“The bottom line of working with the cloud vendors is not what gets said at the top levels, the good intentions.” says Snowflake’s CEO Frank Slootman. “What matters is, what are the incentives💎, when you get 14 layers down at street level, how do people get paid?”
Why is this critical?
“That determines whether they're [field sellers of cloud vendors] either going to fight you and double and triple down on that or they're going to partner with you.”
🙌 Field alignment isn’t a trivial matter that can be overlooked. Snowflake’s CEO understands its importance so well that he made it a key point when extending their partnership with Microsoft.
While Snowflake saw strong alignment on the ground with Amazon Web Services (AWS), things were different with Microsoft. So when renegotiating their partnership with MSFT earlier this year, they made sales alignment a key point.
CEO explained:
“We see models where we've worked out really, really well, of course, with AWS. But with Microsoft, we were not in the place that we wanted to be at street level in terms of the incentives. So, we really took this opportunity when we were renegotiating our relationship with Microsoft to say, hey, we have to tackle this, right? And Microsoft very much wanted to be a bigger percentage of our business. …
And this is the way to do it. It's really you need to bring alignment, you know, to the field organizations, then you're going to get partnerships, and then you're going to get joint selling, and then you're going to get your fair share.”
🚩 Snowflake emphasized alignment with Microsoft Azure field sales:
✔️ 3 times in their press-release on partnership with Microsoft
✔️ Twice in the joint announcement by Snowflake CEO and Microsoft CEO Satya Nadella
✔️ Snowflake CEO also covered it in detail in their earning call
💡 What Can We Learn?
Snowflake is one of the best SaaS businesses out there. Even in current environment, their metrics are exemplary:
Growth: 37% YoY on a $2.5B run rate
Net Revenue Retention: 142% - among the best today
EV/Annualized Revenue: Top 3 in SaaS at 16.8X
Efficiency: Top 5 in SaaS at 59.7%
If a top CEO like Slootman personally prioritizes alignment with field sellers of cloud vendors, it signals that everyone else should be doing that too, don’t you think?
What worked for you in aligning with field sellers in (cloud) partnerships?
__________
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