State of Cloud Marketplaces Report 2021

The Transcript

Get the entire 2021 State of Cloud Marketplaces Report.

 

John Jahnke:

All right. Sounds like we are recording, and we will do Q&A at the end. So please feel free. Ask questions. I’m sure I’ll say that again, as we go. It’s 12:02, so why don’t we get started? Welcome everyone to our second annual State of the Cloud Marketplace Report. Excited to be here. Excited to get to share some of our insights and predictions with the entire software selling community. My name’s John Jahnke. I’m...

Get the entire 2021 State of Cloud Marketplaces Report.

 

John Jahnke:

All right. Sounds like we are recording, and we will do Q&A at the end. So please feel free. Ask questions. I’m sure I’ll say that again, as we go. It’s 12:02, so why don’t we get started? Welcome everyone to our second annual State of the Cloud Marketplace Report. Excited to be here. Excited to get to share some of our insights and predictions with the entire software selling community. My name’s John Jahnke. I’m CEO of Tackle. Prior to Tackle, I’ve spent my entire career in B2B software and enterprise tech, building customer-facing organizations and sales, pre-sales, and services.

John Jahnke:

With companies like EMC and Greenplum, and Pivotal, and CogniSen, I’m super passionate about emerging technology, startups, and helping companies efficiently their go-to-market systems. One of my favorite parts in my role at Tackle is I get to learn from so many of our customers, about what good looks like, from a cloud go-to-market standpoint, and help translate that into our platform and our product, as well as turn them into content the entire selling community can look to learn from. Lastly, I’m from one of the B towns of Cloud, Buffalo, New York. Our co-founders are from Boise, Idaho. Sanjay.

Sanjay Mehta:

Hey, everyone. I’m Sanjay Mehta. I’m the Chief Cloud Officer at Tackle. Thanks for joining today. Prior to joining Tackle, I spent 10 years at a global cyber security ISB, called Trend Micro. I was in leadership roles in Sales and in International Sales, as well as Business Development & Alliances. While there, I actually did my first cloud consumption-based pricing deal in 2012, while living in Australia, which is actually a pretty tech-forward place. But really early in cloud, back in the 2012 timeframe. And that’s hard to transition to a kind of a more cloud-centric marketplace-focused of doing business at Trend, which is not a bit of a case study on how to lean and how to do it right. It’s respected by some of the cloud providers and a lot of the ISB peers. I came over to Tackle to help other software vendors do the same, and really excited to share the knowledge and the findings in the report, today.

John Jahnke:

We’re so glad to have you, and all that experience, at Tackle to help everybody. I do want to thank all the sellers and buyers who participated in our survey this year. It’s really the data from that survey that allows to extract insight and share them on behalf of the community. It’s really amazing to see the response to a research and the consistent call from the community to have us publish this report, on an annual basis, for all sellers.

John Jahnke:

And we’re committed to conducting that research, and we will do so into the future. And, at Tackle, we exist to help software companies sell through the cloud marketplaces. We look to eliminate the need to build software to sell software, and our teams help you demystify the path to revenue through the clouds. We support hundreds of software companies, today, of all shapes and sizes from seed stage startups, looking to build their go-to-market marketplace native up to some of the largest software companies in the world, who are all looking to evolve their products and go to market for the cloud era.

John Jahnke:

We’re backed by world class investors at Andreessen Horowitz and Bessemer Venture Partners, and they believe a couple of things, one, the clouds will continue to change the way that all companies operate and build software into the future, and the second is that go-to-market will continue to evolve tremendously for software companies over the next decade. We’re excited to share the research, insights, and predictions, and let’s get after it. So, why did we create this report at Tackle, and Erica hopefully the slides will progress. All right. There we go, and Sanjay laughed. He thinks this picture is a little creepy. I think it’s pretty funny.

John Jahnke:

At Tackle, we’ve always believed that the cloud marketplace, we’ve become the app store for B2B software, and that visions’s rapidly coming to light. We were founded in 2016, and at that time, the only coverage of marketplace centered around why buyers should buy from marketplace. As the company laser focused on sellers, we saw a clear need to kick off our own research, with the software seller persona in mind.

John Jahnke:

We survey leaders representing both software sellers, buyers to understand their usage of marketplace, its features, nuances, and ultimately the value that they receive from the shift. We see participation across industries. It’s from all categories of software, from security to data, to business applications, and company sizes follow a pretty natural distribution from seed stage companies up to decacorn and public companies. And while how they may initially use marketplace varies slightly, by stage of company, the value proposition is extremely consistent.

John Jahnke:

Over the last few years, we’ve seen a huge increase in the amount of coverage that the cloud marketplaces are seeing from analysts like Forrester, and Gartner, IDC, and Canalys. We’re committed to continuing to execute on our research and have that be complimented by the industry and all its research in the future.

Sanjay Mehta:

I think the only thing that freaks me out, more than that image, John, is the fact that my dog is make your dog bark during the webinar. Let’s see if we-

John Jahnke:

I asked my wife to have the dogs go somewhere. So I don’t know if they’ll participate today, but you never know.

Sanjay Mehta:

You never know. It’s 2021. So, at the highest level, and as you might expect, we’re seeing increasing traction with how buyers are buying through the marketplace and we’re seeing more and more sellers selling through the marketplace. The 2021 results show 42% more buyers are buying through marketplace than last year. Buyers, in general, are buying more than ever and they’re turning to digitally forward options for doing so. B2B buyers are also seeking a similar experience to what they experienced in the consumer world, when it comes to discovering, exploring, and procuring products. And marketplaces are helping to deliver on those preferences.

Sanjay Mehta:

From the seller perspective, 30% more sellers are selling via marketplace, versus the last year, and they’re tapping into some of the enhanced benefits and programs of the marketplace experience. It’s not surprising to see the increase in buyers and sellers adopting, when some of the world’s most powerful technology companies, like AWS, Google, Microsoft, and others, are driving cloud transformation projects across the biggest brands in the world, across industries, across geographies, and across technologies from leading-edge companies that are doing cybersecurity, and machine learning, and IOT, to name a few.

Sanjay Mehta:

What might be surprising, though, is why this is happening. The most profound change, this year, is the top reason, from survey respondents, for marketplace transactions, is actually shifting. Last year’s results found a focus on easing procurement as the main driver for both buyers and sellers. Well, in 2021, the results from both buyers and sellers point to the ability to leverage cloud span as the biggest single driver. We’ll spend some more time on that in a bit.

John Jahnke:

It wouldn’t be 2020 if we didn’t have a mute button that could issue… or 2021. Overall theme of our findings, this year is that marketplace adoption is going mainstream. The last 18 months have been unprecedented, while the world’s been adjusting to a new pandemic normal, e-commerce has accelerated in every form. Every business was thrust into remote, thinking digital first. That included how they sell. In our consumer lives, we shifted from e-commerce being a convenience to e-commerce being by default, and our behavior has been forever altered.

John Jahnke:

Last April, in Microsoft’s quarterly earnings reports Satya Nadella talked about how we saw two years of digital transformation in two months, and this transformation has not slowed down. While we all think e-commerce first now, B2B is exceptionally more complicated than B2C, and nuances of verticals and layers of distribution, and the complexity of pricing, old school payments, and lots and lots of people and process, have built this tolerance. People just kind of, have tolerated the inefficiency in the B2B ecosystem around e-commerce. But we’re starting to see that rapidly change, and cloud marketplaces are a significant part of that movement in software.

John Jahnke:

So the innovators in cloud marketplaces saw the art of the possible back in 2017 and 2018, in the earlier days of marketplace transactability. In 2019 and 2020, those innovators started seeing significant success, and we saw early adopters start to lean in more heavily. Now, we’re entering the phases of the majority. Cloud marketplace had been proven. The platforms are flexible enough to address most selling scenarios, and buyers are speaking with their wallets and behaviors, and all sellers want to be part of that movement.

John Jahnke:

So, 2022’s the year marketplace go completely mainstream. What’s that actually mean? It means that cloud marketplace will become part of everyone’s go-to-market system, and it’ll complement, both, how people sell direct as well as sell through channels. Sellers will also look to have more products than the cloud marketplaces, and that means more pricing options. That means bottoms up, and tops down, and even more bundles of products.

John Jahnke:

Lastly, all buyers will include marketplace commitments into their cloud budget, in the future, and we’re seeing a lot of movement around this already. And we’ll talk more about that, as we go. It truly is a win-win-win, for buyers, for sellers, and for the platform providers, this movement offers.

John Jahnke:

So cloud is dawning this new go-to-market age, but what does that new cloud era go-to-market age look like? So, we’re calling this new age the cloud go-to-market age. So, what does cloud go-to-market mean? Cloud go-to-market is a program a seller builds around leveraging and scaling their cloud marketplace presence. It requires people. It requires process. It requires technology, and the ultimate measure of success is selling.

John Jahnke:

I like this slide from Kyle Poyar, at OpenView, that highlights three eras of go-to-market, the first being a sales-led era, second being a marketing-led, third being a product-led era. We’ve now extended this to include a cloud go-to-market era. Clouds are elastic or scalable. They’re built for change. They leverage consumption-based principles and give you ways to manage things that were impossible in eras prior.

John Jahnke:

With cloud go-to-market, you don’t eliminate these other go-to-market eras. You leverage all of them in different ways, and you leverage them in the way that makes the most sense for your buyers to get value, and those will all be complemented in some way by the clouds. For existing companies, cloud go-to-market will complement your existing sales-led, market-led, and product-led motions. But, for new companies, the cloud go-to-market will become the new foundation with which you build up front.

John Jahnke:

We expect there will be more and more digital channels, as this movement evolves. And the muscle that sellers are building, as they learn to sell with marketplace, and execute on cloud go-to-market, will become extensible across other digital channels over time. Your business and your products need to be loosely coupled, in order to take advantage of this rapidly-moving digital commerce experience for software. And that’s an emerging trend, and one we’re excited to be a part of. Now that we’ve set the table on cloud go-to-market, let’s dive deeper into our learnings from our research.

Sanjay Mehta:

All right. Let’s dive into learning number one. The most dramatic shift in this year’s results was all about the why in marketplace procurement that I talked about earlier. Many cloud providers are making it increasingly attractive to procure through the marketplaces and both buyers and sellers are really taking note. B2B buyers are integrating marketplace usage in the cloud spend agreements in related discount programs.

Sanjay Mehta:

Sophisticated sellers are getting smart on this idea, as well, and they’re building a line of questions into their sales process to uncover cloud budgets, enterprise agreements, and related procurement teams familiar with marketplace purchasing. To do this, sellers are investing in their partnerships with their cloud providers to build relationships, gain account intelligence, and deliver great customer outcomes.

Sanjay Mehta:

So digging a little bit deeper, our survey results found that between 20 and 40% of cloud buyers are coming up on renewals with their first generation enterprise cloud license agreements. As these buyers consider the next level of commitment, the next level of committed spend, and the next level of discount, they’re looking at the ability to procure SAS applications and software solutions from the marketplaces, and it’s becoming increasingly attractive.

Sanjay Mehta:

Buyers are looking at extending these commitments with a confidence of shifting procurement of an ever-increasing amount of their overall software fleet towards marketplace while, at the same time, being able to maintain the relationships they have with ISVs, with channel partners, and with solution providers. According to Gartner, this trend is driving an overall increase in cloud spend, of 20% year on year, and predicted to hit nearly 400 billion in the next 12 months, some pretty massive growth on a pretty massive number. Finally, companies with Enterprise agreements with cloud providers are leaning in heavy when it comes to marketplace, with 90% of those surveyed this year planning on marketplace purchases increasing in the future.

John Jahnke:

So, our second learning, and this will build a bit on Sanjay’s first learning, is cloud budged ownership is evolving and enabling new types of marketplace buyers. So if we look at this, cloud is a company and boardroom priority. It’s no longer just technical, but it’s a combination of technology and business. Key executives across companies are involved in these strategic cloud initiatives. That includes the CEO, the CFO, the CTO, heads of product, heads of partnerships.

John Jahnke:

With the evolution of strategy, we’re seeing cloud budgets go company wide. And as Sanjay highlighted earlier, the top reason buyers are buying is to leverage their committed cloud spend. This year, the reports that 43% of buyers said this was the number one reason they buy, and that’s up 115% from last year, where that same number was 20%. We’re also seeing buyers outside of the traditional technical buying centers leveraging marketplace. 58% of the respondents who were in non-technical roles said they’d purchased through marketplace this year, and that’s up from 38% last year, and nearly all said that they would be purchasing through marketplace again in the future.

John Jahnke:

So, this kicks off this era of the cloud marketplace budget flywheel, and I think, as you think about the flywheel for cloud budget, it’s been indisputable for some time. But what we’re now seeing is software budgets for companies getting pulled into the cloud budget. And the more buyers how buy in this way, the more budget flows to the cloud and, ultimately, the more sellers going to take advantage of the movement. And the faster the flywheel moves, the more the platform providers will invest in incentives for both buyers to buy and sellers to sell.

John Jahnke:

Independently, both of these budgets, the cloud budget and the software budget, are measured in hundreds of billions of dollars, and are expanding rapidly. And this is why 82% of sellers say their number one reason to leverage cloud marketplace is to tap into cloud committed spending.

Sanjay Mehta:

That brings us to Learning Number Three. So the store of what marketplace means to the traditional software channel is a really interesting one, to say the least, and an increasingly active one, I believe. From the early days of fear, uncertainty, and doubt around marketplace if you’re a channel partner, to the early lean-in partners that started to transform their business beyond product resale or install and config specialists, and the cloud transformation service providers, to the partners of the future that they’re likely to offer fully-managed services around cloud offerings, including a robust catalog of curated software, some of their portfolio companies delivering well-architected solutions and supporting mission-critical business applications. The channel is really changing.

Sanjay Mehta:

In channel partners and channel-friendly sellers, I’m really starting to see cloud marketplaces as a major differentiator to their business. So the union of marketplace into channel is starting to take shape. Both buyers and sellers, particular well-established IS groups, are showing a desire to continue to work for the strong partners that helped them grow their business over the past years. In fact, 70% of respondents in this year’s survey say selling on marketplace is happening with resellers and MSPs, and at least some of their deals.

Sanjay Mehta:

Just recently, industry analyst Canalys has predicted that, by 2025, nearly a third of all marketplace transactions will flow through the channel. But in the conversations I’m having with some of our customers, who are the top marketplace sellers, one thing that I’m noticing is the assumption that yesterday’s channel will be equivalent to tomorrow’s channel. I believe that feeds into the lack of clarity, or lack of clarity, rather, found in the survey with 35% of respondents indicated that they weren’t clear on how the channel and the marketplace will ultimately work together.

Sanjay Mehta:

The role of the channel is changing, and must get even more sophisticated to serve cloud buyers with great outcomes. I think, only when you realize your classic definition of the channel needs to change can you see the art of the possible in your cloud channel. Much like the cloud transformation for corporations in the journey to the cloud for software providers, the channel, too, will experience a winding road to a strong marketplace business.

Sanjay Mehta:

Over the past couple of years, we’ve seen channel partners engage in marketplace selling, with a focus on transaction assistance, really. More recently, with expanding support from the cloud providers, which is fantastic, we’re seeing the sale of services. Channel partners are starting to add their own marketplace listings, ranging from assessments, to premium support, to things like managed services.

Sanjay Mehta:

It’s not a big stretch to see how this will quickly lead to some product and service bundles, making it easier for customers to discover, procure, deploy, and operate more prescriptive solutions. And it’s not hard to see a world just a couple of years away, where the most savvy channels will offer private marketplaces, with well-packaged in price, fully-managed solutions that really distance themselves from the competition.

John Jahnke:

We wanted to take a brief break from the learnings and share a bit of perspective from the venture capital community. With cloud marketplaces rapidly becoming the default go-to-market substrate, or start-ups, we gathered this perspective from our friends at Bessemer Venture Partners. Bessemer creates the annual State of the Cloud Report, and that report was the original inspiration for our State of the Cloud Marketplace Report.

John Jahnke:

So, if we double-click into this, a bit, Bessemer highlights how nailing software distribution, post product-market fit, is one of the hardest and most expensive parts of scaling startups. EVP also highlighted three go-to-market strategies top cloud companies employ this year, one of which was cloud marketplaces. Further, they state that marketplace is fundamentally linked to both product-led growth and usage-based pricing, making it not an or proposition, but an and proposition.

John Jahnke:

This year, in the Cloud 100 that was released earlier this year, 45% of the Cloud 100 are leveraging cloud marketplaces as part of their scaling go-to-market strategy, and that’s up from 35% last year. I’ve gotten the pleasure, when you’re building a hyper growth SAS company, you get the pleasure to talk with a lot of investors, and I remember in the early days, five years ago, we talked to them, and no one knew what cloud marketplaces were. Now, it’s pretty amazing, where when you talk to an investor, not only do they know what cloud marketplaces are. They’re able to quote portfolio companies having success, as well as list out others that they’re helping guide towards this cloud go-to-market motion in the future. Let’s pivot back to some learnings.

Sanjay Mehta:

Yeah, it brings us to our fourth and final learning we’re going to share today. This finding is all about what’s happening inside, I call it, the virtual walls of today’s mid-pandemic or post-pandemic software sellers. Cloud marketplace has been shifted from an alliance-only charter, only a few years back, to really a company-wide strategy. When we speak with customers, we hear about the opportunity to build marketplace businesses that rely, not only in a strong affinity with one more of the cloud providers, and great use case. There’s great customer outcomes, but also ensuring internal alignment across functional stakeholders, a real change we’ve seen in the last couple of years. The organizations that do it best appoint a chief cloud officer, or an equivalent, and they empower that person with the authority to drive change, and the permission to break glass, because change is hard, and you need to break that glass, maybe a little bit gently.

Sanjay Mehta:

So, when it comes to marketplace, the old phrase that you get out of it what you put into it holds pretty true. What worked for Kevin Costner in the Field of Dreams really only works in a cornfield. When it comes to marketplace, you can list it, but I wouldn’t expect buyers to magically come. That said, there’s no doubt that cloud providers are offering tremendous benefits and programs for both buyers and sellers to build the marketplace business.

Sanjay Mehta:

Results happen when sellers lean in and successful ISVs commonly identify five major steps on the road to marketplace glory. First is the formulation of vision, or cloud partnerships and marketplace transactions. For younger venture-backed companies, as john alluded to earlier, marketplace may be the primary route for go-to-market. But, for more established organizations, perhaps with the global field organizations, and supporting hundreds of thousands of partners around the world, the routes to market are move developed and, therefore, more complex.

Sanjay Mehta:

Understanding what marketplace means for your business and how it will co-exist with existing channels is really paramount. From there, gaining executive alignment across the business will help you to shape the vision and identify potential areas of friction, as you embark on your marketplace journey. We’ll talk about this a bit more on the next slide. The third step is understanding and actively participating in the programs the cloud providers have to offer, and they are truly plentiful. While each has its own flavor, in general, they’ve got requirements, and they’ve got some benefits, and it’s important that you understand them and their unique intricacies.

Sanjay Mehta:

Those benefits will stretch to sellers and buyer who frequently are designed to encourage cooperation with the cloud provider teams and their ecosystem of ISV and solution partners. So, for advancing marketplace sellers, investments in building out a team focused on cloud success and related relationships and the cloud providers is common and, I would say is, necessary. We’ll touch on that a bit more, as well.

Sanjay Mehta:

Finally, marketplace done right results in tailored go-to-market programs and co-sell motions, utilizing tools like AWS, ACE, and Microsoft Partner Center, to guide the way. So last year we predicted marketplace would create a new category of specialist roles. This year, we’re seeing an uptick in those specialist roles, and sales operations. But we’re also seeing an interweaving of those things throughout the organization.

Sanjay Mehta:

So in alliances, we see a clearly-defined head of cloud partnerships emerging as Chief Cloud Officer. In sales operations, we’re seeing specialized cloud marketplace deal desks that are helping fulfill offers. And we’re seeing teams of experts in the field, designed to help quota-carrying sellers sell and helping to get customers to navigate the marketplace buying experience.

Sanjay Mehta:

At the same time, we’re really starting to see alignment in the C-Suite, which is awesome. And we’re seeing CEOs take hold of the strategy and even talk about it in their public announces. We’re seeing CROs planning a hyper growth in their marketplace business and calling out those revenue numbers distinctively from other channels. CFOs are look ign for a deep understanding of margins and other key business metrics. At the same time, marketing product customer success and other teams, they’re all diving in as well, and ensuring that their approach is both intentional and tailored to reach the cloud by their audience.

Sanjay Mehta:

These teams come together to make a marketplace journey really, really soar. I encourage you to take a look inside your own organization and compare how you match up to some world-class marketplace sellers. So, to drive that point home, let’s look at one of them. Let’s look at the journey of an actual, but anonymous, top marketplace seller. Successes fuel additional investment but, more importantly, the courage to invest, I think, is what has really driven the growth.

Sanjay Mehta:

So, for this ISV, the marketplace selling is in about the fifth year of the journey. So, starting in 2016, with a single cloud allianced resource, trying to influence a pretty big sales organization, the first listing was launched in just a single marketplace. In the following 12 months, some basic integration efforts happened that the services level of cloud services integration level, and the legal team got generally comfortable with the concept of marketplace-based selling. You’ll see this a lot across back-office functions.

Sanjay Mehta:

By 2018, the team expanded modestly, added a cloud leader, added another Alliances person, and started to achieve some of the cloud provider partner programs, requirements, certifications, and things like that. That’s when the revenue hockey stick really started to curve. In the next couple of years, they doubled down on investments to increase Alliance’s coverage, to add marketplace specialists, to build their sales up to cloud deal desk and get those private offers really flowing and improve the offer workflow, overall.

Sanjay Mehta:

At that time, actually, the ISV selected a Tackle cloud marketplace platform to help them really scale. As 2022 approaches, that ISV is expanding into additional marketplaces, based on the strength that they have with their initial experience and based on specific customer demand. One thing we tell all of our customers and partners is, “You have to have a plan on leveraging that cloud partnership before you really dip your toe in the water.” So that customer-driven demand is important. There’s just been an incredible journey to watch and participate in. It provides a great blueprint for how others can win in the marketplace.

Sanjay Mehta:

So, now, ISVs don’t have to go through this stuff. You don’t have to go through the school of hard knocks, anymore, like you might have a couple of years ago. The road has been paved for you by sellers like this, and Tackle’s committed to sharing the learnings in our own playbook as well as the best practices we learn from other world-class marketplace sellers.

John Jahnke:

I love that journey, and I love our commitment to open source in the playbook to help other sellers succeed faster. So, bring it all together, the seismic shift is brewing, and I love e-commerce broadly, and I think B2B commerce moving online will be bigger than what we’ve seen in consumer e-commerce transformation over the last 20 years. This is a once-in-a-generation movement, and similar to the technical evolution towards cloud. It will spawn new systems and tools, and it will increase expectations, both of buyers and sellers, to engage in the way, and we’re excited to be able to help bring that to life.

John Jahnke:

So, taking one step further on what this means, also sellers will help buyers buy digitally in the future. This is a really significant change from the way that sellers and buyers interact today. Marketplaces are an initiation point of this broader revenue transformation, and are a key part of the digital sales future. The evolution of go-to-market will have more and more pass over time. And the muscles companies are building today to marketplace will help set them up to embrace the rapidly-evolving digital sales future.

John Jahnke:

So, from a takeaway standpoint, we make a bunch of predictions in the report. We’ll go through a handful of them now, but how big and how fast is this movement happening? With the cloud and software budgets colliding, and the cloud marketplace flywheel in full effect, we predict that cloud marketplaces are set up for a massive expansion over the next five years.

John Jahnke:

We believe dollars flowing to marketplace by 2023 will exceed $10 Billion, and by 2025, those numbers could reach $50 Billion, and with hundreds of billions in budgets for both cloud and software, this is still only a fraction of the total dollars. We think marketplaces will accelerate to be one of the fastest-drawing cloud services over the next five years.

John Jahnke:

Our other predictions in the report include the following. More on the evolving role of the channel across marketplace in the future. A prediction around how sellers will leverage marketplace to experiment with bottoms-up models, how marketplaces that fail to align incentives for sellers and buyers, ultimately will fail the launch.

John Jahnke:

Lastly, some thoughts around how the cloud marketplace will invest more in programs that create value for sellers and buyers to fuel the cloud marketplace flywheel. You can check out the report at tackle.io. We’ll share more data on all these predictions in the report. So I see some lively chat and a lot of calling for the deck, and we always listen to our customers. So we’ll figure something out, there.

John Jahnke:

We’re going to shift. Thank you for joining. Thank you for listening to the findings, and let’s dive into Q&A. So I’m going to scroll through any of the comments in the chat, but also feel free to use the Q&A box. All right.

John Jahnke:

So, does Tackle have any plans to assist ISVs with AMIs, data exchange and containers? Also, will Tackle support efforts outside of your SAS platform to manage marketplace businesses? So, it’s a broad question. We prioritize innovation based upon where sellers want to sell and how buyers want to buy. I think we’re in active evaluation with all other listing types, and we also see listing types evolving, as well as capabilities, by cloud, evolving. So, short answer is, yes, we have plans to do more of the sequencing of those plans over time are in development. There is some active experimentation taking place, and I’d say if you are interested in talking more about other listing types under your umbrella of marketplace, please reach out to your representative from Tackle, and we can engage in deeper conversations.

Sanjay Mehta:

Then there’s another question from another John, about the top seller’s journey slide and asking if we’re seeing a compression in the timeframe, now that the industry has a greater awareness. That is a definite yes. I think it’s driven by a couple of things, or maybe a few. The cloud providers themselves continue to do an amazing job in innovating around marketplaces and understanding seller behavior and seller workflow and channels and services, and everything else. So the platforms, themselves, are becoming more robust, and that robustness allows more and more vendors, particularly more established ones, to really consider how to leverage marketplace as part of that journey.

Sanjay Mehta:

I would also say that there’s just a better familiarity and tools and everything else around the process, and certainly Tackle sharing a lot about our journey there, and what we’ve learned. Then the buying dynamics is pretty awesome, I think. If you went back three or four years ago, or five years ago, I think there was a misperception that marketplace buyers were small businesses or Union businesses. Now, I think, with confidence, you can state that some of the biggest buyers on the planet, across the Americas, Europe, Asia, Australia, et cetera, are buying and leveraging marketplace-based purchasing, and when you see the convergence that we talked about, with a lot of budget shifting to cloud budget and the incentives the cloud providers are adding, you’ve kind of, got the perfect storm to speed things up.

Sanjay Mehta:

At Tackle, we see more and customers that come to us, that are ready to get it listed and they have a buyer or two or three on the hook. So there’s actually a lot of customer demand to help that timeline compress. Thanks for the question.

John Jahnke:

Now, we have a question from Megan, and I’m gonna read the question since I just learned, not everyone can see this. So, what trends are you seeing in public listing versus private offers? Are public listings becoming more discoverable for B2B buyers growing as a channel, vis a vis, private offers? I think this is an area… In one of our predictions we talked about how people experiment more with bottoms up. We have seen sellers have more success with public listings than trying to create packages that are more easily purchasable as a starting point, from a bottoms-up perspective. The majority of… And there’s some data in the full report that talks about private offers as a percentage.

John Jahnke:

The majority of sellers are still seeing the most success with private offers, but we do think, similar to how once buyers buy once, they get connected with the marketplace experience and how much easier it is. So that leads them to buy on a repeated basis, and a lot of that is private offered base today. But we think that continued repetition will build towards more organic purchases, over time. It’s still early in the organic movement, but I know all of the cloth providers are thinking about how to make the organic purchasing experience easier for their buyers which, in turn, will turn into that business coming online for sellers. Sanjay, any additional comments around that one?

Sanjay Mehta:

No, I think that’s all good. I was going to fire up another question from Noberto, who asks, “What are the key success factors for companies that have listed on marketplace, but have you seen new sales generated?” Again, I’d touch on a few points. The first is, I think all of us are getting better, or should be getting better at talking about how we’re solving customer problems, and not what our technology does. That’s really at the heart of cloud transformation and cloud movement, and I think, if you’re not seeing a lot of success. I’d first look and say, “Are you talking to the right buyer about how you’re solving the right problem?” And making that really clear. Then, you taking that message and seeing how that best fits with whatever cloud provider you’re trying to team up with, and finding your swim lane, if you will.

Sanjay Mehta:

Then, how are you promoting that success within that cloud provider to get that word out to generate more leads? Then I’d say, “How are you viewing that? What’s the team you’re putting around it? What’s the investment you’re putting around?” Cloud marketplaces are incredibly amazing ways to reach a lot of buyers, but there are also a lot of solutions, and you’ve got to distinguish yourself. I’d say you’ve got to distinguish yourself, starting with a very customer-centered approach.

John Jahnke:

So there’s a question about the $10 Billion of throughput, and if it includes any factor for the fees that the marketplace providers take. And it doesn’t. That’s like gross, kind of, marketplace volume projection. That doesn’t work with the fees. And the one thing that we do have in the predictions, some conversation around fees. The fee structure associated with marketplace cannot be erased to zero. There is clear value. Being able to tap into the cloud budget, the number one 82% of sellers, most of the people on this call who’d want to tap into cloud budget, that does come with some cost. I think we’re seeing this evolution of the fees associated with marketplaces, and all the clouds are trying to figure out what’s the mix of value for the buyers, mix the value for the sellers, and then what does it cost them to execute on a marketplace program at scale? You’ll see that fees normalize over time.

John Jahnke:

If you follow Microsoft, they made a pretty announcement at INSPIRE this year, lowering their fees pretty aggressively, and I think we’ll continue to see evolution in fees, but we didn’t specifically account for that in that $10 Billion estimate.

Sanjay Mehta:

Another question coming in about, “Do these percentages in the report apply to federal government adoption of marketplace usage?” Good question, and certainly an evolving area, and the GS came out. I think it was earlier this year, and put some requirements placed around consumption-based licensing, and really paying for what you use. So I think that the trend towards that is one we’ll see develop more and more over the coming years, I think. But, specifically to the report, certainly a lot of the survey respondents on the seller’s side sell to both the commercial sector and the private sector. So there’s certainly a flavor of that in there. Frankly, the buyer side of the equation is much more commercially weighted. So we don’t specifically address federal this year, but might be an interesting area to look at, as that market materializes a bit more in ’22 and beyond.

John Jahnke:

There’s a question around the percentage bias fees you work with, who are chartering. Gradient has been one cloud marketplace versus dedicating a partnership to just one odd vendor. I’d say Sanjay commented a bit about this like, “Who is your buyer? And “How do they want to buy?” and “Why?” And I think how does your product align with the clouds from a value standpoint, ultimately as creating value for your buyer? I think those question will lead you to answers around what your cloud strategy is. We helped our sellers bring their cloud strategy to life, and there are requirements for all the marketplaces that vary slightly that, between a seller and a cloud provider you have to work through, to be able to sell in multiple marketplaces. We do see sellers, who start with one, discover buyers who want to buy their places. But then they have to work through their product strategy to see how to actually make that come to life. That’s a complicated question. I tried to simplify that. Sanjay, any comments from you on that one?

Sanjay Mehta:

Yeah, I would just say be buyer obsessed. Selling your stuff where buyers want to buy it, and that evolution’ll continue, and also appreciate that the more you lean in, there’s certainly some trade-offs. The more you lean in, the more you get out of it. So, I would be really intentional about where you make your investments and there are sales considerations and relationship considerations and product considerations. So just know why you’re investing and where you’re investing.

John Jahnke:

All right. The flow of questions is slowing down. So people have some other questions, feel free to put them in there. We have a resources slide. We’ll maybe go to our resources slide now, Erica. So, thank you, again, for joining, for taking part in the research. The participation in the survey is key to us being able to bring these insights to life, and we look forward to, hopefully, everyone participating in it on an annual basis. The State of the Cloud Report is there. There will be links to that. They’ll be on our website. I think Jason’s sharing them in the chat so people don’t have to type down the Bitly link.

John Jahnke:

Next month, we’re going to do another webinar around the predictions, specifically, and a bit more on marketplace longterm. Feel free to… I think everyone knows. We publish a lot of content around seller success. We’re seller obsessed, and we’re constantly trying to think about how to help our sellers succeed faster in that greater scale. Follow Tackle on LinkedIn and you’ll get the latest content. Feel free to reach to Sanjay and I. We’re here to help anyway we can. And, as I said, earlier in the report, there’s a ton of great analyst coverage. We’ll share some links that a recent report from Canalys and Forrester. Jay McBain published a ton about marketplace. Gartner and IVC are all doing more in this area.

John Jahnke:

I’m not seeing any other questions. So we’ll give everyone 15 minutes of their day back. Thank you, again, and thanks to Erica and the entire Tackle team. We did so much work to bring this to life, and we look forward to seeing you all again.

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