think it’s proven that we can operate relatively efficiently here in our home.

Paul Defeo:

So I think we’ll say, we’re probably working longer and harder hours than before the crisis hit.

Jont  Kingsepp:

I would agree. [crosstalk 00:48:30]

Brian Bell:

Don’t get all the water cooler time.

Paul Defeo:

That’s true. [crosstalk 00:48:36] Absolutely.

Jont  Kingsepp:

Maybe even more productive.

Brian Bell:

Yeah. Be more productive.

Jont  Kingsepp:

That was a good answer. So Nicole, we’ve got a few left. Do you want to actually [inaudible 00:48:49]

Nicole Smith:

Yeah. I think another good question to cover might be, if there’s any planned innovations within my marketplace within Microsoft, like any more pricing options, are there any levers for virtual machine based deployments? That was one of them that I think we might be interesting to hear about.

Brian Bell:

Yeah. I mean we were investing deeply in marketplace and the functionality around pricing and deployment and channel. I would invite everyone to make sure you go to partner center, sign up for the partner network, get in the marketplace community, you can become a marketplace champ. There’s a variety of ways to get involved and stay connected. We do… I think it’s roughly monthly or every two months public roadmap updates. So I would look for those and after the call we can share links to those. So yeah, a variety of investments are coming on the roadmap to expand those capabilities.

Jont  Kingsepp:

Yeah. And we’ve seen… I mean, I think it’s great. Every Monday we’ll come in and there’s something new that’s landed. There’s new features. So, the amount of investment that Microsoft has put in to Azure Marketplace over the last year plus is really starting to pay off on a continual basis. So it would be good to see that public roadmap but it’s exciting to see these changes come as well.

Nicole Smith:

Maybe one other question that would be a good one to cover would be, how can a small organization versus a big organization differentiate a marketplace when it comes to revenue models and what are some best practices there?

Paul Defeo:

That’s an interesting question. I mean, we’re in the middle, obviously growing pretty rapidly. I think from a small organization, if you don’t have a large Salesforce, that’s a natural extension. The leverage the marketplace as a virtual Salesforce and that channel to deliver the technology and make it easier. If you’re a larger organization, like ourselves with a lot of feet on the street, good sales coverage. It’s going to lean, I think more toward… as Brian’s kept saying, meet the customer where they want to purchase the technology. And I think that’s been our Avenue and allowing the customers to slack what’s the best way to purchase Snowflake.

Paul Defeo:

The larger organizations tend to lean in that direction from a control perspective. What we’re seeing is customers, as I mentioned earlier trying to expand or come up with different ideas, leveraging their commitments with these cloud providers. Microsoft in particular to make it a much larger procurement cycle. But certainly, I mean, I love Brian to talk about the varying sizes, from our… I can’t really speak from a true small company perspective. We have the luxury of having a great and large geo Salesforce and they’re all over the world. So anyways.

Brian Bell:

Yeah. I think what we think about is, it’s the same way when a company starts. One, they have an idea for a product and then they try to go iterate and get product market fit and they make a decision when they start building. So we’re to build and we hope that decisions on Azure, sometimes it’s not obviously. And then the next decision is how do I sell, now that I’ve built a product, how do I actually deploy and sell and distribute and bill and operationalize this thing? That’s a whole another business model decision. We hope that in a future and we see this happening right now. Forrester did a study where this is increasing year over year. Each year is… and we’ve seen this with some ISVs, is they just choose to only sell on marketplaces.

Brian Bell:

That’s their distribution engine. That’s their backend, that’s their billing, that’s their collections. And you think about all the infrastructure that goes into doing all those commerce and channel engine things and tasks and all the build out. And you can make that decision to just do it in a marketplace and we see big ISVs and small ISVs doing just that. I think from a big company standpoint versus a small company, I think small companies will be more able to pivot and try new business models easier. I think big companies, they’ll take some time. You think about a big company, they’re set up to execute a business model repeatedly and maximize profits, right?

Brian Bell:

A small company is still trying to figure out how to do that and so they’re going to be able to… the small and midsize companies out there are going to be able to experiment and probably your VP of product or VP of marketing to be like, “Yeah, let’s do a freemium model. Let’s do a per hour models. Let’s throw some marketing dollars at it and give it a shot and try it.” And you can start thinking about different segments but usually like a series A or B company, they’re trying to find product market fit. It’s one repeatable segments, slice of the market, a single product and then you’re landing and expanding that. Market post can help you do that, help you grow and expand to the different deployment methods, segments of the market, billing models, business models.

Paul Defeo:

Yeah. I think Brian said a lot of the agility that a smaller company is going to have, it’s going to make them and make it easier to invest in the marketplace is to launch a service. So, as you grow and your larger, that becomes more difficult to do. So certainly I would think with respect to revenue it’s going to be skewed probably if you’re a smaller company, larger strings of revenue would come in versus if you’re larger, the percentage may be slightly less.

Nicole Smith:

Yeah. That’s awesome. I think we covered a lot of… Jont, sorry, did you want to come in?

Jont  Kingsepp:

I was just going to say, I think you’re looking at the clock. We’re hitting the top of the hour and I think we covered most of… if not all the topics [crosstalk 00:55:01]I want to thank Brian and Paul for joining us today. I think this was an incredibly helpful session. I think we hit all the objectives that we intended, so hopefully the attendees found that to be the same. But with that, Nicole, I’ll turn it over to you for any closing comments.

Nicole Smith:

Yes. I just appreciate you guys doing this. This was awesome. Great discussion. If anyone wants a double dose of Tackle today, we’re doing an office hours next at 1:00 PM about selling on marketplace. So just more questions if you have it on sale, so you’re welcome to join that as well. But this was awesome. We’ll be sharing the recording afterwards and just appreciate everyone’s time and please reach out to Tackle if you have any questions or want more information on anything we covered or missed.

Brian Bell:

Thanks everyone.

Paul Defeo:

Thank you everyone. Have a great day.

Nicole Smith:

[crosstalk 00:55:47]Rest of your day.

Paul Defeo:

Bye[crosstalk 00:55:49]

Nicole Smith:

Bye.[crosstalk 00:55:48]