Four Reasons Why Enterprise Software Organizations Should Run Their Own One-Stop-Shop Digital Marketplaces (Think AWS Marketplace, But Better)

B2B software organizations are at a crossroads. Selling is hard and painfully costly. Channel partnerships make a lot of sense on paper, but 8 out 10 initiatives fail.

Cloud marketplaces, however, are beacons of hope, but should software vendor leaders put all of their eggs in these baskets?

Below are four strategic reasons why taking control of customer and partner relationships through full-spectrum, owned and operated digital marketplace capabilities could be a transformative move.

‍

The Build vs. Buy Equation

‍

The choice to embrace digital marketplaces that enable the buying and selling of 1st and 3rd party software, professional services, and perhaps even data, is strategic - and some enterprise software organizations are opting to build rather than buy. I've met a few.

Despite the substantial costs, resources, and risks involved, they're committed to this path, which is commendable.

These are firms with strategic hyperscaler marketplace partnerships, recognizing the significant advantages of also owning and operating a transactional marketplace for software and professional services (to start). They see the size of the prize. Their calculus, it appears, has determined that one plus one equals three or more.

But building is an option only for a select few. The majority will opt to buy.

‍

The Revenue Multiplier for Services Partners

‍

There's more compelling math, at least for those software organizations that are keenly aware of how their core economic value translates into ecosystem partner revenue opportunity, and how that circles back for even more upside.

This is the power of professional services (especially through partners), which can be tracked, measured, analyzed, optimized and monetized through an owned and operated transactional marketplace capability.

Although 3rd party software sales are core drivers of consumption, retention and growth across the cloud marketplaces, professional services through partners represent an immensely valuable growth lever that they plan to expand even more rapidly.

The same opportunity is evolving quickly across a small, but growing segment of the enterprise software landscape.

‍

The Customer Relationship

‍

Enterprise software organizations that aren't already committed to selling through the hyperscaler marketplaces (e.g. AWS Marketplace), will be soon. The low cost, the ability to ride existing cloud commits, and the friction-free procurement process all make cloud marketplaces a no-brainer GTM decision.

But, what about professional services?

This human capital element — including, but not limited to, consulting and professional services, reseller, referral, and related channel partnerships — alters the equation. These service provider relationships are critical, yet often underleveraged, ingredients of competitive advantage that help build and sustain customer relationships.

And when customers can procure 1st and 3rd party software through channel partners in an owned and operated store, with software fulfillment through any cloud marketplace, the best of both worlds emerges.

‍

The Data

‍

Just as nature abhors a vacuum, the market despises a gap. AWS Marketplace's move to enable the buying and selling of professional services at scale is a perfect example.

By identifying a gap where no structured marketplace existed for professional services alongside software products, AWSMP was able to create a new value proposition. And, incredibly importantly, the data captured is tremendously valuable.

This isn't to say that hyperscaler marketplaces shouldn't be engaged - they absolutely should be.

Instead, the point here is to demonstrate what's possible with an owned and operated marketplace designed to enable customers and partners connect, communicate and transact.

The data, like water in an ecosystem, can flow out and nourish a broader landscape, or it can be channeled into your own lush garden.

‍

‍

Photo by Steve Carter on Unsplash‍