Why the Cloud Era Has Revolutionized How We Sell Software

The rapid migration of software to the cloud hasn’t only changed how software is developed and deployed. It’s also changed how software is bought and sold and created new opportunities to ease age-old friction points for both buyers and sellers. 

Enterprise software sales are projected to reach $505.7B this year. How will companies seize these opportunities as they build their 2021 go-to-market plans in this exciting cloud era? Tackle recently hosted a webinar to explore the ways cloud is disrupting B2B software sales and how to take full advantage of the revolution. Participants included: 

  • Don Addington, CRO of Tackle, which helps software sellers quickly and easily bring their products to Cloud Marketplaces and generate significant ongoing revenue
  • Elissa Livingston, Senior Vice President of Growth & Strategy for CloudCheckr, a cloud-management platform that gives cloud users and service providers the visibility and actionable insights needed to simplify cloud adoption and optimize cloud environments
  • Michael Pollack, CEO and co-founder of Intricately, which provides data-driven insights into prospects’ cloud spend and usage 

A Faster Path to Sales

The webinar began with Don discussing how software companies can benefit from the cloud’s emergence as a sales channel, add value for the cloud hyperscalers (AWS, Azure, GCP), and create convenience for customers. 

“Software companies are looking for a faster path to selling and accessing available budget dollars,” he said, noting that the goal is to provide a more convenient purchase experience where customers are set up to spend money as part of their commitments with the hyperscalers. 

“There are many new considerations for software companies to figure out with this channel,” he added. “There are partnership needs, technical requirements, defining your customer base and how to reach them, enabling purchases, and more.”

Quick Wins and KPIs

As an early entrant to the Marketplace, CloudCheckr’s usage has evolved from a “try-as-you-buy” platform to a more sophisticated selling tool, which prompted their partnership with Tackle. “As the Marketplace grew and expanded, it got increasingly complex for us to adapt and differentiate,” explained Elissa. “We needed to refine our sales process, materials, and our pricing structure to align with buyers. 

“We first realized the huge benefit of the Marketplace around Q4 2019,” she said. “We sold about 25% of our new contracts in that quarter through the Marketplace, which was a huge lift from prior quarters. The really interesting thing we saw was that they closed 40% faster than the direct contracts sourced in that time period by bypassing legal and procurement red tape.”

Even as pandemic-related precautions froze budgets and spending, CloudCheckr’s customers could leverage their existing cloud budgets to procure software via the Marketplace. “In April 2020, we sold 100% of our new customer contracts on the Marketplace,” said Elissa. “In fact, since then, we’ve transacted more new contracts via the Marketplace than direct, which is a huge shift from the year before.”

Don asked Elissa about other KPIs they considered for the Marketplace, especially compared to direct deals. “We started with revenue and quickly realized that wasn’t as important as other impacts we saw. Today, we look at how many deals we’re doing overall and how fast the Marketplace deals close, the impact on the sales cycle, and other factors like that,” she said. 

“Then you have deals sourced from the alliance provider themselves that end up going through the Marketplace,” she added. “On average, those close much faster and at a much higher win rate, in the mid-70s, and are more valuable in average selling price.”

A Symbiotic Relationship

Elissa classified the Marketplace as a symbiotic relationship with more of a “sell with” as opposed to “sell through” motion. “Like many other ISVs, CloudCheckr’s solution augments and improves the cloud infrastructure user’s experience. We literally wouldn’t exist without the cloud providers. Simultaneously, the cloud providers advocate for their customers’ use of our product, because of how it simplifies and accelerates cloud adoption,” she explained.

“Sellers on the cloud provider side and our sales team have very similar objectives. The partnership with our cloud provider counterparts is built into our sales cycle, prioritizing opportunities they bring us and learning about their programs to align our own sales programs.” 

“That intersection of partnering with the cloud providers and understanding what moves the needle for them is a big part of this sales revolution,” said Don. “The providers want to see consumption grow and they want to deliver more valuable things to their customers to improve retention and increase spending. As a software provider, you need to know how to position yourself to benefit the cloud provider beyond just their sales reps getting paid. The more you can focus on—and capitalize on—those benefits, the more providers will want to partner with you.” 

Knowing Your Audience

Don broached the topic of the Marketplaces’ dual function as a top of funnel sales storefront and fulfillment channel. Then Elissa underscored the importance of data at the top of the funnel. “We partnered with Intricately last fall and almost immediately realized a big gap in our sales and marketing alignment,” she explained. “We were doing a lot of the right things in marketing but directing them to mostly the wrong audience.” 

With apparently similar clients, Elissa tried to distinguish those just getting started in their cloud journey from those farther along and more likely to benefit from CloudCheckr. “That change at the top of our funnel completely shifted the value of the prospects we were marketing to, and ultimately selling into as well.”

Cloud providers can also provide vital intelligence regarding the “decision-makers and those who write the checks,” said Don, highlighting the value of getting the right data to the appropriate people at the correct time. 

Software sellers and cloud providers alike struggle to prioritize their prospecting. “It’s generally harder to come by data that helps you understand a business’s digital maturity or how hybridized their infrastructure is,” Michael said.“Our customers use this information to better understand their market and help ensure they’re spending on the best opportunities.”

Taking the First Steps

“For companies considering entering a Marketplace,” Mike asked, “how should they think about constructing their approach? What’s the recipe to determine if it’s a good fit?”

Mike also addressed the questions that intimidate sellers at the start of the process regarding which Marketplaces to join and where to devote marketing resources and alliance dollars. Elissa discussed how CloudCheckr used Intricately’s data to focus on the most likely prospects from the world of cloud-based on need, maturity, budget, and other factors. “We have the data to show that we can accelerate revenue generation based on where we make investments.” 

“Wherever you build your software is a natural place for a partnership,” said Don. “Because anytime you’re winning, the cloud provider’s winning.”

Of course, you also need to make decisions based on where your customers are and where they spend their money. “Customers are more likely to purchase from the marketplace of their primary cloud infrastructure provider,” said Elissa. She also recommended that those with a new or unique solution seek out a cloud provider partnership and use that differentiation to get ahead. 

In terms of selling, Don recommended initiating the conversation about the advantages of buying through the Marketplace with customers early on. “You can gain traction by letting them know others are finding it easier and faster to do transactions over the Marketplace, especially with a bill already in place.”  

Watch the complete webinar here

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