How AI Rewires Partnerships & VC's 6-Step Cloud GTM Formula
Hi, it's Roman and welcome back to the Partner Insight newsletter!
Ready to discover how AI is rewiring partnership strategies and creating new GTM playbooks? Today I've brought exclusive insights from two incredible tech industry leaders.
If you're curious about where the money is in Gen AI, I'm breaking down the top 10 earners, dominated by hyperscalers and their partners. Finally, I'm sharing a 6-step Cloud GTM playbook from a top VC investor, used by companies in their portfolio.
Want to master cloud marketplaces yourself? Learn to apply these strategies in our Cloud GTM Leader Course starting Sept 10th. Scroll down for a special offer as we celebrate 1 year of the course - don't miss out!
AI Partnerships Rewired: Strategies for the Future
AI isn’t just changing partnerships, it creates new GTM playbooks. We discussed them with two incredible leaders, Avanish Sahai (ex-Google Cloud, ServiceNow) and Bader Hamdan (Ecosystem Chief at Vectara):
How are $370Bn in cloud commitments reshaping the tech ecosystem?
How is AI creating billions in new service revenue?
What are the challenges and opportunities in AI implementations?
How will this change the role of alliance leaders? And more
In our new episode on “How AI is changing Cloud GTM and partnership playbooks?” I had the pleasure to host:
Avanish Sahai, board member, top executive, and early employee of many iconic software companies. He has served as CVP at Google Cloud, Global VP at ServiceNow, Global VP at Salesforce.
Bader Hamdan, the Ecosystem Chief at Vectara, who previously was VP at Twilio, and Global Head, Strategic Technology Partnerships at Google Cloud.
Here are the top insights from our discussion that may reshape your partnership strategy:
AI is challenging the single-stack approach
Avanish explained that AI is changing the technology game as “you start moving away from a completely fully verticalized single stack to really bringing different sets of data, different set of workflows.”
For this to work together seamlessly, companies need to figure out how to unify and leverage their internal data and data that sits in their partners, customers, and suppliers.
AI will enable precise GTM targeting
AI is not just changing how tech works, it has potential to unlock precision targeting and new go-to-market strategies. Avanish highlights,
"The second implication is more on the go-to-market side... how can AI help partnership teams work with their own sales teams, work with their partners and ecosystems to build better, you know, better targeting, better alignment? So using data and …better models to bring insights into, hey, here's the type of accounts or customers or prospects or opportunities that we need to go pursue."
85% of enterprise AI data is on-prem, making it the new battleground.
As AI drives cloud commitments to nearly $370Bn, hyperscalers have a distinct advantage as the access point for these large commits and consumption patterns.
However, most of enterprise data is still not on the cloud. Bader emphasizes,
"85% of the enterprise data that really matters for Gen AI is sitting on-prem, right? So on-prem is going to be sexy again in this Gen AI era."
Services companies are seeing an AI gold rush
Avanish highlighted:
"If you look at some recent announcements from BCG or McKinsey, etc., they're saying 30 to 40% of their projects now are about AI. Those numbers are staggering. BCG, I think annual revenues are about 12 billion, and if it is 30 percent, they're doing three to four billion dollars kind of from scratch."
Customers expect tech stack integration in the ecosystem
Bader notes that customers expect the AI stack that they use to integrate seamlessly, which requires partnerships “to come together and connect the dots in the right way.”
While hyperscalers are emerging as the key orchestrators of the AI ecosystem, alliance leaders must become orchestrators in their own right to thrive in this new era.
Bader advised alliance leaders:
"it's about the ecosystem in this market, in this specific tech stack. It's about connecting the dots. You have to be the orchestrator to unleash the art of possible engine AI via that ecosystem. Honestly, this is a role that we have to play”
However, building an ecosystem doesn’t mean losing focus on the customer and key solutions. Avanish underscored the need to pick winners who will build them:
“…picking winners, and there was always hesitation to do that. Hey, if I'm a platform, I want an open ecosystem, and I want everybody to come, and may a thousand flowers bloom and all that.
The reality is, again, customers are looking for solutions. And I think one of the changes that's going to happen is going to be some selection of a smaller number of partners who kind of come together and build either industry solutions or some more specific horizontal solutions, where the orchestrator has, in fact, identified one or two or three key players. …Some hyperscalers, I think, are starting to do that. They're doing that with some of the key technology partnerships and some of the application partnerships and so on."
AI is fundamentally rewiring partnership strategies.
Alliance leaders who master these new playbooks will get ahead in the age of AI. Are you changing how you operate?
💡 Enroll in Cloud GTM Leader Course
Join Cohort 7th of our 5-week cohort course starting on September 10th and accelerate your growth via Azure, AWS, and Google Cloud cloud marketplaces with 10+ leading experts in a community of exceptional alliance leaders.
As we celebrate the 1-year course anniversary I’m offering a special discount. Use RKNl@1Y48h code for our newsletter subscribers to get $50 off, if you register in the next 48h.
6 Step Cloud GTM Playbook from Top VC Investor
“Channel leaders are turning their attention to cloud marketplaces as the future of partnerships,” reports a top VC/investor managing $83.5Bn.
Here's what you need to know to succeed in Cloud GTM
A recent ICONIQ Capital study on SaaS GTM 2024 reveals that a staggering 47% of software companies are using marketplaces of Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.
But navigating these hyperscaler ecosystems can be challenging.
Here are 6 crucial lessons for succeeding in cloud marketplaces, based on insights from companies like Drata and Glean:
Start from the customer
Don't just default to your cloud provider - consider which marketplace best reaches your ideal customers
Infrastructure & security companies often prioritize AWS for its strong CIO/CISO relationships
Application software companies targeting CFOs or revenue buyers often favor Azure given Microsoft's strong ties in those areas
Analyze your ICP and map it to the hyperscaler with the best connections to it
Master one marketplace first
Resist the temptation to pursue multiple marketplaces at once
Focus on building a strong, predictable revenue stream with one marketplace before expanding
Develop a scalable partner enablement program to set the stage for future expansion
Once a successful playbook is ready, "companies tend to move towards a multi-marketplace approach by selling through 2-3 marketplaces at the same time.“
Tap into your network
Startups can leverage VC connections to get on the radar of hyperscalers if they lack established relationships
Learn from operators and companies who have successfully navigated these marketplaces. Don't hesitate to ask for help
Cultivate insider relationships
Treat marketplace partnerships like enterprise sales - identify and build relationships with key decision-makers
Hire team members with experience and existing relationships in your target hyperscalers
Multi-thread within the organization, connecting with partner reps and other key stakeholders
Invest time in becoming an "insider" to gain visibility and advocacy within the marketplace ecosystem
Invest in operational readiness
Dedicate 1-2 people early to operations, billing, and marketplace backend- don't wait until you're overwhelmed
Marketplace billing is nuanced and may require separate systems /processes
Implement a CRM lead sharing and revenue attribution for partner-sourced and partner-involved deals
Enable partners like your own sales team
Train cloud partners on your ICP, product features, use cases, and messaging - just like you would train a new sales hire
Repurpose existing sales enablement, customer success, and onboarding resources
For complex products, leverage solutions architects and sales engineers for hands-on technical enablement
Top 10 AI Earners: Hyperscalers Dominate
Where's the money 💰 in Gen AI today? Just look at the top earners - 6 out of 10 are either hyperscalers or their partners, with Microsoft Azure ($3.9B ARR) and OpenAI ($3.4B) leading the pack.
But it's not just about revenue
Generative AI could be a game-changer for operational efficiency
In the recent earnings call, Microsoft claimed "hundreds of millions" in customer support savings, while Amazon highlighted "$260 million and 4,500 developer years" saved in code migration.
As more companies lean into Gen AI, expect to see similar efficiency gains in the key areas where AI is already good enough.
What's the takeaway for the tech ecosystem?
Partnering with hyperscalers could be the key to hypergrowth.
Top clouds are fighting for dominance and becoming the de facto orchestrators of the AI ecosystem.
Despite market fluctuations, hyperscalers remain all-in on AI infrastructure.
Amazon's Andy Jassy put it bluntly: "while we're investing a significant amount in the AI space and infrastructure, we would like to have more capacity than we already have today."
Hyperscalers’ commitment to (over?) building will enhance access and reduce costs for everyone.
For partners, aligning with hyperscalers can unlock client access, resources, and growth opportunities.
Because of their central role, making it simple to buy, customer trust and (importantly) cloud commitments, customers will gravitate to them for deploying cutting-edge enterprise AI applications.
At the same time, hyperscalers are actively searching for new AI products to plug into their platforms to serve incredible customer demand in AI.
That’s why 47% of SaaS companies leverage cloud marketplaces - more on this later.
Beyond hyperscalers
The AI ecosystem is diversifying. Sapphire Ventures recently stressed "a broadening of categories with GenAI products at $25M, $50M, and $100M+ scale."
From coding copilots to marketing copy generators, AI is quietly transforming industries.
But let's not get carried away by the hype
Today, inflated expectations are giving way to the realities of technology deployment timelines.
Shipping AI products is difficult regardless of the layer of the tech stack.
Patience is still required for the overall deployment of generative AI.
🤝 Aligning with hyperscalers is a smart play in AI today, because this is where customers' hearts and wallets are.
If you agree, check 5 steps to get you going in cloud GTM (link in comments).
Still, cloud marketplaces aren’t the only path to win.
The question is, how will you position yourself to ride the Gen AI wave to follow the customer and without getting swept away by the hype?
Celebrating 1Y in Cloud GTM, launching Cohort 7
120+ alumni. 40+ incredible expert speakers - in just one year Cloud GTM Leader course has become the go-to program to unlock cloud marketplace growth.
When we announced it last August, few expected us to grow to over 120 alumni from industry leaders like GitLab, Citrix, and IDC. Here is how it’s transforming alliance leader careers.
As we gear up for Cohort 7 starting on Sept 10th, I'm blown away by the incredible journey we've been on together.
🏆 Recently Jay McBain from Canalys even recognized us as a Top Education and Training Program for Channel and Partnership professionals!
So what made the course so impactful?
💡 We asked our alums, and here's what they said:
"The highlight was the curation of the speakers and how they organized the information, they were clear and didactic."
"Meeting the plethora of expertise that have been at the very forefront of Cloud Marketplaces."
🎯 From VPs of Partners of the Year to alliance leaders with decades of cloud GTM experience, 40+ outstanding expert speakers delivered unique insights in our course sessions.
Rolf Heimes, Jonathan Kingsepp, Brian Laing, Mike Marzano, Rick Buijserd, Darren Sharpe, Subhash Jawahrani, Kate Kwiatkowski, Abhijit Madhugiri, Alex Balcanquall the list goes on.
But it wasn't just the caliber of the speakers that made the difference. It was the "Structured and Methodical approach to unbundle the complex process of partner enablement/Cloud GTM/Cloud Marketplaces."
Our alums highlighted the "open discussion with peers from different business functions and companies covering SaaS, Cybersecurity and Hyperscalers." They loved the "tactical elements and the measurement tools to measure progress."
"People with real experience sharing the how - how did they win, how did they fail, how did they tackle challenge x or y."
While 5-week curriculum proved to be very successful, it’s not just in-session experience.
The journey continues long after the course
Our Cross-Community Masterminds are yet another testaments to the incredible energy and insights of our community. The high-energy discussion and probing questions turned it into a forum for the community to truly help in Cloud GTM each other and build lasting connections.
Join Cohort 7️⃣: Special 1Y anniversary referral
If you're ready to take your cloud marketplace game to the next level, I invite you to join us for Cohort 7. As a special celebration of our 1-year anniversary, I'm offering a $50 discount for the next 48 hours.
Use code RKNl@1Y48h at the enroll page:
But don't wait - spots are filling up fast. Is your company ready to unlock the full potential of cloud marketplaces?