How the Cloud Era has Revolutionized How We Sell Software

Don Addington:

Erika, do you want to get us kicked off, or do we want to wait for another minute or two, let some folks trickle in?

Erika Childers:

I think we’re in good shape. I think we’re good to kind of kick it off. Hi, everyone, welcome to our webinar. We’re really excited to have everyone here. Hopefully you’re in the right place. We’re going to walk through a couple of introductions, Don’s going to take us away and kind of lead us through a little bit of discussion. And then we’ll turn off the slides, and we’ll spend some time just chatting with you guys about this topic. And feel free, obviously, to send in any questions that you have throughout the webinar, and you can also chat into us as we go. Take it away, Don.

Don Addington:

Awesome. Thank you, Erika. So thanks to everybody for joining us today. We’re going to go through, as Erika said, a quick round of intros and then we’ll dive into a little bit of backdrop on the session here and talking about really kind of how the cloud era has impacted selling and selling efforts, and CloudCheckr is a really great example of a company who’s doing a lot of really cool things to take advantage of cloud go-to-market these days. So we’ll dive into that but a quick intro from all of us.

Don Addington:

My name’s Don Addington, I’m the Chief Revenue Officer for Tackle. And at Tackle we help software companies really, with their execution around their cloud go-to-market and bringing their products to the cloud marketplaces. Today, the three major hyper scalers, AWS, Azure and GCP, and we’re really focused on helping to turn these channels into a driver of significant and repeatable revenue for our customers, and we kind of all woke up overnight and cloud spend is the one thing that’s been the constant up and to the right. So as software companies, how do we take advantage of that, and make sure we have good strategies to partner with the partners where all the money seems to be going these days and take advantage of that and show up, is more convenient for our customers, and hopefully add some value in the process.

Don Addington:

So we’re a SaaS based business, we were remote before remote was cool or mandatory. That’s my joke there, Mike, that I make again, and again. But it’s true, so just kind of fast growing company. We’ll be doing a bunch of work in the coming months around cloud marketplaces, and really how to leverage them as a software company. We’ve got a series coming up for revenue leader.s, so there’s a link there in my bio, but I’ll hand it on over to… I think Elissa is… I’m sorry, Mike’s up next for [inaudible 00:06:31].

Mike Pollack:

No worries. Thank you, Don, Erika, and the entire Tackle team for putting this together for the audience that’s attending today. Thank you very much for checking this out. Hi, I’m Michael Pollack, I’m co-founder and CEO at Intricately. This is now my fourth time as a founder, but my background is primarily as a sales leader, as a product leader early in my career and also a long time ago in management consulting. The history of Intricately, the focus of our business is very much about monitoring digital product usage, adoption and spend. So when you talk about the hyper scalers, like Google and Microsoft and Amazon, they’re all customers of Intricately, they rely on our data to identify the best companies in the world, the best prospects to prioritize those prospects to determine what to offer them and when.

Mike Pollack:

We work with amazing companies like CloudCheckr, which we’re going to hear from here today. But really, what we’re focused on is kind of like how Google Maps maps the physical world, we’re focused on the digital side of things and helping digital businesses find their best digital prospects to purchase, prioritize, expand with. I’m really excited to be here today, so thank you for having me.

Elissa Livingston:

Awesome, thanks, Mike. Hey, everyone, Elissa Livingston, SVP of growth and strategy at CloudCheckr. I’ve been in the tech industry for about a decade now following a very long stint in various capacities in the legal field. Year number five at CloudCheckr. CloudCheckr’s cloud-management platform is designed to give cloud users and service providers the visibility and actionable insights that they need to simplify cloud adoption, and to optimize cloud environments. At CloudCheckr, I lead our overall go-to-market strategy and organizations including sales partnerships, alliances, and both Tackle and Intricately are critical components of our go-to-market strategy and our workflows. So I’m excited to join Don and Mike on this webinar, and thanks for listening in.

Don Addington:

Yeah, thanks to both of you for joining us. So I think CloudCheckr is a really great case study and an organization that has taken advantage of cloud selling, cloud go-to-market and has had to evolve. And I really felt like in pulling this together, there was a good story between Tackle and what Tackle has been able to partner with CloudCheckr to do in terms of leveraging some new paths to market and faster paths to business at the end of the day. And then Intricately and where Intricately has been able to weave into CloudCheckr strategy as well. So we’ll kind of talk about how the both of us have kind of come together to support CloudCheckr and really, have Elissa take us through how their strategy has evolved.

Don Addington:

But when we talk about the cloud era and selling in the cloud era at Tackle, a lot of our customers are all software companies and they’re all looking for a faster path to selling, they’re looking for budget dollars that are available. A, it’s hard to get onboard as a new vendor and really just even get through a vendor management process anymore, somebody decides they want to buy you, that’s great, but there’s still another six month battle to get on boarded and all that kind of stuff. So trying to shrink down that time to actually start working with your customer, start recognizing revenue, start delivering value. That’s become really important and increasingly difficult. I think last year, especially over this past year as people moved from offices to remote all of a sudden, all those bits and pieces of the organizations are trying to figure out how to work together and procurement and vendor management. And legal they’ve all taken a big hit in terms of how do we do this, how do we do it remotely.

Don Addington:

And so speeding up that cycle has been really important. So software companies that have really come to the cloud marketplace is to tap into, “Hey, how do we offer a more convenient purchase experience for our customers? And how do we get closer to where our customers are actually spending their money?” So you kind of wake up and overnight every customer that you’re selling into has spend with AWS or Azure or Google and it’s committed spend. And so can you take advantage of that? So software companies have really started to look at the cloud marketplaces as a critical part of their go-to-market and really have started defining, “What’s our cloud go-to- market?” And that doesn’t necessarily have to mean products that day one are deeply integrated with the clouds, but leveraging the clouds as fulfillment, and then kind of figuring out over time, “Hey, how can we adapt our product and our strategy, making better use of these marketplaces or do we just continue to use them as fulfillment?”

Don Addington:

So it’s been an interesting journey, I think, for a lot of the software companies to figure out, “Okay, there’s this new delivery mechanism for us to go sell, there’s partnership needs that come as a result of that, there’s technical requirements that come as a result of that, there’s kind of defining who you’re selling to, and how to reach them, and how to understand what a good target is.” And that’s all relatively new for software sellers, right? So when we think about how software sellers have had to evolve their game, you may be selling to the person who’s going to buy your software and benefit from it, but there’s a rest of the organization, you got to go figure out how to navigate to get to the actual the paycheck, how do they purchase? So it’s not just selling your product and making sure it fits the need, it’s can we make sure that the buyer can actually buy it, and thinking about the strategy around that?

Don Addington:

So we’ve really helped sales organizations evolve and start to embrace this, and I think Intricately brings to the plate, a really interesting piece of the puzzle as well, in terms of understanding, “Hey, what’s the right audience for you? Who’s spending money? Where and how relevant is that to you?” So Elissa, I think you had a really good kind of, I think, kick-us-off story on how CloudCheckr has kind of evolved in how you think about your selling process, both making use of some of that very data and information that Intricately is providing, and then the delivery mechanism of, “Hey, let’s get deals done fast and without friction via the marketplaces and Tackle.” So maybe if you could kick us off on a little bit about the CloudCheckr journey there?

Elissa Livingston:

Yeah, absolutely. We’ll start with the marketplace since that came first. So because of our strong partnership with AWS and Azure, we were pretty early on both marketplaces, we’ve been lucky enough to kind of evolve with them. And we’ve seen iterations of the marketplace and how sellers are adopting it as a procurement tool, as a way to find new software. Initially, the marketplace really afforded our customers the same sort of on-demand, as-needed buying experience that they were familiar with, with cloud services. For third party tools and applications like us, the cool thing for CloudCheckr is that a CloudCheckr user is very likely that same person who’s spinning up and down instances. And so it was critical and also valuable for us to adapt to selling on the marketplace as a way to reach our primary users.

Elissa Livingston:

But what started for us in the early days as that try-as-you-buy vehicle that’s sort of akin to what used to be the free trial we offered via our website, it really quickly morphed into a much more sophisticated selling tool for the cloud providers, for our sales team and for customers, and this is where our partnership with Tackle was born. As the marketplace grew and expanded, it got increasingly complex for us to adapt, other sellers to adopt as well and for us to differentiate. We found that we really needed to kind of refactor our sales process, our sales enablement materials to teach our sellers how to leverage marketplace as a tool. Even our pricing structure was something that we had to revisit, it’s been on a couple of iterations to better align with how buyers purchase via the marketplace as well. And those were all things that when the Tackle partnership kicked off, we looked at, adapted to and ultimately have kicked off a really, really successful sort of marketplace go-to-market.

Elissa Livingston:

We first realized the huge benefit of marketplace in probably Q4 2019. A couple months after our kickoff with our launch with Tackle, we put marketing and sales resources into this new initiative, and we sold about 25% of our new contracts in that quarter through the marketplace, which was a huge lift from prior quarters. The really interesting and intriguing thing that we saw, though, is that they closed 40% faster than the direct contracts sourced in that time period. So now all of a sudden, the marketplace is not only a place where users can find us, but it’s a sales-cycle accelerator.

Elissa Livingston:

Again, a few months after that in April 2020, I don’t have to remind everyone what happened around that time period, but budgets were freezing and legal and procurement teams were directed to pause all new purchasing, the customers who really needed our software were actually able to procure us via the marketplace, leveraging their already established cloud budgets. So rather than have an additional line item, additional budget that needed to be approved, by purchasing us on the marketplace, that purchase was just bundled into the cloud budget that had already been set aside.

Elissa Livingston:

In April 2020, we sold 100% of our new customer contracts on the marketplace. And in fact, since then, since Q2 2020, we’ve transacted more new contracts via the marketplace than direct which is just a huge shift from the year before. And because of that our sellers are now incentivized to raise marketplace procurement earlier in the conversation, they’ve seen firsthand how fast a marketplace deal can close and how much more accelerated that sales cycle can be.

Don Addington:

I guess, a couple of very interesting things, maybe to sort of dig into a little bit there. So I think the perception of marketplace before you ever get into these marketplaces is there’s a bunch of products on the shelves, somebody’s going to browse by and find the one that they want, and they click and buy it and the magic happens, right? And that is a great feature of the marketplace is that you can kind of have these try, find and… find, try-to-buy type of experiences. But most of the selling that happens is really more marketplace as fulfillment. And so, I guess, was that a story that evolves with you all, because you’re doing custom contracts with discounts, and you’re really doing a direct deal into selling it through the marketplace, right? Was that kind of the perception of how things were going to be when you initially envisioned marketplace, or?

Elissa Livingston:

No, not at all. Yeah, I mean, back in the day, when there were dozens, maybe hundreds of ISVs listed on the marketplace, it was pretty easy to stand out there. You could scroll through all of the options in half an hour, 45 minutes. Now, there are thousands, and it’s super easy to get lost. And for us, the marketplace has become much more of a procurement channel, or procurement strategy than it is a marketing opportunity. Certainly still very useful for customers to try before you buy, we have folks kind of testing out that way for sure. But in terms of how we see it, it’s much more about the sort of bypassing legal and procurement.

Mike Pollack:

A list of maybe two questions here, one from the audience, just somebody who may have joined a little bit late asking-

Mike Pollack:

… when we say marketplace, what are we talking about? So it might be helpful for you to give your definition of what that means, but then also to Don’s point, unpacking this notion of marketplace as a channel or marketplace as for fulfillment. I’d love for you to elaborate a little bit on how you approach… I’m not sure if these are alliances or channels, or how you think about them, but if you could tackle both those, that would be great.

Elissa Livingston:

Sure. Yeah, really good question. So I’m happy to… If you guys have anything to add, feel welcome to jump in. But from my perspective, I call marketplace a cloud-provider storefront online, basically. So just like you go and purchase whatever it is that you purchase practically every day from amazon.com, Amazon Web Services has a similar storefront for software for companies, as does Azure and GCP. So my definition of marketplace is sort of all encompassing the three major cloud provider’s marketplace or storefront online.

Don Addington:

Yeah. And I think the term marketplaces everywhere. So it’s actually a really good question, right? And when we think about marketplaces, we’re thinking about channels for transacting, and really driving revenue. And I think, Elissa, to have you answer the second part of Mike’s question would be important too, I’m like, “Where does this fit?” Because for Tackle, what we see is there’s a real evolution of… I think there’s definitely a work [inaudible 00:21:16] partnership and understand there are so many programs that are available, and there are feet on the street available to tap into of the sales reps of these cloud providers that have these marketplaces.

Don Addington:

So really, the hyper scalers being AWS and Azure and GCP, they have huge armies of people who can sell, they also have a lot of product that’s on their marketplaces, so they’re not going to know everything. So you have to really understand like, “How do I go work this thing?” So we see revenue and alliances, getting even closer together, when we’re talking about how to leverage a cloud marketplace and really build a strategy that works really well. So maybe, yeah, to the second part of Mike’s question for you guys, where does it fit in for you? And how do you define it?

Elissa Livingston:

Yeah, absolutely. So when I think about sort of how channel is widely described, I would… I think, sell through, and with the cloud provider alliances, and marketplace, it’s more of a sell with motion. So marketplace ends up being the procurement channel or the procurement vehicle, or what ultimately… the path of the sale ultimately goes down. But in terms of the… The customers are direct, the field sales team is selling them, and they’re selling alongside the cloud provider sellers as well. So the way that I would kind of describe it is if the products are symbiotic, then so too are the go-to-market efforts. So what I mean by that is CloudCheckr’s solution, like so many other ISVs, augments and improves the cloud infrastructure users experience. And we literally wouldn’t exist without the cloud providers. And at the same time, the cloud providers advocate for their customers use of our product, because of how it simplifies and accelerates cloud adoption.

Elissa Livingston:

And meaning that the cloud-provider sellers and the CloudCheckr sales team have very much the same objectives, and in some cases, the same incentives. And so we really built that partnership with our counterparts on the cloud provider side into our sales cycle, incentivizing the… excuse me, prioritizing opportunities that are brought to us by cloud providers, learning about the cloud provider’s programs so that we can align and map our sales programs to those programs as well. And just really integrating as closely as possible, our sales efforts with those of our counterparts, knowing that we’re really trying to get at the same solution.

Mike Pollack:

I was going to dig into that response there, Elissa, just a little bit and just love to understand that, obviously, these marketplaces drive interest, right? So they’re a partner in that way. But we’d love for you maybe to talk a little bit about how the process for CloudCheckr works today, right? You have these marketplaces that operate both as a top of funnel but also it sounds like a fulfillment channel. I know you’re a customer of ours, we play a small part in this but we’d love for you to talk through how you use data and informed decision making to really deliver kind of, I’d say your top of funnel objectives to some extent, but also your follow through around delivery, right? Because it’s fascinating how these marketplaces have transitioned again, from storefronts to fulfillment systems, and this whole thing. So would love if you can kind of synopsize that for our audience here today?

Elissa Livingston:

Yeah, absolutely, I’m going to kind of pull those two apart, Mike, and talk a little bit about how we leverage data first and foremost at the top of the funnel. As you know, we partnered with Intricately in the fall of last year, and with the insights that we were able to gather, I almost immediately realized that we had a big gap in our sales and marketing alignment. We were doing a lot of the right things in marketing. But they were directed at mostly the wrong audience. So you think, “Who does CloudCheckr help and service?” It’s cloud users with complex environments, and very often, those who want to are able to purchase software via the marketplace.

Elissa Livingston:

Based on the assessment that we created alongside Intricately which we named the likely to win model, we were very quickly able to identify why we were sourcing these, what we called, false positive opportunities, and pivot more toward our ideal customer. So what we found is we were looking at customers, we were looking at prospects that appeared very similar on their face, right? Maybe they were Fortune 1,000 companies in the healthcare field, and a lot of the same titles were checking out our website. But the big, big difference is that one company was just getting started in their cloud journey, you could see via Intricately, that they were starting to adopt cloud-based services and software, they weren’t far enough along that we could provide value to them.

Elissa Livingston:

On the other hand, a company that looked very similar, was much further in their cloud journey. Most of their software and infrastructure was cloud based, perfect opportunity for us to come in and help unpack some of the complexity in their cloud environment. And that change at the top of our funnel really completely shifted the types, or I should say, the value of the prospects that we were marketing to, and ultimately selling into as well.

Mike Pollack:

I’m curious to unpack that, and maybe just share an analogy with the audience today. If you had a physical storefront, and you saw the kind of person that was coming into your store, you might have some kind of idea if that person’s a fit, right? You think about if you’re… the ability in the physical world to do that, in the digital world, you don’t have that, right? So can you maybe just share how challenging that was, right? Because on paper, when you’re looking at a prospect, you know very little about them, the salesperson can ask some questions, or marketing has done some due diligence, or some ABM has been happening. Can you talk about that for CloudCheckr? A little bit about the key attributes that you realized you didn’t have, and maybe it took having them to understand what those were, but if you could comment on that, I think that’d be helpful?

Elissa Livingston:

Yeah, absolutely. That’s a great analogy, I think it perfectly describes the problem that we were running up against, which is we couldn’t see the specific attributes that what’s in our store valuable to the person who is out front, and that caused our conversion rates from the top of the funnel to be incredibly low. It was really frustrating, we were, again, doing all the right things, just pointed at the wrong person, or at the wrong prospect. And once we determined those elements that were very important to us, right? Not only the amount of cloud spend, but other elements that would indicate complexity in a cloud environment. So things like a hybrid environment, perhaps there was a migration in process, the number of the number of applications running in the cloud versus on-prem, increasing traffic. If the prospect has a website or is in retail, increasing traffic would show that they were growing or in some other way, expanding their footprint.

Elissa Livingston:

There were probably about 12 other kind of unique and interesting points that they didn’t make up the initial sort of shift, but they are now providing us insights into the activities of our customers and our prospects. So not only using it at the top of the funnel, but using that data to better understand our existing customers. To look out for opportunities for us to jump in and teach them a different use case based on what we see them doing, the patterns of their usage that we’re able to pull and glean from Intricately. So some really interesting stuff.

Don Addington:

Yeah, I think that intersection of partnering with the cloud providers and understanding this is when we talk about kind of revolutionizing the way that you sell on a cloud era, you really have to understand, like, “What moves the needle for them? What’s important to Amazon and Azure, as your partners?” And they want to see consumption grow, they want to deliver more and more valuable things to their customers, so their customers remain their customers and keep on spending more money on [inaudible 00:30:50], core infrastructure, all those sorts of things, right? You need to know that as a software provider, who’s going to partner with the cloud, and be able to kind of bring that to the cloud providers, say, “Hey, when a customer buys CloudCheckr, here’s what it means for AWS, here’s the uplift.” And their sales reps are getting paid when your stuff sells through their marketplace, that’s one great benefit, but what are the other benefits? And the more you can focus on and capitalize on those benefits, the more they’re going to want to partner with you and that kind of team with.

Don Addington:

But it’s really like… I think about sales intelligence, right? And the cloud providers can provide you some sales intelligence. And if you think about going into to sell the right customer, you still have to figure out who to talk to, and the cloud provider is going to know, like, “Hey, these are the people that are actually signing the checks that spend money with us. So you should involve them in this equation.” Whereas Mike, what you guys are able to bring to the plate, I think is super interesting, as well as like, “Sell smart, don’t sell dumb.” Like, “No…” Like, “Hey, this is…” Elissa had the perfect example, right? Like, “Hey, we’re talking to the right people, we’re doing all the right things, it’s not converting, it’s not getting us there.” Because you’re not necessarily looking at the right metric at the right time. And that’s where I think this whole idea of sales intelligence right now, what it means in the cloud era of getting the right data at the right time to make sure that you’re targeting the right people, is really interesting how that’s evolving, and Mike, I think propelling a lot of your business, right?

Mike Pollack:

Yeah, I mean, again, you play out that analogy, you think about in the physical world, if… This analogy I use in our business a lot, it resonates with customers. Imagine you sold forklifts, in order to sell a forklift to somebody, they have to have an industrial facility. From the exterior of a building, you can tell if they’re going to need a forklift or not. We know most restaurants won’t, and we know most businesses aren’t going to need forklifts, but you know industrial buildings will. So take this example, and imagine you’re a snowflake who is an Intricately customer, or you’re Google or Amazon or Equinix, you have the same challenge that you can’t tell a lot about a business’s priorities, digitally speaking or otherwise, at all in the digital world.

Mike Pollack:

And so therein is the fundamental challenge that even these hyper scalers struggle with too, which is, how do you… And again, for them, it’s not a question of prospecting, it’s a bigger question of prioritizing. And if you think about the problem that CloudCheckr contends with, the hyper scalers have it on a much bigger scale. And it’s at a much more acute level, because ultimately, the question they have is, “All these companies around the world generally are increasing their spend on the cloud. Who should we dedicate the meager amount of human resources we have to really engage?”

Mike Pollack:

And the marketplace is, to some extent, to Elissa’s point, are incredibly symbiotic for an AWS or GCP or an Azure because A, it increases consumption of their core product, but B, it really drives stickiness. And so these marketplaces are core parts of that. But Don, yes, to your point, I mean, today, in the physical world, we can collect a huge amount of data, you can look at a business before seeing it using Google Maps, or wherever you want to get that data from, in the digital world to understand what’s a business’s digital maturity? How hybridized is their infrastructure? How many points of presence do they have? That data is generally hard to come by, and so many of our customers put that data to work, whether it’s top of funnel or middle of funnel, or even to Elissa’s point, being able to build the model to understand the TAM, or the likely to win, just to ensure that they’re spending the cycles on the best opportunities.

Mike Pollack:

And so it’s worth just pausing for a second and noting that the cloud is a marketing created concept, right? It’s not a real thing. So it means different things to different people and different businesses are experiencing different elements of it. So I think this sets up a really interesting kind of configuration where we are today where, overall, the tide is kind of rising across the industry, companies are spending more on infrastructure, whether it’s on-prem, or hybridized, or in the cloud, increasingly, it’s in the cloud. But I think that makes for a really interesting opportunity for all the players. And so maybe I turn it back to Elissa here with a question around for your customers, one of the challenges today, is just trying to cut through the noise, that there’s so many products that are out there, even though you have a best in class product, and even though your product can actually save them money and make their business more efficient, it’s not that you’re competing against competitors in the space, is the challenge increasingly competing against the noise and you find it the marketplace accelerates that or makes that harder? How do you approach that?

Elissa Livingston:

Yeah, absolutely, really good question. It’s noise, or it’s maybe a lack of clarity, there’s so many complimentary solutions out there that look sort of competitive. And that’s because cloud providers are just continuously releasing new products and services, it’s super hard to keep up. And unless you are really, really deep in the technology, the understanding how each component or each solution, third-party solution, maps back to the cloud provider’s solution, it can get really confusing. I think the idea of marketplace, again, as a listing of options, perhaps can create noise in a way that it certainly didn’t use to, but marketplace as it is supported and advocated for, in a sort of better together selling solution is really valuable and successful.

Elissa Livingston:

And let me double click into that for a second. So what we’ve been starting to see more and more is partners, service providers, bundling solutions on the marketplace together, and even listing their own bundled or package managed solutions which are driven by technology. We have a few partners who are doing that with CloudCheckr today. And so I think more and more it continues to be a great procurement channel, it continues to be a great tool to get around legal and procurement red tape, perhaps does start to create some noise, just given the volume and the multitude of options out there for sure.

Don Addington:

I want to maybe go back to something you said a little earlier because it caught my ear, and a lot of times when you’re opening up a new channel, the very first measuring stick, KPI, is revenue, right? And what’s the revenue through this channel? Or what’s our customer acquisition through this channel? And any channel can take a little while to kind of get off the ground and get rolling. How thoughtful were you all about the KPIs that you were looking at? You mentioned 40% faster on deals closing, that’s a great thing to measure when you’re talking about delivery through one of these marketplaces is. Of course, you’re going to pay them a percentage of the deals that go through the marketplace, because what are they doing for you, right? And shrinking a sales cycle is one of those and so measuring a direct versus a marketplace deal. But what are some of the other areas where you all have been intentional about KPIs that are, maybe not necessarily, “Here’s how much revenue we generated, here’s how many customers we brought in,” but, “We were able to do deals faster,” or kind of what’s that look like for you guys?

Elissa Livingston:

Yeah, sure. Absolutely. So, yes, in the early days, we assigned a revenue number to it, like we would any channel or if we were opening a new region, right? There’s a revenue number tied to it. That pretty quickly became… Not as important as the other impacts that we saw. So the important KPIs today, absolutely, how many deals are we doing overall that are not tied to marketplace? How fast do deals through the marketplace close? We do look at how many deals are sourced from the marketplace, though it’s negligible at this point. It’s much more important to see the impact on the actual sales cycle. The other-

Don Addington:

But as a baseline though, I mean, I think that’s an interesting one, right? That’s one that gets interesting over time. So what you want to be able to do is show your work and take credit for your work. The best credit take is revenue, but also like A, when we started with the cloud provider, 0% of business was sourced with them. As we engage with them we made investments in partnership programs and kind of climbing… There’s a lot of tiers that you can climb to get better status and that involves a little bit of investment of time and resources. So to be able to say, “Hey, once we did that, we moved from here to here.” Yeah, I think that’s one of the areas, again, to be super intentional about is just what’s the before and after?

Elissa Livingston:

Yeah, absolutely. And I think it might be helpful to say, when I’m talking about deal source from the marketplace, what I’m not including are deals sourced from the Alliance provider themselves, that ends up going through the marketplace. When you look at those, those to us… And all of that is due to the fact that we sell on marketplace, and we push deals through marketplace, we’re kind of checking the box, we’re fulfilling that piece of our partnership for the cloud providers, since that’s what they are after as well. Those on average again, close, much faster, close at a much, much higher win rate, we’re talking in the mid 70s. And, again, also are more valuable in terms of their ASP, just given that when we were introduced to a situation and introduced to an opportunity, that can go through the marketplace, it’s very likely that those users are ready to buy and can procure quickly.

Mike Pollack:

And maybe a question to go back to Don’s point, revenue, ultimately is a lagging indicator, right? Revenue means you did a bunch of things right. One of the bigger challenges, I think, increasingly, is understanding TAM, right? How big is a market? How do you even pursue something? Again, in the physical world, there’s lots of data around if you wanted to sell napkins to restaurants, and you were trying to figure out how big the restaurant universe is, or if you were… Again, trying to understand something in the digital world, that gets much harder. And so I think it’s compounded in two ways. Number one, a lot of companies, particularly early in their maturity, don’t exactly know who they’re ICP… they don’t know who their ideal customer profile is. They don’t know who they’re selling to.

Mike Pollack:

But I think also the other part of it is, with the cloud and with technology, to Elissa’s point, it’s moving so fast that who your customer was a year ago, may not be who your customer is today. So it might be nice, Elissa, for you just to chime in on how do you even think about the sizing, right? The revenue’s always great to talk about, but that assumes so many things have already gone right. The scarier part is in the beginning, when you say, “Oh, my God, which marketplace do we choose? And how do we decide which places to put our meager marketing resources or our alliance dollars?” Can you comment on that a little bit for our audience?

Elissa Livingston:

Sure. Yeah, absolutely. Did our investors send that question in Mike, are you here as a…

Mike Pollack:

I too have investors and I get hammered on the same kinds of questions. So I’m channeling that, I’m doing my best job at trying to [inaudible 00:43:09] at that afford.

Don Addington:

Report prep.

Mike Pollack:

Exactly right.

Elissa Livingston:

Yeah, exactly. Well, it’s funny, and I’m laughing because prior to us having our partnership with Intricately, we would always use the cloud provider’s public statements to kind of shape what’s out there in the market? How much of it do we have? How much of it do we have to gain? And it’s such a broad generic number, who knows what’s actually included in cloud services? And so it was always really… We knew it was really big, it was very hard for us to reverse engineer in a logical way that was defensible, right? And could help us map our investment to our efforts.

Elissa Livingston:

With Intricately data, we’ve been able to get really precise Here’s the world of cloud spend, let’s take off this chunk of customers, because we don’t really… they either have another solution, or we don’t really map to what they need specifically, there’s something about what they need that we don’t have. Then we’re going to take off all the very small, just starting out in the cloud, customers that were not quite ready or aren’t quite ready for our solution. We’re going to continue to pare that number down until we have a really solid, confident number. And thankfully, that number was still in the billions, right? It’s still huge, right? But now it’s defensible, it makes sense, and we have the data to back it up. We have the data to show that if we continue to make this investment or accelerate this investment, we can accelerate our revenue generation based on this data, this really valuable data that we didn’t have before.

Mike Pollack:

On that topic, and maybe this is a question for you, Elissa, but also for you, Don. For companies that are considering entering a marketplace or considering that, how should they think about constructing… It’s not necessarily the TAM, but just their approach? And how to think about that, right? Because to enter a marketplace, to participate, carries some economic costs, or strategy costs, or something. So how do you counsel companies to… What’s the recipe to determine if it’s even a fit for you? And it might be helpful, Elissa, for you to talk from your experience, but Don, obviously, you’ve got plenty of experience here. So I’ll toss that to either of you.

Don Addington:

Maybe I can start with a broad and then you can get more specific about how you’d answer it from the lens of CloudCheckr. First, we recommend, be intentional about why you’re getting into a marketplace, and have a reason there. And so increasingly, if you’re a software company, if you’re a SaaS business, you’re built on one of those three cloud providers. It’s pretty much you’re either AWS, Azure or GCP, and that’s where you build your software. And that’s a natural place for a partnership, because anytime you’re winning, the cloud provider’s winning. Extensively, you’re eating more and more infrastructure as you get more and more customers. And so there’s a natural, symbiotic relationship there.

Don Addington:

So one fundamental is just kind of who’s your natural partner from a built-on perspective? But broader than that, it’s really where are my customers spending their money today? So who is my target market? And I think, Elissa, you talked about narrowing down the TAM, and who do we want to take a look at? And then where are they spending their money? And we look at this as something that you could do as a provider, as just ground game, a little adding into your qualification process when you’re talking to your prospects, who are your strategic cloud providers? Are you spending a lot of money with AWS, or GCP, or Azure? And it doesn’t matter if you’re selling DevOps tooling, or business application software, or… The people that you’re talking to might not be close to cloud spend at all, but you know when your company is spending on $100 million a year with AWS. It’s like, “I think we’ve got a good relationship there.”

Don Addington:

So asking those questions and being intentional about finding out like, “Are my buyers already spending money there? Are they likely to have contract vehicles in place?” And thinking about the marketplaces, first, as a model of fulfillment, and getting faster access to a wallet that’s already located at the cloud provider. Would it be easier if we just landed on an existing bill? To suss out some of those questions and do a little bit of a… some ground game around does that make sense? I think Mike, a lot of data that you guys have is additive in that picture, right? Who’s spending what, where, with whom, and getting targeted there? But also to put it in the hands of the sales teams and to weave into your sales motion, because that just is going to provide the uplift when you actually go, “Okay, it makes sense for us to enter into one of these marketplaces.” The early days are putting this in the hands of your reps, not to be experts, but to kind of do a little bit of digging and figuring out, “Is this a good position for us?”

Don Addington:

So, I mean, those are some of the things that we think about. I mean, A, number one is just where are your customers and where are they spending their money today? And if it’s one of those cloud providers, it makes sense to explore what it means to get closer to them.

Elissa Livingston:

Yeah, I’ll add to that. Where are your customers, and if they are multicloud, where is the majority of their spend, right? And we’ve all alluded to this a little bit, but I’ll express it outright, right? Is if a customer has private pricing with a cloud provider, and they purchase your solution on the marketplace, the value of that contract that the charges get applied to their commit, it burns down their commit. Some cloud providers do 100% of that charges, some 50, it varies depending on how they’re competing with each other. But this is huge, because it means that… It’s huge for a number of reasons, one, it means that the customer is using you to fulfill their commitment, that they’re also… in doing so they’re also able to make a larger commitment to the cloud provider to get a better discount, a higher discount, with a higher commit. And the cloud provider sellers love it as well, right? They’re all in some way, shape or form compensated on the volume of cloud spend or growth of their customers.

Elissa Livingston:

And that marketplace purchase rolls into that EDP or that EA, it’s going to balloon. And so you’re helping the customer and you’re building an alliance at the same time those cloud sellers. So looking to, not only where they’re spending, but where are they spending the majority of their spend, which is most likely where they have their commit. Also, where your partners are working, right? If you sell through partners, sell with partners, where are they spending their time? All the cloud provider marketplaces have partner-led transaction opportunities as well. So partners can sell your software on the marketplace too.

Elissa Livingston:

And I think the third thing is, if you have a unique and sort of new solution, and there’s a cloud provider that doesn’t already have a really strong partnership, go seek that out. Because even if you’re not built on them, if you have an opportunity to forge a new interesting partnership for that cloud provider’s customers, that’s going to give you a differentiator and kind of a foot ahead of the competition as well.

Mike Pollack:

Maybe just a quick follow on for Elissa on this front, and then maybe Don, we’ll send it back to you, so we have some room for questions. But maybe just to point out we’re collecting data about all sorts of digital usage, right? Obviously, cloud spend is a piece of that, but what products, applications, points of presence, etc. I’m curious, and maybe just to share with the audience, Elissa, when you started deploying better data into the sales organization, did you notice an immediate impact? Was it kind of across the board? I’d love to share that a little bit, because I do think something that this audience should take away is that marketplaces are the future, cloud is the future. But what that means is lots of companies are going to adopt it. So targeting focus is really the hardest part. Can you comment a little bit on what the focus did or focus, and then the results? And maybe that’ll just help build the case here.

Elissa Livingston:

Yeah, absolutely. So the initial sort of reaction was multifold. But I think first and foremost, giving our sales team the visibility into what is important to them, and what makes us important to our customers, which is cloud spend and the complexity of the cloud. Really, it, well first, not only helped them get better at forecasting MRR, I can tell if… I can see the cloud spend and that MRR doesn’t match, I’m going to call you out on that. But it allowed them to prioritize the opportunities that were going to be… they were going to provide more value, and were going to be bigger for them and hitting quota. So you kind of started to see that shift. We’re also seeing that in customer retention, looking out for the trends in our customer data. So that’s been interesting as well.

Elissa Livingston:

And I think the last thing that we’ve seen is when we applied this likely to win label, which was based on the Intricately data, no one wants to lose a likely to win opportunity, right? So it’s allowed us this opportunity to have some friendly competition, well, how many likely to win opportunities did you win or lose last quarter? And it’s been fun, but it’s also been a really good way to get people thinking about, “Okay, if this isn’t going well, why is that? What am I missing? What data can I go look out to figure out why I’m missing the point on this opportunity?”

Don Addington:

Yeah, you mentioned customer retention there, which I think is a cool ort of a happy byproduct of these cloud marketplaces as additional procurement vehicles. We saw this past year, especially, is kind of, I affectionately call it the dive-in save. And so SaaS companies churns kryptonite to a SaaS company, right? So we want to avoid that, we want to remain sticky, but if budgets get caught there’s various things that can happen. To be able to kind of defend your turf and come in through a different door if possible, we saw last year, a lot of our customers with a difficult conversation around, “Hey, we want to keep on using you but my budget’s been cut,” being able to kind of pivot that conversation and say, “Okay, what if we were able to fulfill this through your cloud partner instead of going direct with us?” And that then becomes kind of part of your cloud spend.

Don Addington:

So Brian asked a question in the window about upsell and renewals and where this fits, have you guys… Two questions, maybe they’re like… Have you folded marketplace into your resell motion yet? And then kind of follow on to that is, what the upsell opportunity looks like, and I’m not sure in your normal course of business if an upsell happens in six months, and you’re kind of fast follow or if it’s a longer tail, but we’ve seen a lot of customers shrink that window from sort of land to expand being a little [inaudible 00:55:57] to large marketplaces? So maybe two questions packaged in there.

Elissa Livingston:

Yeah, good questions too. Marketplace absolutely is a part of our renewal process. When we advise customers on their renewal, we’re very often talking about how much they’ve grown over the past year, which we can see, but we’re also helping them understand that as they go to maybe renew or renegotiate their EDP, they have all this really good data they could use to do that. And then also talk to them about how much more efficient and helpful it will be in bringing that EDP down if we renew via the marketplace. And because, again, the marketplace has evolved, our partnership with Tackle allows us to facilitate… The marketplace now with Tackle’s help facilitates, essentially, any type of contract or commercial terms that we would sell direct. So when we tell customers, “Hey, you can renew on the same structure, but via the marketplace and [inaudible 00:57:05] down your EDP.” It’s awesome, right? It’s huge for us.

Elissa Livingston:

Upsell, not as much, mostly because it’s not as relevant to our business, we have one product, and we do expand out usage of it. But in terms of upsell, it’s not as relevant to our business, but I definitely see how that could be useful for sure.

Mike Pollack:

Can you comment on, maybe since entering the marketplace, or maybe it’s the addition of Intricately data, but can you talk about time to close? And I think that’s a metric that’s relevant for audience. Obviously, likely to win is great, but are you seeing reduction in time to close?

Elissa Livingston:

Yeah, really good question. And I’m going to jot that down, Mike, because the implementation with Intricately is not quite far enough along that I can compare. But I bet if I went back and looked at some of the customers that we closed before we had your data, I would see a market difference. So I’m going to write that down and go back. And certainly with marketplace, the time to close has reduced drastically. So a year or so ago, maybe a little longer, I would say that our average time to close was about 140/150 days. This past year, it’s been around 120. So it’s pretty significant. Yeah. And much of that is attributed to how a marketplace allows us to bypass additional legal and procurement time.

Mike Pollack:

So then one question maybe for the audience that’s helpful is, I imagine a lot of the marketplace demand is inbound, people seek you out and effectively say, “Hey, I want to try this product.” And so in that instance, the sales cycle should move really quickly, right? That makes sense. I’m curious on the outbound side of things, obviously, having the marketplace gives one more reason for somebody to say, “Yes, it’s easier.” But when you think about outbound in general and using data, do you find that that whole channel it’s just its own whole beast, or it’s a whole different thing or you’re seeing, I don’t know, like a halo effect to some extent of the marketplace, starting to trickle into some your outbound efforts, if you’re seeing a lift there as well?

Elissa Livingston:

It absolutely is part of our outbound effort. And in fact, we’re leveraging Intricately data to tell us where and how that customer could procure, which marketplace they could procure with, and we’re introducing procurement in very early stages of the sales cycle, not as a, “Hey, let’s jump to contract,” but as a benefit of working with CloudCheckr, “Hey, by the way, we can skip all of this red lining,” which is never fun, “And just a heads up. We can sell via any one of these three marketplaces. Oh, and if you didn’t know, here are the benefits for your EDP, for your EA, for your commit.” And we’re able to come to that that conversation much more informed. And it becomes a consultation versus a unnecessary step in the sales cycle.

Don Addington:

Yeah, I think being able to plant that seed too is the companies who’ve done really well with marketplace. Mike, your point about sort of inbound interest and, “Hey, we saw you,” that happens. But the companies that are really, really successful, are using marketplace as part of their early on talk track qualification. Ease of procurement, and convenience in doing business is a killer feature. If I can be fast and easy to do business with and you know it’s not going to be a massive headache to bring me on board… A lot of buyers get the heartbreak of falling in love with the solution, and then it takes them eight months to bring that thing on, it’s like, “I don’t want to go through that.”

Don Addington:

So the earlier in the cycle that you can introduce as an idea and plant the seed that like, “Hey, a lot of our customers are having an easier time going through already established contracts, landing on an already established bill,” this could really help speed things up. A dead end question is more like, “Hey, do you want to buy us through the marketplace?” “Well, I’ve never done that before, I didn’t know you were selling a business application to a business buyer or a marketing buyer,” you’re probably going to get a quick no on that. The story instead is like, “Hey, I see that you’re doing a lot of business or we know that you’re doing a lot of business with AWS. Many of our customers who do have that spend and do have that relationship, they find it easier and faster to go through this vehicle.”

Don Addington:

So I think convenience in selling, convenience in procurement, and the sales intelligence that a company like Intricately can bring to the plate, it’s a good marriage of Tackle kind of bringing convenience [inaudible 01:02:08] we can purchase fast, we can go fast, we can leverage these marketplaces and Intricately really having a great lens on, “Where do I go spend my time? Who are the right people in the right time, at the right moment?” Is a pretty cool story.

Don Addington:

So we’ve tried to kind of answer a lot of the questions as we’ve gone through, there might be a couple that we didn’t get to, but I know we’re a little bit over time here. So I will wind down by thanking all of the all the participants and certainly, Elissa and Mike, thanks so much to both. I think you’re a great partner over at CloudCheckr and Intricately [inaudible 01:02:40] got an awesome business. So really great conversation. Again, thanks for joining us.

Mike Pollack:

Thank you for having us.

Don Addington:

All right.

Elissa Livingston:

Yeah, thank you, Don.

Don Addington:

All right, bye everybody.