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How Cloud marketplaces are reshaping SaaS growth

#Marketplaces of cloud hyperscalers are transforming the #growth 📊trajectory for SaaS vendors, redefining their GTM strategies and altering the ways they transact with customers. Let's look how the landscape is evolving.


Hyperscalers (Amazon Web Services (AWS), Microsoft Cloud, Google Cloud) see marketplaces as strategic levers to boost their cloud consumption.


According to Boston Consulting Group (BCG), their marketplace listings have shot up, showing a 🔺2.5X increase in the last few years. Forecasts predict an impressive $45B in sales through this channel by EOY 2025.





💰 Time for SaaS firms to dive in?


Most proactive ISVs already pull in ~5% of their ARR through these marketplaces. Predictions hint at this figure soaring to >20%.


For companies built with a marketplace-first ethos, an impressive 50% of ARR could be harnessed via this route.



💡 Inside Look at GTM shifts in Cloud Marketplaces


Public Offers - These direct transactions with standard terms make up roughly 50% of hyperscaler marketplace sales volume, but only 20% by value.


Private Offers - These deals with customized pricing/terms account for the remaining 50% of sales volume and a substantial 📍 80% of marketplace sales value.



Private offers often drive deals exceeding $100K that substantially boost cloud consumption. These offers play a pivotal role in hyperscaler marketplaces and frequently involve channel partners.


While the prospect of tapping into pre-committed cloud credits seems appealing, for ISVs, these deals are less about retiring credits and more about facilitating streamlined customer transactions at scale.



📈 Emerging Trends


ISV-directed sales of public offers are gaining momentum as more ISVs join marketplaces.



The involvement of channel partners is also on the rise, as hyperscalers have enabled ISVs to bring in and incentivize channel partners on marketplace sales.



💊 Marketplaces present immense opportunities as ISVs can access a vast customer base and tap into cloud budgets.


However, these benefits come with substantial costs.


Establishing a marketplace presence requires significant time, resources, and process changes.


Additionally, vendors need to build operational capabilities, including the expertise to formulate and execute complex private offers at scale.



📑 Therefore, in addition to urgency, SaaS companies must have a clear strategy to fully capitalize on the advantages offered by cloud marketplaces.


Potential of cloud marketplaces' varies among SaaS companies. Infrastructure software firms driving hyperscaler usage will gain most, whereas application-centric or SMB-focused companies may see lesser benefits.


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