Cloud Marketplaces Review: Ingram Micro, Salesforce AppExchange, More
Which should partners consider first?
August 20, 2020
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Although cloud marketplace purchases represent a very small percentage of enterprise spend, shadow IT, rogue buyers, or self-service customers – call it what you will – buy on cloud marketplaces. These online B2B storefronts make purchasing easy, pay as you go, and quick to satisfy a user in search of some sort of functionality.
As these ad hoc purchases mount, particularly in enterprises, so does risk. Risk, such as financial, compliance, security and vendor reliability, according to Liz Herbert, vice president, principal analyst at Forrester.
“Why cloud marketplaces are becoming more popular now – and we’re dedicating a lot of research across Forrester [on marketplaces], is because most large companies are trying to figure out the balance between enabling some of that end-user selection and end-user control over their tech environment with corporate standards,” she told Channel Futures.
Herbert writes the following in a recent report – “Out of the Shadows: How Marketplaces will Disrupt Tech Buying”:
“Marketplaces, done right, have the potential to create transparency, simplify contracting and purchasing, and make transactions more economical for all. In the near term, we see marketplaces disrupting purchasing for small and medium-size businesses, smaller purchases within the large enterprise, and low-complexity purchases of other (even pricey maintenance, repair, and operations items.”
In June 2019, D&H relaunched its cloud marketplace solutions platform. Using the Also digital commerce platform, partners got an improved user interface and integration with third-party platforms commonly used by MSPs, such as ConnectWise and Autotask, for invoicing. Other upgrades include the ability for partners to easily white label or brand their own storefront.
Partners aren’t clamoring, yet, for their own storefront.
“At this time, that doesn’t happen enough,” Jason Bystrak, vice president, cloud business unit at D&H, told Channel Futures. “Partners, or MSPs, are so focused on being the subject matter expert, they don’t want to expose the platform to their customers. I would argue they should still be subject matter experts, but they should still work with their customers to turn over some functionality, and add on value.”
The self-serve model makes it less expensive to manage, and even drives cross-sell and upsell opportunities.
The relaunched D&H cloud marketplace gives partners the ability to add their own services, via a SKU. These services can be bundled with a cloud solution.
Ingram Micro launched its Cloud Marketplace 10 years ago. In 2018, Ingram created CloudBlue, an independent cloud platform division. CloudBlue is a commerce platform. The division sells CloudBlue and services to larger service providers, such as MSPs, telecommunication companies, large VARs and other distributors.
The distributor works with vendors to add products and services in categories such as communications and collaboration, security, backup, disaster recovery, business apps, and multicloud solutions.
In fact, Ingram Micro kicked off the first Comet Competition in 2018. Comet is a global challenge to find the best ISV software to bring to market. Winners will be announced at Ingram Micro’s Cloud Summit in 2021.
“It’s really about staying on the edge of the explosion of independent software vendors (ISVs),” Tim FitzGerald, vice president, cloud channels sales, Americas, told Channel Futures. “This gives us a catalog, that we believe, is unrivaled.”
The Ingram Micro Marketplace has more than 200 vendors and 1,000 solutions – SaaS, IaaS, and PaaS. In the U.S., more than 5,000 partners transact on the marketplace.
“There’s an opportunity for partners to add their own services, or value-add, to the cloud solutions that their clients are consuming,” said FitzGerald. “As customers digitally transform at an accelerated rate, they need help to assess the workloads that they currently have, and see which of those workloads are consumable in an as-a-service model.”
Renee Bergeron, senior vice president and general manager at AppSmart, is responsible for the next phase of the company’s growth. AppSmart focuses on delivering an ICT catalog filling a unique space. It brings together a telecommunications catalog – fixed voice, fixed data, mobile, along with IaaS solutions.
“We know there’s convergence going on in the market where end customers want to work with fewer providers/partners that can solve business problems for them with all aspects of technology,” she told Channel Futures. “Instead of having to go to a telco agent, a reseller, an SI, to get the full stack in the cloud, they want to work with one partner that brings all of that.”
AppSmart focuses on creating the next generation of marketplace that helps with the adoption of solutions, or customer experience, and not just the transaction.
“We want to make it easy for customers to be on our marketplace and to access via our marketplace their applications,” she said.
The AppSmart Marketplace offers single sign-on and search capability across multiple SaaS applications, and also offers insights. Once automated, the marketplace offers insights with AI tools.
“That’s the next generation that we’re focused on providing to our partners. It’s about transaction, but delivering that experience to the end customer that goes beyond what the SaaS solution provides. It helps them adopt the technology,” she said.
AppSmart is also about to launch a new agent/partner experience on the marketplace.
“It’s about going beyond the functions and buttons that allow them to order. How do they think about it in terms of managing their business on an end-to-end continuum?” said Bergeron.
Microsoft’s Azure Marketplace offers apps across numerous categories such as virtual machine images, networking, storage, security, SaaS, databases, blockchain and more. Azure Marketplace users can also connect with gold and silver cloud competency partners to facilitate Azure adoption via their consulting services.
At the recent Microsoft Inspire, Microsoft global channel chief Garvriella Schuster talked about the changing partner landscape. The number of technology service providers – which the company formerly referred to as ISVs – is rapidly increasing.
These partners work on cloud service applications and participate in the Microsoft Azure Marketplace. They’re part of the company’s co-sell with Microsoft strategy. The vendor created Solution Workspace for these application builders.
Now 13 years in the making, Salesforce AppExchange is a comprehensive, enterprise cloud marketplace that extends Salesforce into any department or industry. It includes more than 5,000 apps and 1,000 Salesforce consultants with the expertise to drive the business transformations that customers are looking for.
Salesforce recruits different partner types. Charlie Richey, vice president, product management and operations, AppExchange, explains.
The first he refers to is anyone providing services, as consultants (this includes system integrators and agencies.) Just about everyone else writing applications is considered an ISV.
While not a cloud marketplace, the recent introduction of industry clouds is a related topic. Both IBM Cloud for Financial Services and SAP’s industry cloud are examples.
IBM’s financial services-ready public cloud, secure and enterprise-grade, is scheduled to launch in the second half of 2020. The effort was initially announced last November. The financial services public cloud is designed to help address the requirements of financial services institutions for regulatory compliance, security and resiliency. Financial institutions get to transact with technology vendors that have met the platform’s requirement. It offers a catalog of trusted ISV and SaaS solutions, according to IBM.
SAP Industry Cloud, launched in July at Sapphire Now Reimaged, is a platform and space for SAP where customers and partners build industry cloud solutions and applications that complement the intelligent suite using the Business Technology Platform, said Peter Maier, president of industries and customer advisory at SAP.
Cloud marketplaces are in the very early phase of maturity and adoption, no more than a third of the way in, according to industry players.
What that means to partners is that now is the time to get into the digital world. Experiment, learn and iterate. Experience the cloud marketplace with your customers. You want to be a front end of cloud marketplace growth. You don’t want to be a laggard.
And this from Forrester’s Hebert: Partners will have to differentiate with specialization and business acumen:
“Partners that have thrived by providing access, assembly and installation won’t survive the shift to marketplaces; those capabilities will be in the foundation of the marketplace. The marketplace era will suffocate the reseller market, while savvy “nontransaction” partners will flourish. Channel partners will need to make their money — and differentiate — in areas such as industry process know-how, change management and co-innovation. ‘Do’ and ‘execute’ work will decrease, while consulting will grow.”
Before COVID-19, Forrester predicted that 17% of all B2B transactions would go via the e-commerce, web direct marketplace by 2023.
“It’s safe to say that because of COVID-19, we’re going to reach that much sooner,” Jay McBain, principal analyst, channels and alliances, at Forrester.
The cloud spend is much higher than that and includes cloud infrastructure, SaaS, etc.
White-labeling a cloud marketplace is a good business opportunity. Partners need to introduce their customers to a cloud marketplace and add value to the sale via cross-selling and upselling. Partners need to market the cloud marketplace as an e-commerce engine for their business.
Today, partners use marketplaces more as a back office system – or managing on behalf of the customer. Move forward using the marketplace as a front-office system. Partners should think about building their own storefront and pushing it out to customers for a self-service experience.
Partners need to up their game and bundle offers for their customers. Instead, they sell based on demand or they sell one vendor at a time rather than put together a solution. Partners can differentiate themselves in a competitive commodity market.
On the vendor side, API maturity isn’t quite up to snuff yet, making some integrations challenging.
There’s still a lack of solution-bundling capability on some marketplaces.
Another shortcoming on some cloud marketplace platforms is the ability to do tiered pricing. One more is the inability to do co-term subscriptions.
The supply chain is siloed. Telecom comes from the agent, IaaS from the distributor or someone else for the business apps.
White-labeling a cloud marketplace is a good business opportunity. Partners need to introduce their customers to a cloud marketplace and add value to the sale via cross-selling and upselling. Partners need to market the cloud marketplace as an e-commerce engine for their business.
Today, partners use marketplaces more as a back office system – or managing on behalf of the customer. Move forward using the marketplace as a front-office system. Partners should think about building their own storefront and pushing it out to customers for a self-service experience.
Partners need to up their game and bundle offers for their customers. Instead, they sell based on demand or they sell one vendor at a time rather than put together a solution. Partners can differentiate themselves in a competitive commodity market.
On the vendor side, API maturity isn’t quite up to snuff yet, making some integrations challenging.
There’s still a lack of solution-bundling capability on some marketplaces.
Another shortcoming on some cloud marketplace platforms is the ability to do tiered pricing. One more is the inability to do co-term subscriptions.
The supply chain is siloed. Telecom comes from the agent, IaaS from the distributor or someone else for the business apps.
Cloud marketplaces have been around for more than a decade. You’ve no doubt heard of many of them. They come in many flavors.
Channel partners may be most familiar with those offered by their distributor partners; for example, D&H Distributing, Ingram Micro, Synnex and Tech Data. Pax8 emerged as a modern distributor for cloud services, arriving with no legacy product baggage. Then there are vendor marketplaces, most notably Salesforce’s AppExchange. SaaS marketplaces are also available from AWS, Google, Microsoft, and ServiceNow. AppSmart is another partner-led shop for B2B technology services.
There are hundreds of technology vendors offering B2B marketplaces, according to Forrester.
Despite being around, in some shape or form, for more than 10 years, the stars may finally be aligning for these marketplaces. Why? There’s digital transformation and the shift to cloud; plus, the convenience, vetting, lower cost and risk that cloud marketplaces offer.
Still, cloud marketplaces are an emerging entity with a very small percentage of spend, probably no more than 5%. And that varies by the category of product, as well as by the size of the business.
Scroll through the slideshow above for a closer a look at for a breakdown of some of the most notable cloud marketplaces.
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