There are 8 key #partnerships that can unlock growth of your SaaS business and extend your market reach. In this new series weâll explore them one by one, starting with âïž cloud #marketplaces. Letâs dive in.
Cloud marketplaces are growing 84% YoY and are now the fastest-growing channel in SaaS, projected to deliver $45 Bn in revenue by 2025 (Canalys).
Marketplaces are convenient for customers and can radically accelerate the enterprise procurement, making them an irresistible part of any smart GTM strategy.
đœ At the heart of each cloud marketplace is a hyperscaler (Amazon Web Services (AWS), Google, MSFT) or big SaaS vendor (Salesforce, Atlassian, etc.) that opens their software to 3rd party apps which can be sold via their marketplace.
These vendors curate the product experience and, crucially, handle procurement. So their existing customers can now buy your product via their platform getting unified invoices.
Because itâs simple, secure and fast, customers who make one purchase on a Cloud Marketplace are likely to switch to this way of buying entirely.
With hyperscalers, a massive benefit of the marketplace for enterprise customers is the ability to purchase 3rd party apps using cloud commitments. This indirectly lowers their costs.
See where itâs going?
âĄïž As marketplaces are rapidly picking up momentum, all 3 hyperscalers (and many other vendors) are making them the cornerstone of their GTM strategies.
Today, AWS facilitates >$1Bn/year via its marketplace, including $XXMM deals.
CrowdStrike, after witnessing 100% YoY growth on AWS, is transitioning to a marketplace-first GTM.
Microsoft recently boasted closing $100M in deals via their marketplace in just one week.
But what will this mean for your business?
đ Marketplaces
Partnerâs Expertise in Your Product: Low
Geo Reach: đș High
Internal Investment Required: đș High
Partner Collaboration Investment: đș High
Commission: Low 3% (MSFT, Google, AWS) to 25-30% (Atlassian, etc.)
Marketplace owners will not have in-depth knowledge about your product, but their geo reach can scale your product globally.
Your internal investment in setting up a marketplace GTM will be moderate to high. This includes enhancing your code base and billing systems to support this shift.
Listing on the marketplace is only the beginning. You need to drive demand to the marketplace yourself, at least at the start. This means collaborating with field sellers of hyperscalers, driving demand via marketing or/and collaborating with channel partners.
You also need the right partnership talent in your org who know nuances of #growth via marketplaces.
đ It's a mid- to long-term strategy, but as more software distribution is moving to marketplaces, it's absolutely worth considering.