Playbook
GTM Playbooks
How GitGuardian Leverages Data and GitHub to Fuel Its Growth
Read more
This post, written by François Dufour, is part of our series on Growth Playbooks. There, leaders who have built successful businesses share their playbooks for marketing and selling to software development teams.
When a few of our portfolio companies asked for pointers on whether and how they should sell their software on Cloud Marketplaces, I contacted an expert: John Jahnke, CEO of Tackle. Tackle is built to help businesses like New Relic, PagerDuty, Fastly, Auth0, and others sell on the Cloud Marketplaces (CMP) of AWS, Microsoft Azure, and Google Cloud Platform. John was gracious enough to share some of his great expertise. You can also read more in Tackle’s own playbook or in their 2021 State of Cloud Marketplaces Report. There, for instance, you will read that buyers distributed their Marketplace purchases among the big three as follows in 2021 (they were able to select more than one Marketplace so the total is more than 100%):
Reason #1: Leverage Committed Cloud Spend
“The reason why people prioritize the Marketplace today is that the Cloud budget is the number one growing budget line item in almost every company.”
Cloud customers typically commit a large budget line to their Cloud expenses. Since actual Cloud expenses can vary greatly vs. the initial committed budget, the remaining committed budget can be used to buy software and other cloud services on the same bill, through the Cloud Marketplaces. That creates an incentive to buy from vendors listed on the Cloud Marketplace before buying from others, all things being equal.
For example, let’s say a customer has a committed budget to purchase compute and storage from AWS, Azure, or GCP. Using the same budget they set aside for those Cloud solutions, that customer can also purchase additional third-party software like server monitoring tools on that Cloud Marketplace, all without requiring further approval from their finance team typically.
Reason #2: Contract and Procurement Facilitation
Instead of building out complex compliance and contract flows yourself, you can stand on the shoulders of giants.
“It’s much easier to draft a contract under the umbrella of the Cloud Provider”
When a seller decides to get listed and start selling through the Marketplace, they can take advantage of their buyers' existing contracts on that cloud platform.
The lion's share of the dollars flowing through Cloud Marketplaces follows something called a private offer or private plan motion. There, you use the financial and contractual infrastructure of the cloud, but pass custom pricing and terms to an individual buyer, which looks more like a custom contract.
You can use a very lightweight contract type inside a Marketplace, that buyers can just click through and accept. That just saves a lot of time, as people get more comfortable with the Cloud Marketplaces and their contracts.
Reason #3: More Opportunities to Co-Sell
When you gain momentum on a Cloud Marketplace, it doesn’t go unnoticed. Sales Reps at the Cloud Marketplace get a cut of the revenue you generate on their platform. When you achieve a certain amount of success, the Cloud Provider might recognize that you’re making its customers successful and register you as a preferred provider. They are then more likely to help sell your product to their customers.
Given these three reasons, 45% of Forbes’ Cloud 100 companies are now active Marketplace sellers. And customers who buy once on a Cloud Marketplace are likely to come back and do it again.
Cloud Marketplaces are great for procurement, not for browsing and organic discovery.
You still need to do the legwork to get your product known and brand recognized. That means that yes, you still need to create your own content, work on your SEO, campaigns, events, ads, G2 reviews, and more.
The simplest rule of thumb is whether a prospect has ever asked you: can I buy it through my existing Cloud budget?
Before you can sell on AWS, Microsoft, or Google’s Cloud Marketplace, you need to be an official partner. So first, navigate your way into the partnership program. The types of partner programs are now more diverse than ever before.
Most Marketplaces have incentives geared towards businesses that use their platform. For example, AWS has an ISV Accelerate Program for ISVs built on AWS who want to go to market with Amazon. Companies that join that program receive help from their Partner Network which can assist with their Marketplace strategy.
Partnerships don’t just happen. But when your business successfully strikes deals with customers, shows a pattern, and builds a narrative of success, you’re in a prime position for a partnership.
For example, AWS has a program called ACE, with a process where you register an opportunity in order to discover who at Amazon is the seller to your prospective buyer. Then, you can engage with them and get help. That doesn’t mean they’ll orchestrate or seal the deal for you, but they’ll help you understand and navigate the target customer because they know the customer dynamics, their contracts, and their budgets. Azure offers something similar in their Partner Center.
The Marketplace Fee
When you’re getting value, there is a cost, like with any other channel. Different Marketplaces have different fees based on your commitment type, but be sure to check for them.
There are different fee structures traditionally, for initial purchase and renewals. Renewals fees tend to be less than others.
Microsoft just lowered their Marketplace selling fees from 20% to 3% across the board. And in Sep 2021, GCP followed in their footsteps.
Still, as a seller on those Marketplaces, the fee is worth the upside of accessing cloud budgets and buyers.
The Marketplace Integration
Your business is one complex ecosystem. The Marketplace you sell on is another. Tying the two together is no easy feat. There are APIs you need to build, others you need to integrate with, and data pipelines you need to build that can send vital metrics to and from the Marketplace and your own business.
This work can be nuanced and complex. But, investing in building the proverbial plumbing between your business and the Marketplace is necessary. Tackle can help you with that.
So what are the types of buyers you will find on these Marketplaces?
The most common persona you will find there is an economic buyer. This is likely the technical budget owner for Cloud. They could be primarily shopping for infrastructure tools, security, or DevOps.
That primary buyer is likely shopping in one of the following verticals:
But we are seeing more and more verticals represent significant areas of spend after these leading ones.
When a technical buyer shops around, they’re looking to start quickly. Developers, security professionals, or data scientists, for example, likely already know they want to use your product and wouldn’t need a free trial. They simply want to be able to bill this towards their Cloud budget and start building right away.
We’re also seeing more and more buyers beyond these technical personas on these Marketplaces: Tackle’s State of Cloud Marketplaces survey saw that 58% of respondents with roles in marketing, sales, and operations said they had purchased software through a Cloud Marketplace in the last year, compared to 38% in 2020.
#1 Not Having A Plan to MARKET OR Sell
As stated above, the Marketplace will not market or sell your product by itself. People hope it will happen there through organic discovery. It just doesn’t. So build up your foundational Marketing and Sales motions.
#2 Not Thinking of Scale
Channel or Partner teams should not tackle this alone. The most successful sellers invest in marketers and sales bandwidth to supercharge their Go-to-Market strategy because co-selling is a team sport. It takes marketers to raise awareness, salespeople to close deals, and sales engineers to keep everything running smoothly. You need to think about your Cloud Marketplace efforts as part of a cross-functional campaign and ensure you have the workflows in place for different parts of your team to work together seamlessly.
#3 Overthinking It
When it comes to Cloud Marketplaces you want to avoid trying to boil the ocean.
Don’t try to tackle all 3 Marketplaces at the same time. You would end up overwhelmed with the task. Start by identifying what your unique value prop is. Then, pick the Marketplace that’s best suited to that value prop and Ideal Customer Profile’s stack.
Also, don’t try to automate everything either from the beginning. Get started simply and learn from that.
So go ahead, dive in and happy Marketplace selling!
.png)
