Marketplace Momentum: 51% Buyer Adoption & Google Cloud Unlocks Channel Play
Hi, it's Roman and welcome back to the Partner Insight newsletter!
This week brings compelling evidence of a fundamental shift in marketplace adoption by enterprise buyers, with implications that cloud alliance leaders can't ignore.
From Google Cloud's strategic move to enable channel partners on its marketplace to the art of crafting impactful win wires, we'll explore how the convergence of marketplaces and partnerships is creating new growth opportunities.
Let's discuss how to take advantage of these trends.
Cloud Marketplaces Hit Tipping Point: Enterprise SaaS Sales New Frontier
Data reveals cloud marketplaces are now mainstream. Over half of cloud customers use them, reshaping how enterprise software is bought and sold.
What's driving this shift in buyer behavior and how should alliance leaders adapt?
A comprehensive study by Ofcom of Amazon Web Services (AWS), Microsoft Azure, and Google Cloud marketplaces found:
51% of cloud users reported using marketplaces
Adoption jumps to 74% for early tech adopters and 71% for multi-cloud users
Staggering 82% of recent cloud switchers use marketplaces
The top 3 reasons why customers use cloud marketplaces:
Simplification is key:
64% of marketplace users cite consolidated billing as their primary reason for adoption. In a world of complex cloud purchases, the ability to streamline them is a major draw.
One-stop shop appeal:
56% of users leverage marketplaces to purchase the cloud provider's own products. This integration of first-party and third-party offerings creates a seamless buying experience.
Discovery engine:
50% turn to marketplaces for research and to discover new services. This shows the evolution from transaction platforms to product discovery hubs, reshaping software sales.
While 25% of marketplace users buy third-party products, this figure climbs significantly for:
31% for large enterprises (2500+ employees)
40% for public sector organizations
Larger enterprises and public sector organizations are leading the charge in purchasing third-party products through marketplaces.
The Committed Spend Factor
Beyond convenience, the "committed spend" again emerges as a key driver.
“A survey of cloud customers and ISVs found that drawing down committed spend was the most common reason for customers to use the hyperscalers’ marketplaces.”
This financial incentive is creating a powerful flywheel effect, attracting more buyers and sellers over time.
What it means for ISVs:
Marketplaces offer access to customers with pre-committed cloud spend, potentially lowering customer acquisition costs and accelerating sales cycles.
It's no surprise that accessing these commitments ranks among the top reasons ISVs list their products on marketplaces.
The bottom line:
The marketplace revolution is well underway. These adoption numbers from last year are likely even higher now, given the explosive >80% annual growth rate of marketplaces reported by Canalys.
If you're not optimizing your strategy for marketplaces, you're potentially leaving money on the table and giving your listed competitors a significant advantage.
💡 Enroll in Cloud GTM Leader Course - Final Cohort of 2024
Join Cohort 8th of our 5-week cohort course starting on October 29th and accelerate your growth via Azure, AWS, and Google Cloud cloud marketplaces with 10+ leading experts in a community of exceptional alliance leaders.
It's the last chance this year to gain the strategies that will position you for success in 2025 and beyond.
How ISVs can scale revenue on Google Cloud Marketplace with Partners.
Google Cloud recently unlocked a massive opportunity for channel partners on its marketplace, enabling them to potentially drive billions in ISVs transactions - stressed Brian Stavis in our course.
Brian Stavis, who is focused on Resell Strategic Initiatives at Google Cloud Marketplace, highlighted recent research showing that 50% of the marketplace revenue is expected to flow through channel partners by 2027.
Brian joined our Cloud GTM Leader course session to explain recent Google Cloud innovations on its marketplaces for Channel Partners.
He revealed why this might be the most underappreciated opportunity in Cloud GTM.
The Evolution of Marketplace Models
The initial marketplace model was straightforward: ISVs transacting directly with customers.
Recently, Google Cloud has made a crucial shift: "We've gotten into this stage of how do we drive and allow channel partners to lead the transaction?" explains Stavis.
What’s the significance?
Channel partners aren't just another route to market - they're creating "mini flywheels within the big flywheel" in cloud marketplaces.
Partners bring:
Regional expansion opportunities
Distribution networks
Existing customer relationships
Specialized industry expertise
How Google's Recent Move is Different from others
The new GCP marketplace channel private offers enables:
Partner-level granular discounting
Channel partners as billing owners
End-to-end partner invoicing and collections
Top-line revenue recognition for partners
Importantly, partners can now be "the partner of record," differentiating Google's approach.
Real Impact on Deal Sizes
In just ~6 months since launch, the data is compelling.
In one healthcare case, channel partner involvement transformed "a high seven, eight-figure deal to a nine-figure deal."
Why? Partners enabled bundling of software, services, and first-party cloud services.
Engage Partners First, then move them to Marketplace
A crucial insight from Stavis that caught my attention:
"A lot of ISVs make a misstep thinking, 'I'm going to get listed on marketplace and all the channel partners are going to come.'"
Instead, successful companies build on existing channel partnerships first, using marketplace as "the cherry on top."
Here's what makes you think:
Is the real marketplace growth strategy not about the marketplace itself, but about how well you can leverage your channel ecosystem through it?
5 Win Wire Secrets: How Top Cloud Partners Cut Through the Noise
Are your win wires falling flat? Here's how to make them resonate with hyperscalers and drive real momentum in partnerships.
Win wires, once a powerful tool for showcasing cloud marketplace success to hyperscalers, have become crowded.
But in our course, Daniel Roppert, Channel & Alliances Leader - Central Europe at Wiz, who previously scaled Okta's Cloud GTM in EMEA, shared a fresh approach to reignite their impact.
First, why are win wires your strategic leverage in Cloud GTM:
✔️ Visibility at scale - your win could reach far beyond your immediate contacts.
✔️ Differentiation in a crowded field - they help you rise above the noise in cloud marketplaces.
✔️ Strategic alignment showcase - they're your chance to demonstrate how you're advancing your cloud partner's key initiatives.
However, Roppert notes, "Win wires became a bit of a crowded space. At first, every big win with AWS or your hyperscaler, they just go, 'hey, send that out.'" As volume grows, hyperscaler teams start cascading that a bit more.
The key? Quality over quantity. Roppert advises considering a shift to a monthly cadence as you scale, focusing only on truly standout wins.
But what makes a win wire stand out?
1️⃣ Uniqueness trumps size
While large deals help, they're not always the most compelling. Roppert emphasizes, "There's always a big ISV out there that has done bigger deals." Instead, focus on what makes your win unique – perhaps it's a Greenfield account for a hyperscaler or involves cutting-edge GenAI applications.
2️⃣ Align with hyperscaler priorities
Pay attention to what your cloud partners are focusing on. For Roppert's team, their first CPPO (Channel Partner Private Offer) deal was a big win because it addressed a key topic identified in hyperscaler QBRs.
"Make that really memorable and relevant," Daniel advises.
3️⃣ Verticalize your messaging
Roppert points out that "the hyperscalers are heavily verticalized," while many ISVs are not verticalized early on. Tailoring your win wires to specific industry verticals can significantly increase their impact, especially when shared with the right leaders.
4️⃣ Internal amplification
Don't overlook the power of these stories within your own organization. Sharing select, impactful win wires internally can boost morale and align your teams around cloud partnership success.
5️⃣ Think beyond the deal
Sometimes, it's not just about the sale.
Daniel suggests highlighting wins that demonstrate your strategic alignment with the hyperscaler's goals or showcase innovative uses of their technology.
By reimagining your approach to win wires, you can cut through the noise and truly capture the attention of your cloud partners.
Unlock Cloud Marketplaces: Join Cohort 8
With our final Cloud GTM Leader course cohort of 2024 starting in less than a week, I've been reflecting on the past year. Our programs have welcomed 150+ alumni from industry leaders like GitLab, Citrix, and IDC, and featured nearly 50 incredible expert speakers and mentors.
Jay McBain from Canalys recognized it as a Top Education and Training Program for Channel and Partnership professionals. What makes our course so impactful?
We asked our alums, and here's what they said:
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”
From VPs of Partners of the Year to alliance leaders with decades of cloud GTM experience, 50 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.
Results have been rapid
Many of our alumni cracked the code of cloud marketplaces, generating significant traction. Here is just one of many stories: $0 to $200K+ revenue in cloud marketplaces in 8 weeks.
The journey continues long after the course
Our Masterminds are yet another testaments to the incredible 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.
🎯 If you're ready to accelerate your cloud GTM growth, join us for Cohort 8️⃣ starting October 29th.
It's the last chance this year to gain the strategies that will position you for success in 2025 and beyond.
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