You need a game plan to list and transact on Cloud Marketplaces
There are many reasons why Independent Software Vendors (ISVs) want to sell through public Cloud Marketplaces like Amazon Web Services (AWS), Azure Marketplace, or Google’s Cloud Platform (GCP). The top one, in our experience, is because customers of these ISV’s are asking for it.A recent study by Gartner validates our experience, as they see the SaaS segment for Public Cloud revenue as the largest and fastest-growing segment of all public cloud spend.
A second reason that ISVs want to transact on public Marketplaces is that their customers are consolidating spend across vendor ecosystem in order to:
Simplify the procurement process for their employees (or simplify the way their employees buy and sell software) and
Increase buying power by consolidating spend across fewer vendors.
According to a November 2019 report by Deloitte, 1 in 3 Chief Procurement Officers say that vendor consolidation is the largest organizational initiative over the next year while 70% agreed that reducing cost was another important initiative,
A third reason that ISV’s want to transact on Cloud Marketplaces is the Cloud Marketplace providers are offering incentives to accelerate listings and promote transactions. All major Cloud Providers are in a race to acquire customer share and transaction volumes. Programs such as cloud infrastructure credits, sales compensation, tiered rewards, and customer commitment inclusion proliferate throughout the cloud ecosystem.
When you combine this shift in enterprise purchasing behavior with investments from each of the public Cloud Providers, you get a perfect combination of increasing demand and increasing supply for cloud transactions, culminating in accelerating growth in Marketplace adoption.
Consider these Marketplace trends as you establish your game plan for “cloud” and how to get there. Like all sports, planning and preparation are fundamental to a successful outcome. Before you begin, understand the entire scope and be clear on your objectives. This can be done in weeks (even days – ask us how!) instead of months, but preparation and alignment across a number of functional groups will help you go fast.
The Infinite, Not Finite, Game
From time-to-time, customers will approach us with the goal of listing their offer on a public Cloud Marketplace….and that’s it. The analogy is “the Marketplace listing is the finish line” for these customers.
In these situations, we probe deeper into the ISV’s plan for public Marketplaces to either ensure they are organizing around “cloud” as a new distribution channel or we coach or guide them to think this way. The end goal should always be “transacting” as the objective and not “listing”.
To summarize, the listing is more like the starting line or the beginning of any game, not the finish line or end of any game. But, in fact, the market is moving so swiftly that there really is no end to the game! Simon Sinek sums this up particularly well (as usual) in his new book “The Infinite Game”.
“In finite games, like football or chess, the players are known, the rules are fixed, and the endpoint is clear. The winners and losers are easily identified.
In infinite games, like business or politics or life itself, the players come and go, the rules are changeable, and there is no defined endpoint. There are no winners or losers in an infinite game; there is only ahead and behind.”
What’s the play?
First, let’s take a look at the type of activities required for publishing a listing on any public Marketplace:
Many activities require your scarce product development and engineering resources, such as the development and ongoing management of your listing, API development, workflow management, etc. But other activities are required that involve stakeholders such as legal, sales, marketing, and operations.
The primary play for listing and transacting on Cloud Marketplaces is understanding the scope of impact, the required players on the team and the role that each will play.
Who’s on the team?
Regardless of the sport you play, there is always a team that helps with preparation, training, support, and, in most cases, the actual sport of play. This holds true for listing and transacting in Cloud Marketplaces.
In our work listing over 150 ISV products on Cloud Marketplaces, we typically engage with a cross-functional team. In most cases, we engage directly with one or two people, who then serve as point-of-contact for the others. In other cases, we engage directly with all members of the ‘team’. In either case, these extended team members will play a role in the listing and transacting process. Here are a few examples to consider.
The legal team is required to evaluate options for transacting on Cloud Marketplaces. Each Cloud Provider has a number of different agreements, all of which should be reviewed by legal considering your business objectives. Examples of agreements are:
Partner agreement – need to partner up with the Cloud Marketplace provider
Publisher agreement – standard terms and conditions for participating and transacting in the Marketplace
EULA agreement – the ISV has an option to use the agreement provided by the Marketplace provider or use a custom agreement. Depending on the cloud, there are compromise options that combine the two.
Sales and Sales Operations
Listing on a Cloud Marketplace often requires the introduction of a new pricing tier or method for pricing. Depending on how you price and sell your software today, this exercise could yield a very different pricing structure or a nominal difference. Considerations also include:
How does the Marketplace compare to how you sell today? What will change when you open Cloud Marketplaces as a new distribution channel?
Will you list your offer publically or only engage in private transactions/offers/plans? Pro tip: all Cloud Providers either require or will require a public offer, so we encourage you to include a public-facing offer in your plan, even if you expect to transact mostly with Private Offers.
Will you price monthly, annually or pay-as-you-go? Does the Marketplace provider support your pricing dimensions?
What updates to workflow are required to support Marketplace transactions?
How will compensation change for this new channel?
Finance and Tax
You’ll need to define the bank account structures and tax status. Tax payments may be calculated by the Cloud Provider, depending on the country or state in which the end customer resides, but your team will be responsible for making tax payments in all other jurisdictions.
The Cloud Marketplace is a new distribution channel. Your end customer will be able to procure through this channel directly under terms they negotiated with the Cloud Provider. This greatly simplifies the procurement process, which helps you close your deal faster. How will your existing channel’s business be impacted?
Now you have this new channel available, how will it fit into your marketing plays? What changes will you make to drive interest and eyeballs to your offer? Where does the Cloud Marketplace channel fit into your overall marketing and GTM strategy? You’ll also want to create a dedicated page to drive traffic to your Marketplace offer.
Who’s your coach?
Valuable resources can be found in the trove of documents created and maintained by each Cloud Marketplace provider.
In summary, you can develop and maintain your Marketplace listing on your own, which may look something like this:
These represent a number of machine-to-machine integrations that your team will build and operate, along with workflow management to ensure orders, cancellations, modifications, renewals, etc. are handled in a timely way. Or you can work with Tackle, which will make your experience look more like this:
Tackle will coach and lead you through these steps, handling most of it for you. We help connect all the players involved and expedite the listing process through the Tackle Cloud Marketplace Platform. Our Smart Onboarding tool automates the integration and engineering behind the listing to save resources for our customers and ensure successful listing and maintenance. There’s no need to run drills constantly and exhaust the players—let Tackle share expertise and coach you to simplify your listing experience.