No matter how you slice it, an economic downturn poses some formidable challenges for any software company. When the economy hits a snag, prudent ISVs will tighten their belts and focus on driving efficiencies across the business.
The good news is that Cloud GTM offers a particularly effective way for companies to weather an economic rough patch, and better yet, opens new doors for future growth—especially through a solid strategy that leverages co-sell and the Cloud Marketplaces.
Co-sell and Cloud Marketplaces together can open a lot of doors and help drive revenue more efficiently. And that idea has taken on new urgency as efficient growth once again becomes the north star for ISVs . The upshot of this is that Cloud Providers are now doubling down on co-sell and Marketplace too, working on new programs, incentives, and ways to improve processes and add inherent value. Essentially, ISVs that build a Cloud GTM strategy as part of the fabric of how they do business will be better equipped to take advantage of the Cloud Provider ecosystem and weather economic storms as they (inevitably) arise.
During Tackle’s Cloud GTM XP event, Jessica Alexander, VP of Sales at CrowdStrike and Javier Molina, CRO at Starburst Data, shared their views and experiences with leveraging Cloud GTM to clear economic hurdles and discover new opportunities. Here are a few of their suggestions to help ISVs do the same.
The big picture: Co-sell + Marketplace should be in the ISV’s DNA
If there’s one clear refrain when it comes to Cloud GTM, it’s this: You can’t treat it as a one-off experiment. As Tackle’s State of Cloud Marketplace Report showed, the most successful ISVs make Cloud GTM an integral part of their business, not a bolt-on motion.
Building Cloud GTM into the organization’s structure is exactly what has helped CrowdStrike become successful. “Our cloud business has been mainstreamed into our alliance’s organization, and it’s just a core part of the DNA of our go-to-market,” said Jessica.
She notes that ISVs looking to make the most of Cloud GTM should look at it holistically when building out a strategy that will underpin the organization. “Co-sell and Marketplace are very much interconnected,” Jessica said. “But the third pillar is integration with the cloud service providers, because that makes a customer’s experience really nicely integrated into the cloud fabric — and I think that now co-sell, Marketplace, and service integration has gotten to a point of really enabling ISVs to be intentional, strategic, and more oriented around what outcomes they want and when designing the GTM around those outcomes.”
The crucial roles of enablement, data, and compensation
Organizations that have the most success with Cloud GTM (whether in good times or bad) have ensured that their sales teams are properly equipped to talk about and understand the benefits of co-selling, Marketplace, and Cloud GTM. “Nowadays, customers are educating themselves through documentation, videos, and webinars. 60% to 75% of the sales cycle’s already done by the time they get to us,” said Javier.
Keeping this new reality in mind is key for companies building a Cloud GTM that will operate smoothly, whether through good times or bad. “It was vital for us to be able to have a Marketplace strategy, but also to think about how we start to embed it into our sales strategy and into our sales motion,” said Javier. “This goes for everything from adoption, to providing the appropriate resources, to reiterating the Marketplace benefits to the sales organization. So for us, the early part of the journey was how we start to use the Marketplace to meet customers where they are, and how they’re used to procuring software, and then also driving adoption with the field.”
For example, Starburst implements Cloud GTM into its new-hire process in a program called Advance Sales Training, which happens 90 to 120 days after someone’s hired. They also highlight Marketplace and co-sell successes in all-hands calls, which includes their alliances and partner team talking about how the partner ecosystem and the transaction through Marketplace accelerated a deal or helped Starburst obtain funding. “We’re continually figuring out ways to keep co-selling and Marketplace top of mind,” said Javier. “It’s not a ‘one and done’ thing.”
Leveraging data and knowing who to sell to and with is also a critical component of the Cloud GTM equation, perhaps even more so during an economic downturn. Armed with data, an ISV can more efficiently focus its selling efforts in the right place and drive adoption from the sales team. “It’s really a conversation of, where are our customers? Where are they buying?” said Jessica.
“For us, it was about enablement and scale while teaching or enabling our sellers how to align with AWS, or GCP, or even a cloud persona,” said Jessica. “We’re traditionally selling to the CISO or the SOC director. And our goal is to capture new buying personas with the cloud service providers who are primarily DevOps. So we really measured our adoption from a seller perspective—how many new sellers were we onboarding every week that were doing a transaction through the Marketplaces? So it gave us metrics around where we needed to invest, where were we seeing adoption with the cloud service provider, and where were we launching deals—what regions were they in? Where were we seeing the fastest growth rates?”
Incentivizing Marketplace deals in the beginning can go a long way toward generating additional revenue when it matters most.
Javier also notes that it’s important to address the elephant in the room: compensation. Naturally, your sales team will want to know how they get paid. Tackle’s State of Cloud Marketplaces Report found that a “comp neutral” model–in which Marketplace deals are treated no different than any other–is the best policy. After all, especially during times of economic stress, it wouldn’t make sense to penalize a particular type of deal. In fact, incentivizing Marketplace deals in the beginning can go a long way toward generating additional revenue when it matters most.
“Your comp structure certainly has to match the motion and the incentives that you want to drive,” said Javier. “The way that we typically build comp models is we don’t start with the plan itself. We start with the behaviors that we want to drive. And so we’ll sit down with the rev ops team and the finance team, and just say, ‘What do we want to drive? We want to drive new logos, but we also want to incentivize quality new logos. We want to incentivize selling, training, and services. We want to X, Y, Z.”
“It’s important to identify where you are in your Cloud GTM journey, and what you’re after, whether it’s deal speed or lower customer acquisition costs,” said Jessica. “Ask ‘What are our bigger outcomes that we want?’ And then design the comp plan so that they’re not a penalty, but more of an incentive. It’s the carrot and the stick approach: What behaviors do you want to encourage?”
Developing relationships with the Cloud Providers and building momentum
During those particularly bumpy economic times, it can be beneficial to have an existing co-sell motion with a Cloud Provider. That’s not to say that the Cloud Provider relationship and co-sell are an ISV’s lifeline during a downturn, but co-sell can, at the very least, prop open the door for new opportunities that may not otherwise exist. Combine that with the ease and speed of Marketplace transactions, and you’ve got a viable, efficient revenue pipeline.
“For us, there’s co-sell and Marketplace,” said Javier. “For our PDMs, it’s about really getting customers to think about how we develop relationships that combine our products and the Cloud Provider’s products, and then looking for ways for our co-sell to really start to drive executive relationships. It’s about thinking broad and wide across the Marketplace partners that we have to really unlock various initiatives, relationships, and go-to-market programs that we can align around.”
Aligning the ISV’s product closely with the Cloud Provider’s—and building a “Better Together” story around that integration—is a cornerstone of Cloud GTM. Further, closely aligning product and messaging with a Cloud Provider communicates strength and stability to potential customers, which can be just what’s needed to tip a deal in your favor during a downturn. “If customers are using a cloud service and there’s a complementary offering from CrowdStrike, that makes the service more secure and reduces risk,” said Jessica. “I call it the ‘cloud wrapper.’ It’s taking a product that we have and sending it through a cloud wrapper, which is to make sure that it’s well integrated into Marketplace, that it is leveraging the programs and even the language and wording that a cloud persona would be comfortable with.”
“I think a lot of times where sometimes ISVs go wrong when they approach a potential cloud partner or technology partner thinking about how it helps them, rather than putting that in reverse and thinking, ‘What is the benefit that I would provide to the partner? How can I ultimately help them with our business?” said Javier.
Engineering the friction out of a modern Cloud go-to-market motion
For both CrowdStrike and Starburst, Cloud GTM is the answer to meeting customers where they want to buy, in the ways they want to buy—and going all-in on Cloud GTM, especially during a down economy, just makes sense. “We’re not selling software—we’re helping buyers buy software,” said Javier. “I think that’s a really important delineation because when we think about how we educate and enable our customers to understand not only our technology, but the value of our technology and what our competitors are doing, you’re helping them make a buyer’s decision.”
“I think the challenges for the larger ISVs is how do they retrofit their go-to-market to accommodate this new opportunity,” said Jessica. “There are varying levels of proficiency in enabling channel partners, or distributors, or other more old-school software distribution mechanisms. How do we retrofit those to accommodate a new path to market?”
Jessica points out that one of the strategies to help companies navigate this new paradigm for buying and selling software is to “engineer the friction” out of the process. “Something that we focused on at the beginning was, if there is a manual process, how do we automate it?” she said. “And I think that’s the cool thing about a cloud service provider go-to-market, whether it’s a partner portal or the Marketplace, is how do we engineer all the friction out of that? Maybe it starts out as a human process, but then in order to scale it, you really need to engineer the friction out of it, because one of the most difficult pieces of GTM is to plan for how and where to invest in headcount. The benefit of Tackle is their ability to say, ‘We’ve got the operational piece, so you can invest in a specific go-to-market skillset, or we’ve got the go-to-market, you can invest your resources here.’”
“It’s about lowering that friction for your customers and how you use Marketplace to do that,” said Javier. “It’s all about trying to be as efficient as possible.”