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Sapphire Ventures: The Startup's Guide to Cloud Marketplaces

Companies are rapidly shifting workloads to cloud providers such as Google Cloud Platform, Amazon Web Services, and Microsoft Azure. As companies move their infrastructure to the cloud they’re allocating larger percentages of their IT budget to an annual enterprise agreement with cloud providers and utilizing those commitments to procure software and technology through cloud marketplaces.

SaaS Startups that successfully leverage cloud marketplaces as part of their GTM strategy can increase opportunity flow, accelerate deal velocity, reduce procurement complexity, and increase deal size. While the benefits of cloud marketplaces can be enormous, it’s a new and nascent channel for most startups and their revenue leaders.

To help startups, CEOs, and GTM leaders navigate and identify ways to leverage cloud marketplaces Sapphire Ventures created an e-book guide.

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Sapphire Ventures: The Startup's Guide to Cloud Marketplaces

  1. 1. 1 The Startup’s Guide to Cloud Marketplaces: How to Get Started and Drive Revenue With Cloud Marketplaces
  2. 2. 2 Introduction The Startup’s Guide to Getting Started and Driving Revenue with Cloud Marketplaces Sapphire Ventures invests in companies of consequence that have the potential to transform the enterprise technology landscape. For more than a decade, we have witnessed not only technology innovation, but also the evolution of how companies market their solutions. Over the last several years, three major themes have emerged when it comes to distributing products and solutions: • A proliferation in ways to sell SaaS and enterprise technologies • Cloud marketplaces emergence as a channel to accelerate sales and procurement processes for enterprise buyers • The need for c-level executives to better understand cloud marketplaces and operationalize a cloud marketplace strategy After reviewing volumes of cloud-vendor documentation and conducting 20 interviews with channel and cloud marketplace leaders, Sapphire Ventures has developed The Startup’s Guide to Cloud Marketplaces. This e-book is intended to help startup leaders: 1. Decide whether their company should sell through a cloud marketplace 2. Determine which cloud marketplace(s) to sell through 3. Provide best practices on how to sell through cloud marketplaces effectively Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  3. 3. 3 5 Steps to Getting Started with Cloud Marketplace Assess your company’s go-to-market motion to identify whether a cloud marketplace strategy would be a useful GTM channel. Secure internal C-level commitment to properly manage channel expectations and benefits, and to ensure success. Cloud marketplaces help companies shorten sales cycle, improve buyer confidence, and facilitate predictable payments on contracts. Align a cross-functional team to set-up, operationalize, and execute on a cloud marketplace strategy. Enable your direct sellers on the benefits of selling through cloud marketplace and to cloud sellers on the superiority of a joint go-to-market value proposition. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  4. 4. 4 The Value of Marketplaces Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  5. 5. 5 The Buyer’s Journey is Becoming Predominately Digital From Awareness to Procurement: Software Consumption Habits are Changing The Next Frontier of SaaS Sales Digitization: AWARENESS INTENT PROCUREMENT 71% reach vendor selection after a digital journey2 By 2023, 17% of the $I3T US B2B procurement market will be via ecommerce3 60% of the buyer journey is digital1 Sources: 1, 2 Forrester SiriusDecisions: Welcome To The B2B Marketing Renaissance 3 Forrester SiriusDecisions: What I See Coming For The Channel In 2020 Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  6. 6. 6 The Buyer’s Journey is Becoming Predominately Digital From Awareness to Procurement: Software Consumption Habits are Changing 4 Source: McKinsey B2B Decision-Maker Pulse Survey April 2020 COVID-19 has accelerated digital sale engagements Before COVID-19 47 53 65 35 April 28 Before COVID-19 April 9 48 52 66 34 Traditional Digital Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success Importance of digital vs traditional to B2B buyers themselves4
  7. 7. 7 Marketplaces are Changing Software Sales The Landscape is Expanding in Size and Influence on Software Sales Lead Marketplaces Owner: Marketing Funnel Impact: Top Benefit: Lead Generator Key Activity: Review & Content Management Cloud Marketplaces Owner: Business Development Funnel Impact: Bottom Benefit: Procurement Mechanism Key Activity: Sales Enablement, Marketing & Technical Integrations Product Marketplaces Owner: Business Development Funnel Impact: Top and Bottom Benefit: Platform/Product Association Key Activity: Marketing & Technical Integration Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  8. 8. 8 Growth isAccelerating for Cloud Marketplaces Software is Being Delivered, Utilized, and Procured through the Cloud 1st Wave - 1990s 2nd Wave- 2010s 3rd Wave- 2020s Software vendors develop and deliver technologies in the cloud. Enterprises move infrastructure to the cloud. Technologies are procured and billed via the cloud. 290,000 Active Customers on AWS’s Marketplace5 1.5M Subscriptions Transacted on AWS’s Marketplace6 4M+ Monthly Active Users on Azure’s Marketplace7 8,786 Total Software Vendors on Azure Marketplace7 3x Increase in SaaS Sales in 2020 on Google Cloud Marketplace Sources: 5, 6 AWS re:Invent 2019: How to Sell on AWS Marketplace (GPSMP202) 7 Microsoft Inspire2020 Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  9. 9. 9 WhatAre Cloud Marketplaces? Software is Being Delivered, Utilized, and Procured through the Cloud Cloud Marketplaces are Less Like… And more like… • Little go-tomarket investment beyond listing • No-to-low direct sales engagement • Demand is mostly inbound • Primary channel for generating revenue • Reduces buying friction • Improves procurement and payment processes • Not treated as a lead generation tool • Provides confidence and trust to buyers to transact with merchants Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  10. 10. 10 In your early days on a cloud marketplace, make sure to leverage it as a transaction mechanism to accelerate large deals. Large Transaction Fulfillment Early deal success on the marketplace will validate the marketplace fit for your company and foster excitement from customers, your direct sellers, and cloud providers on the value you bring to the cloud marketplace. Engagement Success and evangelization will help broaden exposure with cloud sellers and customers, which will accelerate inbound opportunities from the marketplace. High Velocity Transactions Marketplace Trend: With the advent of COVID companies have seen an uptick in the utilization of their free trials and inbound customer interest to their listing. We started at the top with incredibly large transactions and then moved to incredibly small transactions and now we are eating our way towards to the middle.” Colleen Kapase WW Partner Alliances at Snowflake The Typical Marketplace SellerJourney Start with Large Transactions to Validate Success and Yield Future Inbound Activity Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  11. 11. 11 Benefits to Cloud Marketplace Software Vendors Cloud Marketplaces Increase Reach and Reduce Friction for Sellers When listing on a cloud marketplace, your solution gains instant global scale. Listings can be made visible globally, including in Europe and Asia. Transactions on marketplaces are paid by the respective cloud vendor, so you can confidently expect to receive timely payment on your marketplace contracts. Tap into annually budgeted IT spend for cloud providers, which can circumvent the need for buyers to identify new budget for your solution. Joining marketplaces assures customers that you are adhering to the cloud providers' technical best practices, and that your product meets their security standards. 8 CrowdStrike Holdings Inc (CRWD) Q1 2021 Earnings Call Transcript Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success CEO PERSPECTIVE “We've got a great partnership with AWS. It cuts the sales cycle down when we use the AWS marketplace by almost 50%. And just a quick stat from an ARR perspective, in Q1 we were up 32% quarter-over-quarter with our AWS marketplace deal.” George Kurtz — CEO of Crowdstrike8 ACCESS TO LARGE COMMITTED IT SPEND BUYER CONFIDENCE INSTANT GLOBAL REACH REVENUE RELIABILITY
  12. 12. 12 Benefits to Cloud Marketplace Software Buyers Cloud Marketplaces Simplify Purchasing for Enterprises 1 in 3 Chief Procurement Officers9 say that vendor consolidation is the largest organizational initiative over the next year. Cloud marketplaces help companies consolidate their billing for software from multiple vendors under their cloud provider’s line item. Marketplaces simplify procurement processes at companies enabling employees to buy and try software with less friction. By consolidating spend, procurement can unlock larger discounts from cloud service providers, which incentivize further spend on cloud marketplaces. CIO PERSPECTIVE ”By consolidating spend, procurement can unlock larger discounts from cloud service providers, which incentivizes further spend on cloud marketplaces.” Trevor Schulze — CIO of RingCentral Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success 9 Deloitte 2019 CPO Survey
  13. 13. 13 Assessing Cloud Marketplace Fit Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  14. 14. 14 Should you List on Cloud Marketplaces? If the Answer is “Yes” to Most of these Questions, then Maybe so… Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success Does your solution run, or can it be deployed on one the cloud providers marketplace infrastructure? Rationale: You will want to prioritize the cloud marketplace you work with based on who you are working with the most closely today. This will also increase the level of attention and support you may receive from the cloud marketplace. Is the main buyer foryour solution CIOs, IT developers, data audiences or someone who works and utilizes cloud vendor offerings at their organization? Rationale: These customer profiles most likely know they have a committed cloud budget that they can use to purchase your solution. Line-of-business buyers are not yet acclimated to cloud marketplaces as a procurement mechanism. Are you open to offering a free trial? Rationale: Free trials help marketplace users try before they buy. This approach is oftentimes considered table-stakes for a marketplace listing. Are customers asking your field to put purchases through cloud marketplaces? Rationale: One of the strongest reasons to join marketplaces are if your customers are already leveraging cloud vendors strategically and asking to utilize their respective marketplace for a potential transaction. Does your solution promote greater or improved IaaS consumption? Rationale: If you are hoping for a sales lift from a cloud vendor’s sales team then it helps if your solution compliments their offerings and aligns with their goals such as increasing cloud consumption. Can you commit a minimum of 1 full-time employee (FTE) to manage the alliance, 1 FTE to manage technical requirements, and .5 FTE to support marketing the alliance? Rationale: Companies need to make sure they provide the right business, technical, and marketing support to properly develop this channel.
  15. 15. 15 Cloud Marketplace Overview Identify the Cloud Marketplace that Most Aligns with your Current Go-to-Market Motion Assess your GTM-Marketplace fit: Cloud Customer Concentration Cloud Market Share in 202010 Cloud Position Software Internet, Government, Gaming, High Tech, Financial Service and Insurance, Digital Media 31% First mover with large installed base and AWS Data Exchange. Healthcare, FSI, Retail, Manufacturing, Government, Heavy Industries 20% Established credibility with large F500 brands and large enterprise sales force. Retail, Media, CPG, Telco, High Tech Manufacturing 6% Strong capabilities in hybrid cloud, AI, and Containers and fastest market share growth. Relationship: If you’re already leveraging a cloud provider’s resources strategically you will most likely get preferred marketplace support and treatment from them. Strategy: Your solution aligns strongly with a cloud’s particular strategy (i.e. Google and Open source, Microsoft and Healthcare, AWS and IoT). Customers: Invest in cloud marketplaces that align to the industries you’re selling to, and cloud providers that your customer are already using. Deal Structure: Identify marketplaces that provide transaction offerings and deployment types that match your typical deal and product offering. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success 10 Canalys Cloud Channels Analysis, July 2020
  16. 16. 16 Top Marketplace Categories Understand the Technology Buyers and Categories Most Relevant on Cloud Marketplaces BI DevOps SIEM Security Operating Systems Storage Networking Database Companies on Cloud Marketplaces: Target Audience: IT Professionals, Developers, SecOps, DevOps, Data Analyst, etc.11 11 AWS re:Invent 2019: How to Sell in AWS Marketplace, Top 8 Categories in AWS Marketplace Note: Please see important disclaimers at the end of this document. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  17. 17. 17 Marketplace Economics How do Cloud Marketplace Economics Work? Many cloud marketplaces advertise an 8-20% revenue share. These are negotiable based on factors such as cloud consumption, your strategic nature to the cloud vendor, marketplace programs, and marketplace revenue commitments you can make each year. Depending on your offering type and pricing option your economics will differ. Check with your accounting firm. There are multiple ways to account for cloud vendor revenue share that may enable you to recognize the full contract amount as top line revenue. Example (see below tables): Two marketplace transactions assuming a 20% revenue share. Example #1: Example #2: SasS App Subscription Your License Cost Customer Pays Cloud Marketplace $100 Per Month $100 Per Month Transaction Expense/Cost: Cloud Marketplade Revenue Share Cloud Usage Cost $20 Per Month Bill to Publisher Revenue Recieved: Cloud Marketplace Pays You 20% $80 Per Month Pay-As-You-Go (Metering) Your License Cost Cloud Usage Cost Customer Pays Cloud Marketplace $1.00 Per Hour $0.14 Per Hour $1.14 Per Hour Transaction Expense/Cost: Cloud Marketplace Revenue Share of License Cloud Marketplace Keeps 100% of Cloud Usage $0.20 Per Hour $0.14 Per Hour Revenue Recieved: Cloud Marketplace Pays You 20% $0.80 Per Hour Note: Illustration purposes only. Check with each cloud provider on their economic terms assumptions: 20% revenue share. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  18. 18. 18 How to Thrive on Cloud Marketplaces Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  19. 19. 19 Your CloudAlliance Team Staff-Up to Successfully Go-to-Market with Cloud Marketplaces Head of BD and Alliances Oversees all alliance and partner relationships for OEM, ISVs, VARs, cloud vendors and resellers. Head of Partner Sales Leads the partner sales team and sets the quotas, compensation, and territory for partner sales managers. Works closely with the direct sales leadership team to ensure proper alignment. Partner Marketing Manager Responsible for working with the Cloud Alliance Manager and Partner Sales Team to create collateral for internal sales enablement, cloud seller sales enablement, and owning joint marketing initiatives with the cloud provider. Cloud Alliance Manager Focuses on owning and managing the cloud relationship and goals at a strategic level. The single point of contact for your cloud partner and the person who cross- functionally manages sales, technical, and marketing resources to ensure they are supporting key initiatives. Partner Product Manager Responsible for owning the technical track of your cloud relationship. This person ensures your solution is integrated into the cloud provider’s latest solutions to increase your co- sell value proposition and ensure customers have a seamless experience between your product and the cloud provider. Partner Sales Manager Responsible for enabling direct sales teams on all channel sale opportunities. These individuals help to qualify cloud marketplace transactions in the field and oversee the marketplace transaction process for customers and your direct sellers. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  20. 20. 20 Example:Alliance Team Structure How to Organize a Cloud Marketplace Team Direct report Provides guidance and direction to HEAD OF BD AND ALLIANCES HEAD OF SALES PARTNER SALES MANAGER CLOUD ALLIANCE MANAGER PARTNER MARKETING MANAGER PARTNER PRODUCT MANAGER PARTNER SALES MANAGER PARTNER SALES MANAGER PARTNER SALES MANAGER EAST SOUTH WEST CENTRAL Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success “At corporate, I have dedicated folks to each cloud marketplace, because it’s a continuous process and once you get on a cloud marketplace, you have just started.” Colleen Kapase WW Partner Alliances at Snowflake CLOUD VENDOR / MARKETPLACE
  21. 21. 21 Alliance Team Strategies Align and Embed Partner Sellers with Direct Sellers to Avoid Channel Conflicts Align the partner sales team the same way you do your direct sellers (i.e. region, industry, customer segment) to foster GTM collaboration. Cloud Alliance Managers are key to orchestrating resources around cloud initiatives that include integration tracks, GTM programs, technical accreditations, marketing initiatives, and program outcomes. They need to influence internal stakeholders who are dotted line to them, such as the Partner Marketing Manager, Partner Product Manager, and Partner Sales Manager. Blend variable compensation based on overall territory performance and specific channel performance in order to promote channel activity while also incentivizing the organization’s overall revenue goal. Partner Marketing Managers and Partner Product Managers can manage multiple cloud relationships in their infancy phase. Over time, and as the relationship becomes more strategic, these individuals may evolve into dedicated resources to specific cloud vendors. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  22. 22. 22 4 Tiers of Cloud Marketplace Maturity Unlock Marketing, Sales, and Technical Support from your Cloud Partner CO-SELLING CO-MARKETING TECHNICAL ENABLEMENT VISIBILITY Visibility • Gain visibility into cloud vendor’s global customer base • Promote listing availability Technical Enablement • Receive technical architecture guidance • Receive cloud credits for development • Access to cloud executives Co-Marketing • Joint social promotion, case studies, and content development • Cloud leadership endorsement • Promotional credits for customer trial users Co-Selling • Cloud seller webinars • Industry enablement sessions • Solution spotlight to cloud sellers • Negotiated SPIFFs for cloud sellers • Cosponsored webinars to customers • Joint account GTM target campaigns Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  23. 23. 23 Achieving Maturitywith your Cloud Marketplace 4 Key Initiatives Contribute to Cloud Marketplace Success 1. Cross-Functional Alignment How well can you align your solution with the strategy and objectives of the respective cloud marketplace? 3. Promote your Listing How well can you market, advertise, and promote your listing and partnership? 2. C-Level Commitment How much of a commitment can you make to the cloud marketplace and get from your executive team on marketplace initiatives? 4. Enable Sellers How can you enable your direct sellers and cloud sellers? Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  24. 24. 24 Cross-FunctionalAlignment Marketplaces Require Cross-Functional Alignment A marketplace requires commitment and buy-in from sales, marketing, legal, finance, operations, engineering, and product teams. Getting listed on a marketplace is the starting point not the finish line. Once listed, you will need to promote, manage, and invest in the channel. Sales, Marketing, Channel Legal, Finance, Operations Engineering, Architect, Product Management Pre-Listing: • Asses Strategic Value • Train the Sales Field • Prepare a Press Announcement • Create a Marketplace Landing Page Pre-Listing: • Develop Pricing • Determine a Tax Strategy • Agree to a EULA/Standard Contract • Determine Field Compensation Pre-Listing: • API Configuration • Meet Software Requirements • Create Internal and External Order Notifications • Build Product Integrations Post-Listing: • Drive Listing Traffic • Educate Cloud Sellers on the Solution • Qualify Deal Opportunities for the Marketplace • Develop Content to Drive Awareness including Webinars and Blogs Post-Listing: • Manage Private Offers • Create a System of Record for Marketplace Transactions • Qualify Deal Opportunities for the Marketplace • Develop an Order Reporting Process Post-Listing: • Provide Technical Support • Troubleshoot Technical Anomalies and Failed Transactions • Ongoing API Management • Develop and Release Product Updates Key Insight If you can agree to a marketplaces EULA (cloud standard contract), and your buyer has agreed as well, you can remove some of the legal overhead in a deal. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  25. 25. 25 Getting Started Requires C-Level Commitment Getting Started on Cloud Marketplaces Requires CEO, CRO, and CFO Buy-In Visibility To achieve marketplace success and unlock cloud co-sell benefits requires executive visibility. Some of the cloud marketplace programs outline a certain level of executive involvement to receive co-sell benefits. Questions WorthAsking Before you decide on making cloud marketplaces an executive level initiative consider how strategic you are to one another: Does your product increase the consumption and/or optimize the experience of a cloud vendor’s services? Are the cloud provider’s services strategic to you and your customers? Q1. Q2. Expectations It’s important for the executive team to understand the time-horizon you set for success. It takes time to yield results on cloud marketplaces—anywhere between 6-9 months before a company will start to see a sales lift. Your c-suite should be prepared for this incubation period. Investment Investing in a cloud marketplaces strategy is a significant commitment between you and the cloud vendor. You need to be ready to invest the technical resources to build integrations and ideally neutralize compensation with your field on marketplace transactions. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  26. 26. 26 Promote your Listing Boost Marketplace Conversion by Marketing your Listing like it’s a Product Announce your Listing Build a dedicated landing page to promote the listing’s availability. This will help direct buyers to where they can find more information about your marketplace listing, and how they can access it. For example, Gremlin created an AWS Marketplace- specific landing page, highlighting some well-known customers and offering a marketplace launch discount. Optimize Your Listing Create a PR moment by launching your listing via a press release or blog. From there, focus on ongoing content development to drive continous education and awareness around your listing. Product documentation, customer case studies, tutorial videos, and starter guides will engage, educate, and influence buyers and cloud sellers. Drive Traffic to Your Listing Leverage marketplace analytics to measure the success of your marketing campaigns, and to gain an understanding of how customers are configuring and adopting your solution. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success What makes a good case study? • Tell the “Better Together” story of how your solution plus the cloud provider deliver an exceptional outcome. • Include real numbers to help readers clearly understand customer success. • Provide a multitude of formats such as podcasts, videos, infographics, and white papers. • Make content easily accessible to customers, your sellers, and cloud sellers. Key Insight Customer case studies are a critical marketing asset for your marketplace marketing strategy. Case studies help inform buyers and provide cloud sellers with lessons on how they can apply your solution to their customers.
  27. 27. 27 Case Study: 4 1 2 3 Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success An Optimized Landing Page Increases Engagement Matillion is a startup that procures sales through cloud marketplaces. Matillion’s listing is an example of how to create a compelling page for buyers. 1. Matillion offers buyers a free trial so they can quickly experience the solution. 2. The webpage features reviews that helps build buyer confidence. 3. The page also provides a clear description of the technical and business value of the solution. 4. The site includes resources such as videos and customer case studies to help guide users on how to leverage the solution.
  28. 28. 28 Enable your Sellers Sales Teams Need to be Incentivized, Educated, and Supported to Utilize Cloud Marketplaces Effectively Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success “What you don’t want to do is introduce friction into the sales process, so you have to work with sales and business operations teams to make cloud marketplace transactions look like any other transaction.” Jabari Norton VP Global Partner Sales and Alliances at Sumo Logic 1. Incentivize Sales to: Eliminate Channel Conflict Think about compensating your direct sellers on the full transaction value of marketplace deals to avoid channel conflict and marketplace aversion from the field. 2. Educate Seller on Marketplace Benefits: Shortens Sales Cycles Procurement is a challenge for direct sellers to navigate, especially for large enterprise deals, adding multiple months on a sales cycle. Marketplaces accelerate procurement approvals. Help Sales Land and Expand Larger Deals By utilizing dedicated cloud budgets through marketplaces, software vendors can often convert bigger deals through marketplaces than they would otherwise. 3. Support Sellers by: Provide the Sales Team with Field Support Embed cloud partner sales managers to identify marketplace opportunities, navigate marketplace vernacular, connect your sellers with cloud sellers, and help make cloud marketplace transaction processes frictionless for your sellers.
  29. 29. 29 Qualify Marketplace Opportunities Train Sales Teams to Qualify Deals to Increase Success with the Channel 1 2 3 4 Have you (or do you) buy 3rd party technologies via Amazon, Azure, or Google’s Marketplace? Prospect MarketplaceAssessment Have they signed the cloud vendor’s standard contract? Who owns your company’s cloud relationship? Do you have an enterprise contract with Azure, Google Cloud, and/or AWS? Key Insight: Evaluate if your prospect has experience and is familiar with the ability to source and procure technologies through marketplaces. Key Insight: Utilizing standard contracts will help reduce the typical legal work required in an enterprise deal. Key Insight: Identify if the CIO, IT Infrastructure, or sourcing team is responsible for the cloud commitment and who can approve a marketplace transaction. Key Insight: Cloud enterprise contract commitments can be utilized for software vendor purchases through marketplaces. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  30. 30. 30 Enable Cloud Sellers to Co-Sell Educate Cloud Sellers on the Value of Your Solution The Problem The Solution The field sales teams of Cloud Service Providers are growing rapidly, which require ongoing sales enablement for your listing. For example, the AWS sales team has grown from 5,500 to 9,000+ in the last six months — that’s 63%12 growth. Enablement needs to be continuous. Educational materials, webinars, newsletters, and executive workshops should be produced regularly to ensure cloud partners are kept abreast of how you can help their business and customers. Cloud sellers are carrying enormous sales quotas with more than 100 solutions delivered by the companies they work for. It is unfair to expect cloud sales teams to know every available partner solution. Don’t assume cloud sellers know your solution when you have a joint opportunity. Register your opportunities with cloud providers and work with their partner teams to properly enable their cloud seller on the opportunity. Sellers want solutions that will help them drive cloud consumption and expand customer accounts. Tie your solution to the cloud sellers’ goals. Communicate how you have a “better together” story with their offering and make sure you are integrated into their latest offerings. 12 AWS Labor Growth Calculated Via LinkedIn Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success CLOUD SALES LEADER PERSPECTIVE “What helps our field understand your value as a marketplace ISV offering is if they can learn how a Google Cloud customer has had success adopting your solution. Then, our sales team can understand how and when they should pull you into deals with their customers.” Jeff Nuzum Director at Google Cloud Platform
  31. 31. 31 Measuring Marketplace Success Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  32. 32. 32 Deal Speed Evaluate if cloud marketplace transactions yield shorter sales cycles. Faster deal cycles result in an increase in sales efficiency. Deal Reliability By being part of a cloud provider’s spend line, you become part of their IT strategy. When times are difficult, it’s more likely they will focus on vendors who are outside of the cloud provider’s budget to renegotiate or discontinue contracts. Deal Size and Length By tapping into your customer’s existing cloud provider commitments, your sellers should be able to unlock larger and longer deals. Howto Measure Cloud Marketplace Success Marketplace Success Impacts Deal Speed, Size, and Reliability Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success “If the customer benefits from using the cloud marketplace, we will encourage them to use it. It helps us deliver customer value while making it easier for us to capture more strategic cloud spend.” Alan Chhabra SVP, WW Partners + SVP, Asia at MongoDB
  33. 33. 33 Case Study: Sumo Logic Sumo Logic’s Path to Driving Marketplace Revenue AWS was a Strategic Relationship For Sumo Logic For Sumo Logic, AWS was its most strategic partner. Since many of Sumo Logic’s customers are also using AWS it made sense to join the company’s cloud marketplace. Executive Buy-In and Alignment Was Key For Sumo Logic, a cloud marketplace strategy was a top-down initiative and had buy-in from the CEO, CFO, and CRO. The executive alignment helped allocate the necessary resources to ensure success and neutralize the marketplace channel with sellers. Private Offers Helped Drive Listing Activity and Transactions Private offers were key to success at Sumo Logic since it allowed them to negotiate contracts similar to their direct enterprise sales motion. It Took a Dedicated Team and Several Months to See Results Sumo Logic has dedicated technical, marketing, and sales resources allocated to its cloud marketplaces strategy. It took about 6-9 months to train the field and start to see meaningful results. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success “It was critical that we made the marketplaces transaction process exactly the same as any other deal, which reduced friction and helped our sellers embrace the channel.” Jabari Norton VP Global Partner Sales and Alliances at Sumo Logic Results Double-digit marketplace transaction growth 4 quarters in a row 8-figure revenue annually through marketplaces
  34. 34. 34 The Future of Cloud Marketplaces Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  35. 35. 35 The Future of Cloud Marketplaces From a Cloud Procurement Mechanism to a Discovery-to-Close Platform Attracting Inbound Leads Expanding to Line of Business Solutions Offering Technology Outcomes Versus Software As cloud marketplaces grow in popularity, they will attract more buyers and sellers of software. The power of aggregation may not only make them a viable procurement channel, but also a discovery mechanism for third party solutions. Cloud marketplaces offer an opportunity to expand beyond technical solutions. In the future, they may become a place where business leaders go to buy sales and marketing technologies, for example. Selling bundled technology and outcomes on cloud marketplaces may be in the not-so-distant future. Looking ahead, it wouldn’t be surprising to see a company buy the “connected factory solution,” on a marketplace, which would come with sensors, database technology, an analytic solution and the service integrators — all in one transaction. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  36. 36. 36 Marketplace Resources Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  37. 37. 37 Marketplace Resources Cloud Marketplaces Go-to-Market Resource Center Azure Marketplace Best Practice Guide Microsoft Marketplace Reward Programs Azure Commercial Marketplace Benefits Google Cloud Marketplace GTM Guide Google Cloud Marketplace Documentation AWS Marketplace- Seller’s Guide AWS Marketplace GTM Program AWS Marketplace Startup Program Tackle.io Cloud Marketplace Blog Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  38. 38. 38 Contributors Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  39. 39. 39 Alliance Leaders Alan Chhabra, SVP, WW Partners SVP, Asia, MongoDB Brian Denker, Co-Founder and COO, Tackle.io Colleen Kapase, VP WW Partner Alliances, Snowflake Bill Lapcevic, VP of BD, Auth0 Brian Mullen, VP GM Cloud, InfluxData Sagar Murthy, Head of Cloud Partnerships Strategy, Confluent Jabari Norton, VP Global Partner Sales Alliance, Sumo Logic Matthew Polly, VP WW BD, Alliances, Channels, Crowdstrike Keenan Rice, VP Strategic Alliances, Looker Matthew Scullion, CEO, Matillon Cloud Leaders Amy Bray, Head of GTM Strategy, Google Cloud Marketplace Justin Forth, Sr. BD Manager VC, AWS Marketplace Marc Harpster, Global Lead SaaS, AWS Marketplace Jeana Jorgensen, GM, C+E Partner and Startup Experience Jeff Nuzum, Director, Google Cloud Platform Noga Tal, Global Head of Partnerships, Microsoft for Startups CIOs Trevor Schulze, SVP CIO, RingCentral Contributors Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  40. 40. 40 Disclaimers Nothing presented within this presentation is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures, LLC (“Sapphire”). Information provided reflects Sapphires’ views as of a time, whereby such views are subject to change at any point and Sapphire shall not be obligated to provide notice of any change. Third party provider products and services presented in this article are not to be interpreted as a promise or guarantee of results by Sapphire. No level of satisfaction with any of the third party provider products or services presented within this article is assured by Sapphire. The criteria used to present third party provider products and services within this article is not financially related and nothing presented herein is intended to constitute investment advice, an offer to buy or sell securities, recommendations, and/or official statements by Sapphire or its affiliates. Various companies mentioned in this presentation may include a representative sample of portfolio companies in which Sapphire has invested in which the author believes such companies fit the objective criteria stated in commentary, which do not reflect all investments made by Sapphire. A complete alphabetical list of Sapphire’s investments made by its direct growth and sports investing strategies is available here. No assumptions should be made that investments listed above were or will be profitable. Due to various risks and uncertainties, actual events, results or the actual experience may differ materially from those reflected or contemplated in these statements. Nothing contained in this article may be relied upon as a guarantee or assurance as to the future success of any particular company. Past performance is not indicative of future results. Marketplace Resources The Future of Cloud Marketplaces The Value of Marketplaces Assessing Cloud Marketplace Fit How to Thrive on Cloud Marketplaces Measuring Marketplace Success
  41. 41. 41 Thank you For any questions, please reach out to Rico Mallozzi www.sapphireventures.com @SapphireVC | …/sapphirevc

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