Power of Cloud Marketplace Flywheels: What ISV Alliance Leaders Must Know
- May 18
- 2 min read
Updated: May 19
The hyperscaler cloud marketplace ecosystem has quietly become a juggernaut, with cloud commits growing by $91B in the last 12 months alone to reach $439B.
What differentiates leaders from laggards? Understanding that marketplace success hinges on activating and accelerating growth flywheels.
Cloud marketplaces transform GTM by creating three interconnected flywheels that build momentum over time. When synchronized, these flywheels drive up to 40% faster sales cycles and 80% larger deals.
The Customer Acquisition Flywheel: Co-Market
Co-Market starts with enhanced visibility to millions of embedded buyers (e.g., 6M on Azure). Streamlined marketplace procurement leads to initial customer wins, generating reviews and usage data, which further enhances visibility, attracting additional customers and cloud provider attention.
The Co-Sell Flywheel
Marketplace traction qualifies ISVs for co-sell programs, incentivizing cloud provider sales teams to help sell your solutions. Customers buying ISV solutions via Marketplace boost not only ISV revenue but also cloud consumption, creating a virtuous cycle. Providers increasingly promote successful ISVs through formal co-sell programs to drive further marketplace revenue.
The Product Innovation Flywheel: Co-Build
Marketplace customer interactions produce insights enabling rapid product improvements. Deep integration with advanced cloud services (AI/ML, analytics) creates differentiated offerings that drive higher customer satisfaction and more innovation data.
Leading ISVs use marketplace data to identify high-converting product features and valuable cloud integrations.
While "better together" and co-sell are critical, top-performing ISVs leverage additional accelerants:
Financial Alignment as Accelerant
Allowing customers to utilize pre-existing cloud commitments aligns three-way incentives, shifting conversations from new budgets to strategic use of existing funds—accelerating deals.
Product-Led Growth as the New Frontier
While private offers drove initial marketplace adoption, hyperscalers increasingly focus on product-led growth. ISVs must optimize self-service, free trials, and PAYG alongside traditional enterprise sales.
Channel Partners as Scaling Engines
Leveraging channel, SI, and distributors through programs like CPPO, MPO, and DSOR significantly boosts marketplace efficiency. Partners bridge sales, hyperscalers, and customers, eliminating friction that could slow momentum.
The Multi-Cloud Meta-Flywheel
Finally, advanced ISVs create a "meta-flywheel," where success in one marketplace boosts credibility and efficiency in others.
However, prematurely expanding multi-cloud strategies can dilute efforts. Master one flywheel before scaling further.
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