Everything you need to know about the cloud marketplace before you step in
Tags: Marketplaces, Digital Transformation, Learning, Cloud Computing, SaaS

Everything you need to know about the cloud marketplace before you step in Zluri Jan 27·6 min read

It is not unusual for companies with more than 1000 employees to have 200–500 SaaS applications from many vendors. That number keeps growing with increasing requirements and upcoming new technologies. Before the emergence of cloud marketplaces, each of these vendors should go through a review process to negotiate their pricing terms, licenses, vendor set-up, security, payments, etc. It is tedious and takes several months to onboard a new vendor or renew the old contract. The process includes back and forth emails, calls, and red lines, and that’s when the cloud marketplace came in as a savior.

Initially, the cloud market just consisted of third-party apps. Now they have evolved bigger as a sophisticated distribution platform that offers its users the functionality to explore, procure, and deploy relevant SaaS applications at present. Marketplaces also come with strict protocols for listing, such as analysis for security and privacy. These are the same guardrails that apply for usual cloud services — User management, deployment process, and billing are included for using software through marketplaces. They also ask for additional certification if the particular application is for finance or government.

Selling opportunity is Massive:

In February 2020, the public cloud marketplace was said to have surpassed the $1 trillion cap with an enormous 45% growth rate, as reported by Bessemer Venture Partners’ in the 2020 state of Cloud report. In 2015 they predicted that it would reach $500 million by 2020, but the actual growth outpaced the optimistic projection and stands at $616 billion for the top five public cloud companies.

The happy consequence is that cloud marketplaces follow a similar trajectory for their growth and have opened up as a go-to-market area for many sellers who you haven’t heard of yet.

With big players like AWS marketplace, Google Cloud, and Azure marketplace, a company can list their software for buyers to find, buy, and provision them. And these offer pretty incredible opportunities for doing business the cloud way. Scaling companies such as Snowflake, PagerDuty, and many more (more than 35%of Forbes cloud 100 companies), as well as plenty of startups like Astronomer, CloudZero, etc., have already started embarking their movement to the marketplace. This has now allowed them to tap into the $250B+ spend that flows into all major public cloud service providers.

Moreover, beyond access to this massive pool of cloud spend, B2B marketplaces also unlock larger buyer budgets, an accelerated deal velocity, and valuable co-selling opportunities with the cloud providers. Also, 73% of B2B buyers prefer the ease of buying through e-commerce, web direct, or marketplaces.

Benefits of selling SaaS through Cloud Marketplace:

Visibility: Listing your product in the cloud marketplaces gives it superior visibility among the cloud users due to the high ranking of these cloud services in the market, which is a significant advantage. Also, these cloud marketplaces have got search tools for organically searching relevant products for potential customers.

Credibility: Those who purchase through cloud marketplace tend to be confident that they are listed on a trusted cloud service like AWS, Google Cloud, or Azure. Before getting listed, these SaaS applications would go through screening and reviewing levels, so the customers feel assured that they are buying from a trusted marketplace.

Deployment and Billing: These cloud marketplaces take care of deployment, invoice, and collection of SaaS products that are sold and pays the vendors every month on time. So vendors avoid hassle and cost associated with these activities, but their customers too experience a smooth and easy billing process they are already familiar with.

Flexible Pricing options: Products sold through the cloud marketplace can be billed on an hourly or monthly basis, which cuts the need for vendors to develop a software system and a billing infrastructure. In the cloud marketplace of AWS — Big data applications that do huge computational workload prefer hourly pricing, so customers are charged based on the type and number of instances.

Access for free trials: Companies that give off hourly pricing are equipped to provide built-in free trials through the cloud marketplace instead of developing their own. Once the free trial expires, the customers are smoothly transitioned to the paid version.