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“Every vendor is trying to figure out their marketplace strategy, which ones to prioritize, how to operationalize it, and how to bring traditional partners on that journey. The most successful vendors in the marketplace will be the ones that understand how to include service delivery partners as part of their marketplace strategy.”

Alex Smith

Vice President & Practice Lead, Ecosystems, Channels, & Marketplaces

Cloud Marketplaces Accelerate Agentic AI Adoption

Cloud marketplaces will become as big a Go-to-Market (GTM) for Independent Software Vendors (ISVs) as traditional distribution is for commercial hardware. Over $300 billion of committed cloud spending will continue to help fuel this engine.

  • First, marketplace fees have gradually been coming down. When marketplaces first came on the scene, fees were north of 20%, making them a very expensive proposition. Now, they are at about 3% as standard, and in some cases, as low as 1.5%. At this price point, marketplaces are as cost competitive as traditional distribution channels, and leave more room in the margin stack for ecosystem partners to take part. This fee reduction comes as a result of increased volume in marketplace activity, as well as the underlying goal that hyperscalers have: driving more infrastructure consumption.
  • Second, cloud commits across the major hyperscalers continue to surge. As the cloud becomes increasingly pivotal to enterprises the world over, companies are increasingly entering into long-term contracts with hyperscalers that ensures they have the best pricing, and a guarantee of resource availability. As of Q3 2024, cloud committed spending across the leading three hyperscalers surged to $393 billion (representing nearly 30% growth year-on-year). Certain portions of this commitment can be utilized on third-party products on the cloud marketplace, leading to a ready-made marketplace economy for ISVs to tap into.
  • Third, the hyperscalers have all launched programs that allow their partners to participate in the cloud marketplace. These ‘Private Offer’ programs enable partners to create custom offers for their customers via the marketplace. This could include pricing, bundling as well as their own value-add services. These programs ensure that ISVs that want to participate in the cloud marketplace can still leverage their partner ecosystem, and crucially, reward them for that activity via their own partner programs. Partners will play an integral role in cloud marketplaces. AWS, which has the most mature program, has indicated that north of 30% of marketplace transactions already feature a partner as the selling agent. This number will continue to grow.
  • Crowdstrike is one of a handful of companies that has surpassed $1 billion in total sales in the AWS Marketplace. Since launching on AWS in 2017, it has been its fastest growing route-to-market, and is also responsible for delivering a higher-than-average deal size (compared to its other sales channels). Crowdstrike has over 20 integrations with AWS products including AWS Control Tower and AWS GuardDuty.
  • NetApp recently launched NetApp Data Infrastructure Insights on the Azure Marketplace to help customers planning an Azure migration with streamlined observability and real-time telemetry data. NetApp has leaned heavily into its hyperscaler GTM strategy. In addition to offering products on the marketplaces, it is the first vendor to offer first-party services with all three leading hyperscalers.
  • Salesforce and AWS announced a wide-reaching strategic partnership agreement in 2023. One aspect of the agreement was the availability of select Salesforce products in the AWS marketplace for the first time, including Data Cloud, Service Cloud, Sales Cloud, Industry Clouds, Tableau, MuleSoft, Platform, and Heroku. In its Q3 2024 earnings, Salesforce highlighted AWS as a key growth driver with transactions doubling quarter-over-quarter and 10 deals exceeding $1 million in sales.

Alex Smith is Vice President & Practice Lead, Ecosystems, Channels, and Marketplaces at the Futurum Group. He is responsible for establishing and maintaining the Channels Research program as part of the overall Futurum GTM and Channels Practice. This includes overseeing the channel data rollout in the Futurum Intelligence Platform, primary research activities such as research boards and surveys, delivering thought-leading research reports, and advising clients on their indirect go-to-market strategies. Alex also supports the overall operations of the Futurum Research Business Unit, including P&L segmentation, sales & marketing alignment, and budget planning.

Prior to joining Futurum, Alex was VP of Channels & Enterprise Research at Canalys where he led a multi-million dollar research organization with more than 20 analysts. He played an integral role in helping the Canalys research organization migrate into Omdia after having been acquired in 2023. He is an accomplished research leader, as well as an expert in indirect go-to-market strategies. He has delivered numerous keynotes at partner-facing conferences.

Alex is based in Portland, Oregon but has lived in numerous places including California, Canada, Saudi Arabia, Thailand, and the UK. He has a Bachelor in Commerce and Finance Major from Dalhousie University, Halifax Canada.

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