Emerging Trends in Software Sales
“If we can find a mechanism where buyers and sellers can complete those transactions and can find each other so much faster, it totally changes the world of buying software”
Andy Jassy – CEO, Amazon Web Services
Raise your hand if your impression of AWS’s Cloud Marketplace (or any Cloud Marketplace for that matter) is that it’s a place for software companies to park advertisements for their products. Raise your hand again if you think the Marketplace is somewhere you can pay an hourly fee to use some software tools that your Developers like to play with. Assuming your hand is in the air, the next few statements will surprise you:
- 200,000 Purchasers buy software via the AWSMP…every month. While the numbers aren’t published publicly, the percentage of enterprises (as opposed to individuals) purchasing each month is growing rapidly.
- 1,400+ ISVs have listings on the AWSMP, representing over 4,500 products – That’s a LOT of inventory.
- Again, while not publicly released, the number of 6, 7 and 8-figure deals transacted last year on the AWSMP would make any VP of Sales or CRO salivate.
If you weren’t aware of most of those data points, don’t feel bad – up until very recently, I wasn’t either. The speed with which Cloud Marketplaces are gaining ground is astounding, especially to someone like me, who’s spent their entire career in the software business.
I’ve taken a somewhat non-traditional path in my software career. I’ve moved around within the software industry, where many are more prone to specializing in a specific area. As a result, I had a front row seat as the Information Security space exploded. I met with CIO’s trying to get their arms around Cloud services consumption because their teams were all of the sudden consuming software in a whole new way (Shadow IT, anyone?). And I was fortunate enough to help some very large companies embrace organizational change to maximize the benefit of aligning IT and Business stakeholders. Some people (ok, almost everyone these days) call that Digital Transformation. Each experience offered me a front row seat to a major industry shift – so I guess it’s appropriate I’m continuing that theme….
My new gig? At Tackle.io, I’m fortunate enough to be at the very forefront of helping software companies (ISVs) and partners transform the way they sell their products and solutions.Together with the larger Tackle team, I’m helping our customers sell software, FAST. We do this by helping ISVs navigate what is still a new (and many times confusing) GTM strategy: Selling through Cloud Marketplaces. And it’s been a wild ride so far. I’ve been amazed to see just how many ISVs are waking up to this concept of Cloud Marketplace selling. But what does that mean? Why is it working?
Think about it this way. Enterprises (large and small) are shifting towards new software consumption patterns. Few successful organizations today have not adopted a SaaS-first strategy when they consider how they want to consume the technology that powers their orgs. Why build it yourself, or run it yourself, if it doesn’t contribute to differentiating your company? Additionally, the relentless focus on customer acquisition and retention has caused enterprises to trim the fat wherever they can – to stop recreating wheels, to start becoming consumers of technology that represents undifferentiated heavy lifting, so they can focus on their own products.
Consider this: According to a 2017 survey conducted by Bettercloud, 73% of organizations say nearly all (80%+) of their apps will be SaaS by 2020.
In related news, most software vendors are focusing on building SaaS-based offerings. The operational overhead of running your own data center makes sense for only the rare few. Enterprises’ appetites have shifted towards consumption-based, subscription-type software agreements. Users expect products to be significantly updated on a routine basis. All of these things point towards Cloud-based software as THE preferred consumption, deployment, development, and operational model.
So enterprises want to shift spend to the cloud and providers want to shift their deployment models to the cloud (or at least deliver their on-prem software via the cloud), right? Then why are you (the ISV) not selling your software via these clouds? That’s where all the money is going.
As a result of these behavioral shifts, AWS is taking advantage of ecosystem selling. What does that mean? When AWS can provide the inventory buyers’ want and the customer’s sellers’ want and everything being bought and sold runs on their infrastructure…everyone wins. To ensure they are fostering the right environment, AWS has invested heavily in roles such as ISV Success Managers (500% growth in headcount this year alone), designed to help connect ISVs and customers to help meet the needs of both. The cherry on top of all of this comes when all those transactions also flow through AWSMP.
Everyone wins – The customer, the ISV, and AWS.
The incentive structures and support that exist to help these ecosystem sales motions thrive, are growing daily. Marketing and Co-Selling opportunities are more readily available than ever before. AWS-led GTM campaigns are underway. Support is available to help identify MQLs and SQLs (Marketing and Sales-Qualified Leads) that are generated by the Marketplace. AWS has developed a baseline Cloud EULA for ISVs to use to limit contract negotiations.
See Chris Grusz and Brad Lyman of AWS outline the variety of programs available to ISVs selling via the Marketplace: http://bit.ly/2TUMemw
Amazing opportunities to help you sell abound…but navigating all of this change successfully requires a Guide – that’s where Tackle comes in.
From helping you get your products listed fast (in days, not months), to optimizing your pricing strategy to align with the nuances of how the Marketplace operates, to helping your sales teams understand how to leverage the Marketplace ecosystem for optimal lift, Tackle is THE partner you can rely on. We’ve built software to help manage the lifecycle of ISV’s Marketplace listings. We’ve also built software to help ensure ISVs can get the granular reporting their Finance and Operations teams must have in order to operate in this new Cloud Marketplace economy. In short, if you’re an ISV or partner looking to leverage this new channel to drive significant revenue, Tackle has built software and processes so you don’t have to.
It’s been a ton of work, but also a ton of fun being at the forefront of another big shift in our industry, but the team at Tackle is just getting started. We’ve got an ambitious goal of helping transform the way software companies sell – that’s what disrupted my path and brought me to Tackle. And we’re anxious to bring that disruption to ISVs of all shapes and sizes. If you’d like us to help your company the way we have with dozens already, just reach out to hello@tackle.io and let us know. We’d love to be your Guide!
