Cloud #Marketplaces are transforming how SaaS businesses go-to-market and scale. Most cloud providers and enterprise SaaS vendors will be offering marketplaces by 2026 🎯 to meet customers’ needs for convenience and security (Gartner).
It’s insightful therefore to look at Okta’s report on the top marketplaces. While it didn’t cover all marketplaces (e.g. omitting Google Cloud), it's a great snapshot of the evolving scene.
💡 Why are SaaS companies building marketplaces?
✔️ To enhance core product functionality
Salesforce AppExchange pioneered this approach. This keeps the company focused on high-ROI areas while catering to diverse customer requirements, leveraging developer capabilities to personalize and extend its products. Shopify, Atlassian, ServiceNow, and Auth0 have also adopted this model.
✔️ To integrate with other products
Given the proliferation of best-of-breed SaaS products, product integrations are now crucial.
There's a nuanced distinction between extending core product functionality (above) and integrating with other products via marketplaces. Marketplaces focused on integration in this category want developers to build apps on top of their platform. Enterprise app marketplaces of Slack, Microsoft AppSource, Zoom, and Stripe focus on such integrations.
✔️ To provide an eCommerce experience
Amazon Web Services (AWS) Marketplace focuses on streamlining the process of finding, buying, and deploying software. Azure and Google Cloud also follow this path.
💎 Who benefits from marketplaces?
On the demand side:
- existing customers looking to leverage the marketplace providers' services;
- new users seeking functionalities provided by the marketplaces.
On the supply side:
- ISVs and developers whose products benefit from integration with the marketplace providers' products;
- developers whose customers overlap with marketplace customers.
📈 Who are the winners in the marketplace race?
AWS, Azure, Shopify, Salesforce, and Atlassian are leaders based on the number of listings and capabilities.
Snowflake and ServiceNow are innovators that follow.
💰 Who invests in marketplaces the most?
Okta assessed marketplace investment by tracking how many people are involved in building them (via LinkedIn).
To no surprise, many companies that spend the most are the same as those listed as leaders - AWS, Shopify, Salesforce, and Atlassian.
Microsoft seems to be getting 10X results with the same amount of investments as Okta or Stripe.
However, I'd argue that Microsoft is putting significantly more efforts in their cloud marketplace recently.
If you work in partnerships today, it's essential to understand GTM motion via marketplaces of large cloud players.