Beyond the Cloud: Hyperscalers‘ Strategic Shift to Marketplace-Led Growth
Over the years, businesses have explored diverse strategies and approaches to drive their revenue and bottom line goals. For a long time, sales-led and marketing-led growth was considered to be most effective, where the onus was on the competencies of sales leaders and marketing campaigns, respectively. Gradually, sellers moved towards a product-led growth tactic, focusing on the product to drive the customer’s buying journey, with the onus on the product, its features, performance, etc. However, a new business trend is now on the horizon, especially for SaaS sellers and ISVs, highlighting the potential of marketplace-led growth. The new strategy puts hyperscalers or cloud marketplaces at the center of business growth and consider them as instrumental in driving revenue, innovation and an exemplary customer experience. For a long time, hyperscalers have been seen as channels to list software products to drive traffic to the conventional sales channel. In this approach, cloud marketplaces are only considered to be resources for lead generation. However, the recent years have seen the rise of marketplace-led growth, where hyperscalers are being recognized for their all encompassing potential to transform software sales for ISVs. In this article, we will focus on the transition towards marketplace-led growth, what it means, best practices for ISVs to capitalize this strategy and the future trends to look out for.Cloud marketplaces as a channel for sales, innovation and customer success
Let’s quickly understand the reasons behind the exponential rise in marketplace-led growth or the adoption of hyperscalers as a channel for sales, innovation and customer success. Invariably, ISVs are moving away from simply using marketplaces as a listing platform for product visibility, while focusing on the product, sales and marketing as key approaches for growth. Undoubtedly, each of those components is important, but marketplaces are now being viewed as playing a pivotal role in bringing all other strategies together. Here are the top reasons perpetuating the rise of marketplace-led growth.Procurement efficiency and cost optimization
One of the first reasons for marketplace-led growth is the potential of hyperscalers to help customers with efficient and optimized procurement. Many enterprise customers are more likely to choose a SaaS product or ISV that has a marketplace presence or offers transactable offers than its competitors that solely focus on traditional sales channels. In such a scenario, the marketplace becomes the key driver for new customer acquisition. Here are some of the reasons why customers are promoting marketplace-led growth:- Self service experience, which allows customers to procure publicly available software solutions directly, without any ISV intervention.
- Opportunity to capitalize on pre-committed cloud consumption across hyperscalers, which facilitates cost optimization for customers
- Stamp of approval from hyperscalers facilitating higher trust and credibility
Co-selling opportunities
The next factor driving marketplace-led growth is the co-selling opportunities offered by hyperscaler. Co-selling with Microsoft, AWS ACE Program and Partner Advantage by GCP, all contribute to higher adoption of marketplaces as growth channels. With co-selling opportunities and hyperscaler sourced referrals, ISVs are no longer alone in their sales journey. The onus of generating the right leads, converting them and eventually growing the business becomes a shared responsibility between their sales teams and field sellers for hyperscalers. However, the co-selling partnership only works when ISVs transact through cloud marketplace. Invariably, the immense potential of co-selling and the opportunity to unlock multi-million dollar deals is a major reason for marketplace-led growth. It also considerably expands the customer ecosystem for ISV, accessible through the cloud provider networks.Simplified post sales management and renewals
Another factor driving marketplace-led growth is the simplified post sales management for both software sellers and customers. For the customers, when billing happens through a single entity (cloud provider in this case), the entire process is streamlined. On the other hand, for ISVs, invoicing through cloud marketplaces adds efficiency to the entire process, which is managed by the hyperscaler. At the same time, marketplace-led growth is also being guided by the fact that facilitating renewals has faster and better chances of conversion in hyperscalers than other sales channels. Since customers already have a level of comfort and even committed cloud budgets, they are more likely to agree for renewal when transacting through the marketplace, than other channels. The three major factors mentioned above clearly highlight how marketplaces are the new growth channel for ISVs and SaaS businesses. While the product, sales and marketing strategies are all equally important, selling through the marketplaces is becoming a true gamechanger. Hyperscalers not only offer a conducive platform benefiting both customers and ISVs, but also provides ISVs with robust support, ecosystem partners and resources to accelerate their growth potential. Invariably, while product-led growth is definitely an approach to capitalize on, ISVs that complement it with marketplace-led growth are likely to see exponential business expansion.How to capitalize on marketplace-led growth?
In the section above, we have highlighted the factors which are driving ISVs towards marketplace-led growth. However, ISVs who actually want to capitalize on this marketplace-led growth trend, must adopt a strategic plan. Simply having a cloud marketplace listing will not be enough. While that can help in accelerating lead generation, a more comprehensive intervention playbook along with the right partner ecosystem is needed to monopolize this. Some of the strategies are mentioned below:List offers with zero engineering
Marketplace-led growth naturally begins with listing SaaS offers on the preferred cloud marketplaces. To actually capitalize on the benefits, it is best to create transactable offers, which allow customers to transact through the hyperscalers using their pre-committed cloud consumption. While a do it yourself approach can take multiple weeks or even months to get the offer live, a partner like SaaSify can help you get your transactable offer listed in a week. The latter ensures that you are able to capitalize on marketplace-led growth much faster. At the same time, a partner-led approach prevents any need for engineering changes, whereas DIY listing requires heavy engineering efforts, turning out to be operationally intensive for engineering teams and resource-wise inefficient. Thus, to accelerate the pace of marketplace-led growth for SaaS businesses, ISVs should consider onboarding a partner like SaaSify which can help with all listing needs.Redirect traffic to marketplace listing
Once the offer is live, it is imperative that ISVs direct their traffic towards the marketplace list. In this scenario, as soon as the listing goes live, ISVs must add the ‘available on xx marketplace’ button to their website or any other collateral being used. The objective is to create noise around the fact that customers can procure the solution via cloud marketplaces, accessing their pre-committed cloud consumption. Here, a strong GTM strategy can help with press releases, blogs and even joint marketing activities with the hyperscalers. Only when customers know that transacting through cloud marketplaces is an option, will the potential of marketplace-led growth be unlocked.Integrate sales-led and marketplace-led growth
To enhance the success of marketplace-led growth, it is important to integrate it with the other approaches, rather than establishing it as a competing one. For instance, the ISV sales team should not see marketplace-led growth as a competing force, aimed at bringing down their incentives or commission structure. It is important to educate the sales teams that marketplace-led growth will actually expand their potential customer pool. Guide them on the basics of the cloud marketplace transact model, create clear and transparent incentives and overall, position marketplace-led growth as an integrated strategy, which brings together sales, marketing, product innovation and customer experience.Automate cloud marketplace workflows
While initially ISVs can keep the marketplace-led growth approach manual, in terms of creating offers, managing invoicing, etc. However, as the volume of listings and offers increase, automation of workflows. Automation becomes even more important where ISVs have to toggle between different platforms and cater to customer customizations. At a macro level, creating private offers, co-selling and managing/ tracking offer status are scenarios where automation can help capitalize the potential of marketplace-led growth.Automate private offer creation and management
Most enterprise customers demand custom offers with negotiated pricing or contract terms. In a manual approach, there is quite a lot of toggling between the CRM or system of record where customer terms are captured and cloud marketplace platform where offers are created. Partnering with SaaSify can help ISVs automate the process of creating private offers from within Salesforce. This suggests that ISVs can directly convert any of their Salesforce opportunities, objects, etc. into private offers which go live in the hyperscaler. Furthermore, ISVs can manage the entire offer lifecycle from within Salesforce. They can check the status of the offer, whether or not it has been accepted by the customer, the billing and payment status, and even raise invoices, as needed, without leaving their preferred system of record. This significantly cuts down on the time, energy and resources spent in leveraging the marketplace-led growth potential.Automate co-selling
The next leg of automation that can help capitalize on marketplace-led growth potential is via co-selling. As mentioned above, co-selling enables ISVs to collaborate with cloud providers to expand their sales funnel. With SaaSify, ISVs can easily automate the process of co-selling for both inbound and outbound referrals. For the outgoing referrals, ISVs can map their Salesforce fields to align with the cloud marketplace fields and directly send referrals. For incoming referrals from cloud providers, ISVs can set up filters to accept them and further streamline the processes thereafter. Automation helps configure flows, notifications and actions between Salesforce and the cloud marketplace platform, without the need to manually toggle between the two platforms. Overall, with automation, ISVs can make the co-selling process highly effective and robust, further strengthening the impact of marketplace-led growth.Future of SaaS sales with marketplace-led growth
While the SaaS sales landscape has undergone several changes and has been constantly evolving, the current trend of marketplace-led growth is here to stay. From a simple lead generation strategy, marketplace-led growth has put hyperscalers at the center of SaaS sales and revenue growth for ISVs. Hyperscalers are now no longer just channels, but a complete vehicle in themselves as they help ISVs not only list their SaaS offerings, but support them with marketing, sales, technical and all other enablement support. Overall, the driver behind marketplace-led growth has been this increasing commitment of hyperscalers to foster collective success where ISVs benefit from accelerated deal closure, greater deal size and more customers, while cloud marketplaces benefit from increased cloud consumption. ISVs that are able to ride the marketplace-led growth train are likely to outpace and gain a competitive edge over ISVs that are contained to siloed product-led, sales-led or marketing-led growth strategies.Download our comprehensive eBook, “ACE 2.0 with SaaSify: Master Co-Selling on AWS Marketplace!” to decode the intricacies of AWS Marketplace and ACE 2.0, understand the importance of automating the ACE pipeline, navigate the recent changes and their impact on ISVs and to unlock in-depth details on automation, co-selling, and success stories revolving around the ACE 2.0 program.
