B2B software purchases are increasingly complex and loaded with clunky, manual, time-consuming processes for both buyers and sellers. Despite ecommerce becoming the go-to in our consumer purchases, and even as the software industry prioritizes massive migration to the cloud and investment in digital transformation, selling and buying enterprise software hasn’t caught up.
At Tackle, we are building for a future where the selling and buying experience for enterprise software exceeds consumer-level expectations, and the dawning of that evolution is happening in the Cloud Marketplaces.
Buyers expect consumer-grade buying experiences, but today’s inefficient and complex software purchasing process doesn’t cut it. Jay McBain said it well in a recent article: “The delta between B2C buyers and B2B buyers has collapsed during the pandemic. It’s all about speed, convenience, and remote, whether the buyer is acquiring a Peloton or a software product.”
At the same time, cloud spend has grown exponentially as companies migrate en masse to the cloud, influenced in no small part by the pandemic and the shift to remote work. Software companies are primed to take advantage of this shift—allowing buyers to bypass lengthy sourcing, procurement, and vendor management measures—by taking the logical next step into Cloud Marketplaces. Each hyperscaler—AWS, Azure, and Google Cloud—has one and they represent enormous potential for software sellers to meet buyer expectations.
In fact, buyers are already purchasing through Marketplace, and they prefer it. In our inauguralState of Cloud Marketplaces Report, 43% of buyers said they have purchased software through Marketplaces in the last year, and 74% say they are likely to make future software purchases this way. With buyer preferences and their wallets already in the cloud, the race is on for sellers to sell the way buyers want to buy.
We are constantly gathering feedback on ways to make the Marketplace experience even better. Last year we tripled our ARR, doubled our customer base, and saw over $200 million in software purchases flow through our platform with an explosion in the number of sellers and buyers embracing and succeeding with Cloud Marketplaces. We have heard the signals from our customers, from the Cloud Providers, from partners, and even from buyers: All B2B software sales are moving online and ushering in the era of digital selling.
Based on the growth curve we’ve already seen from early Marketplace sellers—like Auth0, CloudCheckr, CrowdStrike, Druva, Fivetran, Lacework, Okta, Sisense, Snowflake, and many more—we believe that revenue flow will increase by 10x in the near future because software sellers and buyers are ready to embrace this change. What they need now are ways to harmonize Marketplace into their current workflows and streamline a digital selling motion.
The Friction in Digital Selling Today
Despite the fact that at least a third of the top cloud companies are already leveraging Cloud Marketplaces, it doesn’t come without its challenges. Cloud Marketplaces have come a long way, but sellers often find integrating with these Marketplaces is a complex and duplicative process. Companies struggle to prioritize the build-out and maintenance of Marketplace integrations, align their business model to Marketplace selling, and provide the tools necessary for all key stakeholders to fully enable this motion.
Tackle has solved the building and maintenance problem already with a no-code interface that makes getting started on multiple Marketplaces at once a breeze. Software companies shouldn’t have to build software in order to sell software. By eliminating the need for your engineering team—a software company’s most valuable resource—to build or maintain a Marketplace integration, the conversation shifts and makes Marketplace a strategic business decision.
Establishing a successful Marketplace business, however, creates a need to align Marketplace sales to your existing sales operations process. That complexity is harder to solve for three primary reasons:
All software companies have numerous seller workflows—free trials, website purchases, SDR/Inside sales, account executives, enterprise sellers, channel, and Marketplaces.
Most companies have a sales tech stack that drives these workflows—marketing automation, CRM, quoting and configuration, subscription management, billing, provisioning, and in bigger companies, some sort of ERP solution.
The key steps in each of these sales flows may have some consistency, but much of the seller-buyer engagement is very bespoke with lots of people—from sales, product, alliances, finance, operations, legal—and handoffs that create friction.
Here’s an example of a typical seller’s workflow when selling through the Marketplaces:
At every stage, there is a high risk of friction.
Like building any successful channel, building a Marketplace business requires both commitment and a solution as flexible and dynamic as the enterprise sales process itself. Today, these workflows, systems, and handoffs lack the dynamic engagement that truly accounts for a digital selling world.
Redefining the Way Software Companies Sell Software
When we look forward to the future, we’re driven by the possibility of solving these problems and making digital selling convenient and attractive for both buyers and sellers. There is still plenty of ground to cover. Here’s how Tackle’s product will innovate this year to make it increasingly simpler and more impactful:
Help sellers sell
We have seen successful sellers grow their Marketplace business rapidly over the last four years and our desire is to continue to embed enabling capabilities into our platform to accelerate our sellers’ Marketplace growth. We have identified a few key areas of innovation that will bring clarity to a seller’s path to Marketplace success.
1.1. Identify existing opportunities that can be accelerated via the Cloud Marketplaces
This requires a deeper integration with your opportunity funnel which we will start solving by building a Marketplace-aware integration with Salesforce, providing enriched opportunity scoring and a simple workflow all sellers understand.
1.2. Create new business models powered by your Cloud Marketplace value proposition
We see this happening as part of an evolution of product packaging in the Cloud Marketplaces. Many of our customers start with how they are selling today and innovate over time as they gain experience with Marketplace selling. Oftentimes these new packages are born out of consumption-based business models, so we will continue to invest in our Easy Metering solution to unlock stress-free, consumption-based business models via Marketplaces for all sellers.
1.3. Make Marketplaces a more native part of the buyer experience
Think about your typical SaaS pricing page. “Choose a basic plan,” “Start a free trial,” or “Call us for enterprise pricing” — these are likely the three options you’ll see. Pricing pages like these are often the start of a long, friction-filled purchasing process.
Tackle aims to bring Marketplaces closer to this point of initial purchase, as well as powering expansions and large deal execution. This is a new investment area we are really excited about that will make Marketplace a seamless part of where the buyer journey starts for any software company. Envision a “buy now with cloud” button during your buyer onboarding process to initiate a Marketplace transaction.
We envision a future where all sellers look at Marketplaces as a turbocharger for their business and not something that creates risk, adds complexity, or confuses buyers.
Simplify finance and sales operations for Cloud Marketplace-powered businesses
Similar to how Marketplaces are a new concept for most salespeople, they are new to finance and operations too. This has been an area of fast-paced customer-driven innovation for Tackle over the last four years and we will accelerate our investment in making Marketplace the best way to do business for finance and operations.
For example, our Marketplace Insights solution provides our customers with deeper visibility into their Cloud Marketplace revenue and distributions. Our Private Offer Acceleration is another key area of innovation for Tackle as private offers are the primary way large sellers choose to advance Marketplace deals.
We have dedicated teams to innovate on these product areas, and we continue to gather feedback from sellers who have encountered massive complications when trying to solve these use cases themselves.
Maximize buyer and seller experience, minimize developer backlog
We want any engineering work that software companies do to enable digital selling to truly differentiate their buyer and seller experience. Our goal is to become the default toolkit to build with, enabling off-the-shelf tools that minimize or eliminate work for developers.
As this space explodes, there will be more and more solutions to integrate with and scenarios to solve. We will provide more tools for developers and product leaders to build with Tackle, contribute to a community-based approach to digital selling, and ultimately accelerate innovation for all those building software. We look at pioneers like Stripe and Twilio, who lead incredible developer-focused initiatives for their industries, and seek to bring similar approaches to digital selling.
The Future of Software Sales Has Arrived
This is our vision for the future. This is why we raised our Series B and why we could not be more excited to partner with a16z and Bessemer to bring this future to life.
We’re thrilled for the journey ahead and we’re so thankful to our partners, as well as to the entire Tackle community of sellers who have made this possible. This funding will allow us to continue to innovate and improve the core features our users know and love while also working towards our vision of changing the way enterprise software is bought and sold.