Can PLG, partnerships and cloud marketplaces not only coexist, but reinforce each other? đŻ Freshworks' transition from a PLG model to experiencing 2X growth rate in partner-sourced ARR (vs direct sales) while also co-selling with AWS, is a prime example. Let's examine it.
Freshworks is known for its CX and CRM products that compete with Salesforce and Zendesk. It achieved $596 million ARR in 2023, surpassing Wall Street's forecasts with a 20% growth rate. But what's driving this growth?
đ Overlaying Partnerships on PLG
Originally Freshworks was built on PLG motion. The company explained, âPLG is the core foundation of FreshworksâŚThe simplicity and powerful functionality underpinning our Freshworks solutions acts as the primary driver of customer acquisition, conversion, and expansion.â
However, to grow, Freshworks needed to unlock the enterprise segment, where PLG has its limits.
This is why the company is making significant investments in partnerships.
Freshworks boasts 67K customers, including 2.5K with >$50K ARR, and has cultivated a network of 400 partners.
Dennis Woodside, its President, highlights, "We continue to see growth, particularly in larger accounts. While our history was in SMB ....But today about 60% of our revenue is coming from larger accountsâ.
Partners now drive 25% of the company's new ARR.
đ¤ Enterprise Co-selling with Hyperscalers
This has led to the company's partner-sourced revenue to grow at 37%, double that of their direct sales.
Freshworks demonstrated its strategic focus further, signing strategic collaboration agreement with Amazon Web Services (AWS) and becoming a finalist for AWS Business Applications Partner of the Year.
This week companyâs President underscored the potential of the AWS partnership for growth. AWS not only helps it co-sell and close deals faster, but customers also can buy Freshworks products using cloud commits.
âWe announced a couple weeks ago a partnership with AWS, where they're bringing us into new deals. We're working with them on deals. One of our largest deals with a large apparel maker this year was assisted by AWS.
Our customers are able to retire AWS commitments in terms of credits that they've committed to spend over multiple years by buying our software. So, that makes the buying process much easier for them and for us. It speeds the time to sale. So, that's an example of a large partner that we think can help us accelerate growth over time.â
đ Strategic Hiring Signals Upmarket Ambitions
The strategic direction of Freshworks GTM is clear. Yesterday it appointed Abe Smith as Chief of Global Field Operations, with his extensive experience in partner-focused companies like Zoom, Oracle and Cisco. This signals an intent to expand upmarket and with partners.
How are you integrating clouds and partnerships into your growth model?
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đ Accelerate your Growth in Cloud Marketplaces
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