Startup Essentials: Making the Most of AWS Marketplace

Learn how two startups leveraged AWS Marketplace to boost sales and gain a competitive edge

Today’s software buyers have made one thing abundantly clear: They want to purchase through Cloud Marketplaces. In fact, Tackle’s 2021 State of Cloud Marketplaces Report indicates that 83% of software buyers are likely or extremely likely to purchase through the Marketplace in the future. That means that it’s a good idea for any early-stage software startup to make the Marketplace a key element of its go-to-market strategy.

But what does it mean for a startup to begin listing on the Marketplace as part of a Cloud GTM strategy, and what does that look like? How can a VC-backed startup best partner with AWS Marketplace to boost the chances for success?

In a recent Tackle webinar, Meaghan Casey, AWS’ Global Startup Partner Manager; Barbara Murphy, WEKA’s VP of Cloud Strategy; and Chee Tan, Tugboat Logic’s VP of Business Development and Channels discussed the unique experience and benefits that startups have when partnering with AWS Marketplace.

Key benefits for startups to list on the AWS Marketplace

Software startups face a number of unique hurdles right out of the gate: Lack of funding, lack of presence in the market, and difficulty connecting with potential customers, among others. Closing deals quickly and efficiently can be especially difficult for startups, with lengthy sales cycles to overcome. 

First, listing on AWS Marketplace enables access to a deep well of potential customers. “We are the only one in our space participating in AWS Marketplace,” said Chee. “It opens up doors, not only to the 310,000 customers that AWS has, but also to the 1,200-plus resellers who are transacting in the AWS Marketplace.”

“AWS Marketplace opens up doors, not only to the 310,000 customers that AWS has, but also to the 1,200-plus resellers who are transacting in the AWS Marketplace.” – Chee Tan, Tugboat Logic

Chee also found potential customers were expressing a preference for making software purchases through Cloud Marketplaces. “It really makes a huge difference when our sales team is presenting to the prospect and they say, ‘Hey, we have this AWS Marketplace purchasing option. We can skip all those complex sales processes and get things done.”

Read more: Tackle’s AWS Seller’s Guide: People and Programs

Tackle’s 2021 State of Cloud Marketplaces Report indicates that one of the key factors attracting buyers to Cloud Marketplaces is the ability to leverage cloud budgets to make software purchases. Buyers want to make purchases in places where they already run their business–the clouds. “Whenever we have customers coming to us who find out that they can actually utilize their cloud spend, it actually shortens the sales cycle,” said Chee. 

And efficiently ushering customers through the sales process can grant a startup a clear advantage over the competition. 

“With a few clicks, customers can actually subscribe to our solution without any interaction or hassle in terms of dealing with phone calls and meetings,” said Chee. “If they know what they want, they can immediately make that decision. The faster you can get that sales cycle through, the faster you can get that revenue coming in. I think that’s really important at those early stages for a startup.”

“The faster you can get that sales cycle through, the faster you can get that revenue coming in. I think that’s really important at those early stages for a startup.”–Chee Tan, Tugboat Logic

For VC-backed startups, cloud software sales through the Marketplace can provide a critical investment boost. Highlighting a Cloud Marketplace commitment to investors during a seed Series A funding round, for example, can be a springboard to the next round of funding. 

“[Focusing on Cloud Marketplace] has given us a huge boost in our business in the last 12 months, and also in our valuation,” said WEKA’s Barbara Murphy. “When we’re talking to investors, the fact that we are seeing 400% and 500% year-over-year growth in our cloud business, that has a huge impact on how they view our company.”  

“It wasn’t until we aligned our go-to-market with the AWS Marketplace that we started to see any success as a cloud vendor,” she said. “I’m proud to say that we’ve seen humongous growth in the last 12 months.”

The next level: Optimizing through AWS Marketplace programs     

AWS Marketplace offers a host of programs and services specifically designed to help startups build visibility and revenue. These programs make it easier for emerging software companies to transact through the Marketplace.

Read more: 4 Key Focus Areas for SaaS Startups on Cloud Marketplaces

“We accelerate VC-backed startups to move much faster in their partner journey with AWS,” said AWS’ Meaghan Casey. “We want our startups to give customers choices about how they want to buy, and allow customers to choose what makes sense for them.” 

Basically, AWS’ partner programs are all centered around helping ISVs in these three areas:

  • Technical enablement: Ensuring that the ISV’s technology is reliable, validated, well-architected to AWS’s standards, and roadmapped to incorporate AWS services. In turn, buyers know they can trust ISVs who have been vetted by AWS, which incentivises purchases.
  • Go-to-market: Co-branding, joint webinars, blog articles, and awareness campaigns in conjunction with AWS to develop top-of-funnel leads.
  • Sales enablement: Connecting startup sales teams with AWS sales teams to help close deals more quickly through AWS Marketplace. 

The “go-to-market” pillar is especially critical. Listing on the AWS Marketplace isn’t simply “set it and forget it.” 

“There are quite a number of marketing options on AWS where you can basically broadcast, promote, and advertise your presence,” said Chee. “Because once you set it up, that’s only the beginning of the long journey ahead of you where you have to create awareness. AWS provides those options for us.”

“When we’re talking to investors and the fact that we are seeing 400% and 500% year-over-year growth in our cloud business, that has a huge impact.” –Barbara Murphy, WEKA

AWS also has a co-selling program called ISV Accelerate. ISV Accelerate includes shared marketing, branding, and sales opportunities with AWS. It also includes reduced listing fees in the AWS Marketplace, as well as the AWS Data Exchange.

Read more: Making the Most of the AWS ISV Accelerate Program 

Earlier this year, AWS Marketplace rolled out a new ISV program called AWS Partner Paths. It’s a purpose-built, more flexible guided path to help sellers get up and running through their partnership with AWS, and is a good option for startups looking to quickly build a deeper engagement with AWS Marketplace. 

In addition, AWS offers plenty of credits on setup fees and other costs, depending upon your level of engagement. 

Kickstarting the AWS Marketplace flywheel

Ultimately, ISVs and AWS share the same goal: to generate frictionless software sales.

“The AWS sales team wants to be able to provide air cover, especially if you are educating that customer about the benefits of the Marketplace and what the process will be like,” said Meaghan. “So the AWS sales team will be keen and eager to work with your startup sales team. There’s a lot of alignment around closing a deal through the AWS Marketplace.” 

One critical piece of advice from both WEKA and AWS: It can be massively beneficial to register software deals through AWS Marketplace. “This means you have a use case identified, and you’re talking with a customer about a deal,” said Meaghan. “[By registering, you’re saying] ‘here is a possibility on the table that a deal can be moved forward’, and you want your sales team to be connected with the AWS sales team.”

For WEKA, registering deals with AWS was a game changer. “Once we started tracking every deal, now we have a whole ecosystem of co-selling partners inside of AWS who have relationships directly with our sales teams,” said Barbara. “That’s been huge in terms of accelerating our go-to-market and strengthening our relationship with the AWS sales team.”

“We have a whole ecosystem of co-selling partners inside of AWS who have relationships directly with our sales teams.” –Barbara Murphy, WEKA

Registering deals through AWS (via the AWS Customer Engagement portal, or ACE, portal) can have a huge impact. Properly recording these deals can trigger incentives (such as through the ISV Accelerate program) and additional sales support from AWS, which can help your sales team clarify messaging around Marketplace transactions, build use cases, identify key decision makers, navigate personas, and help remove any potential speed bumps when closing a deal.  

“There’s a lot of options available to help you get that deal across the finish line,” said Meaghan. “We stand by ready to help and support, but it’s really important that startup partners ask for the help so we can make sure that the customer gets the benefit and can start using your technology as soon as possible.” 

Measuring success in the Marketplace

Startups live and die by metrics – investors, executives, and others want to see the numbers, and showing sustained growth in key areas is crucial for startups. 

Read more: The Complete Playbook to Cloud Marketplaces 

A key metric is the length of the sales cycle. Naturally, more deals in a shorter amount of time means increased growth. Because transactions on the AWS Marketplace can simplify the procurement process, it’s possible to close deals (even significant ones) on a compressed timeline, and tracking that rapid sales motion can yield impressive metrics that appeal to investors.

“There’s a lot of options available to help you get that deal across the finish line.” –Meaghan Casey, AWS

Beyond tracking the sales cycle, there are also a number of other areas that are crucial. “As a startup, things like customer acquisition and the rate of growth of customer acquisition is critical to the overall view of the company and how we’re growing,” said Barbara. “We’re also now tracking the number of opportunities that are coming to WEKA as leads from AWS. We’ve seen tremendous growth, 10X growth year over year on that front. That’s been huge for us.”

Additional Marketplace metrics can also help startups (and investors) gain some real insight into company growth. “We talk constantly about ACV, which is annual contract value, that’s a key piece of what WEKA’s valuation is dependent on,” said Barbara. “And then on top of that is the customer retention rate as well as customer expansion. So those metrics are critical to our cloud business, and those are the ones that we’re measuring right now.”

Some advice for building Marketplace momentum

For any startup, it makes sense to set priorities and allocate resources wisely. A startup’s engineering team often has its nose to the proverbial grindstone working to develop software and go-to-market systems, so it can be challenging to build and maintain the technical aspects of Marketplace listings on top of that. “Tackle is a wonderful partner to be with in this journey,” said Chee. “We took advantage of Tackle’s resources and we were able to complete our listings in AWS Marketplace without distracting our engineering resources. Do you want your internal engineering resources to be doing all the API work for the AWS Marketplace, or do you want to leave them alone to develop better products?”

Barbara also credits Tackle with helping WEKA better understand and leverage AWS Marketplace. “Using Tackle as our platform to be able to go to market with annual contracts dramatically helped us accelerate the conversations on the other side with customers. Also, the ability to be able to simplify the back-end process for our finance teams ( revenue-recognition and the invoicing) has been a welcome addition. When we got that right, that’s when we started to see the growth.”

Listing and selling on AWS Marketplace can have tremendous benefits, but it doesn’t have to be daunting. There’s nothing wrong with asking for help and leaning on others’ expertise. “For us, it was so important to be tightly connected with both AWS and Tackle – that made it a very easy and smooth transition,” said Barbara.

To help accelerate your growth in the Cloud Marketplaces, apply now for our Startup Acceleration Program.