Selling software isn’t easy. It can be particularly grueling for an ISV to try to break into the market and capture the attention of buyers. However, Cloud Marketplaces have changed the rules of the game: Cloud Marketplaces have evolved from transaction vehicles to become a leading revenue channel for companies of all sizes and industries.
Making Cloud Marketplaces an integral part of the go-to-market strategy requires some careful planning and forethought. Like any team sport, it’s critical to have the right players on board and focused on the goal.
Get your players moving in the same direction
It may sound basic, but the first step toward aligning your team toward Marketplace success is making sure everyone understands why the Marketplace matters, and why it’s important to transact there.
For starters, here are the basics of why Cloud Marketplaces like AWS Marketplace, Google Cloud Marketplace, Microsoft commercial marketplace, or Red Hat Marketplace matter for ISVs:
Forty-eight percent of buyers list drawing down on committed spend with Cloud Providers as the top reason they use Cloud Marketplaces, according to Tackle’s State of Cloud Marketplaces 2022 report. Buyers are looking to take advantage of volume-based discounts offered by the Cloud Providers as they consolidate their spend into a single cloud bill in order to:
Simplify the procurement process through easier legal and finance.
Increase buying power by consolidating spend across fewer vendors.
Another reason that ISVs want to transact on Cloud Marketplaces is to expedite first deals. Selling software has traditionally been a painful process, involving legal, security, finance, and vendor management departments, among others. That translates to a long, laborious process.
However, the journey for both buyers and sellers can be accelerated considerably through Cloud Marketplaces for those buyers who already have a relationship with a Cloud Provider. In fact, 43% of those surveyed in our State of Cloud Marketplaces 2022 report indicated “accelerate time to value” as the top buyer benefit on Cloud Marketplaces. Understanding this fundamental shift in how software is bought and sold is the first step toward creating a game plan that quickly gets your product on the Cloud Marketplace.
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) instead of months, but preparation and alignment across a number of functional groups will help you get there more quickly.
Playing the infinite game
Some companies view listing their offer on a Cloud Marketplace as the end goal. The analogy is “the Marketplace listing is the finish line” for these companies.
Although getting listed is a vital step, it’s not the ultimate goal. Organizing around “the cloud” as a distribution channel is a more effective approach, and the end goal should always be about leveraging the Cloud Provider and Marketplace to drive revenue, and not just “listing.” In short, the listing is more like the starting line or the beginning of the game, not the finish line. In fact, the market is moving so swiftly that there really is no end to the game.
With that in mind, it’s never too early to consider the steps to come after you’re listed. These include strategies to help you scale your business — most notably through co-selling. The Cloud Marketplace Playbook can help you consider the bigger picture of scaling and operationalizing your Cloud Marketplace listing.
When selling on Cloud Marketplaces, you’ll typically engage with a cross-functional team. In most cases, you’ll engage directly with one or two people, who then serve as point-of-contact for the others. In other instances, you’ll engage directly with all members of the “team.” In either case, these extended team members will play a role in the listing and selling process. Keep in mind that not all of these stakeholders need to be actively involved with getting your product listed right at the outset. Some of these team members may be more engaged as your Cloud Marketplace business gains momentum. Regardless, it’s a good practice to at least loop in the right people from the beginning, then lean on their expertise more heavily as needed.
Here are a few of the key stakeholders you may need on your Marketplace journey.
Legal 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 Provider, there may be 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.
Alliances 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?
Marketing Now that 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.
There are no guarantees for Marketplace success, but having the right players in the right roles significantly increases your chances. Once you’ve aligned your legal, sales, finance, alliances, and marketing professionals, you’ll be set-up for a Cloud Marketplace full-court press.
Looking for a little more help? Tackle can coach and lead you through these steps, connect all the players involved, and expedite the listing process while automating the integration and engineering behind the listing. Schedule a demo to learn more.