This year’s study focuses on results for system integrators, resellers and managed service providers.

Kelly Teal, Contributing Editor

October 23, 2023

4 Min Read
AWS Marketplace
AWS

Channel partners selling via the AWS Marketplace stand to make significant ROI, close deals faster and see bigger sales overall.

That’s according to Forrester Consulting’s latest Total Economic Impact report, “The Partner Opportunity for AWS Marketplace SIs, GSIs, and Resellers,” released on Monday.

And, importantly, this year’s study includes resellers, system integrators and managed service providers, rather than just independent software vendors. The latter, of course, tend to sell through the channel rather than being channel partners. Given the expanded focus, then, it’s easier to understand the full impact of the AWS Marketplace on the indirect channel overall, compared to previous editions of the report.

So, some of the biggest takeaways? Consider what Forrester found after interviewing more than two dozen channel partners selling via the AWS Marketplace:

  • Return on investment: 234%

  • Deal close times: 50% faster

  • Average deal size for a reseller in North America: 4-5 times larger

  • Net-new business: 40%

  • Channel Partner Private Offers growth rate: More than 130%

  • Increase in win rates for SIs/MSPs in North America: 19%

  • Average services gross margin in year 3: 37%

How Partners Are Making Money on AWS Marketplace

In terms of different revenue streams, Forrester identified three key ways in which partners are earning more through the AWS Marketplace.

The first stems from resale private offers. And, for the average partner in Year 1, gross profits from new business via resale private offers amounted to $2.4 million, Forrester found. Next, professional services private offer gross profits from new business (still in Year 1) came to $797,000, per Forrester. Finally, the whole influence of AWS Marketplace on professional services gross profits totaled $380,000 for the average partner Forrester assessed through its aggregation method.

Some of the money comes from AWS Marketplace funding and incentives.

“These opportunities have the potential to offset costs and enable further practice growth,” Forrester analysts noted.

To be clear, the Total Economic Impact numbers do not reflect promises of earnings for every partner selling on the AWS Marketplace. Forrester uses a composite approach when conducting these studies. That means its figures show what a partner at certain revenue thresholds typically makes. This year’s report evaluated outcomes for “a global business headquartered in North America with $2.5 billion in Year 1 revenue split between various revenue streams with software resale accounting for 25% of revenue at $625 million. It is an AWS Marketplace channel partner that resells software and offers services to its enterprise commercial and public sector customers via private offers across multiple listings,” according to the report.

Channel Futures reached out to AWS Marketplace leaders for comment on the Forrester report, but we didn’t get a response by our deadline.

AWS Marketplace Partners Speak

As for what partners themselves had to say, the report featured glowing reviews. None of the partners were named, but here’s a sampling of their responses to Forrester questions:

“We have had several large-scale, seven-figure-plus transactions that would not have happened without AWS Marketplace.” — Vice president, North America reseller

“The growth we’re seeing is unbelievable. Our year-over-year growth is up over 1,000%, so it’s not going away. We want to make sure we’re hand-in-hand with AWS and along for the ride.” —Cloud marketplace lead, North America system integrator

“Our customers value the benefits of procuring through AWS Marketplace, and we value our customers. ... At the end of the day, it’s all about taking care of the customer.” — Alliances director, North America reseller

“We’re able to protect our resale business by having the ability to execute [with] AWS Marketplace on transactions [coming up for renewal].” — Cloud sourcing team managing director, GSI

Why Cloud Marketplaces?

Cloud marketplaces are quickly becoming the de facto choice for customers buying software, applications and services. IT research firm Canalys (an Informa company) says that, by 2025, cloud marketplaces will represent a $45 billion opportunity.

AWS launched the first such storefront in 2012. The other hyperscalers followed suit not long after, and other vendors including Pax8 and Ingram Micro Cloud have since built their businesses on the cloud marketplace model.

Indeed, given how critical cloud marketplaces are proving for channel partners, the Channel Futures Leadership Summit will host a keynote dedicated to this topic on Oct. 31. Come learn more about the cloud marketplaces trend and why it’s critical for MSPs, resellers, SIs, consultants and agents to get on board.

Read more about:

AgentsMSPsVARs/SIs

About the Author(s)

Kelly Teal

Contributing Editor, Channel Futures

Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.

Free Newsletters for the Channel
Register for Your Free Newsletter Now

You May Also Like