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Navigating the New Frontier: How SIs and GSIs Can Thrive in the Era of Cloud Marketplaces

9 May 2024
2 minute read

An email and WhatsApp exchange with one of our investors got me thinking about the future of consultancies, SIs, and GSIs. I was exploring ideas regarding cloud marketplaces and how they’re about to shake up in the IT services world. It was one of those conversations that left me with more ideas than I knew what to do with, so I decided to put some of those thoughts down here. I hope it sparks some interesting thoughts for you too.

In the rapidly evolving landscape of IT services, where cloud marketplaces are reshaping how services are delivered and consumed, Systems Integrators (SIs) and Global Systems Integrators (GSIs) face a critical juncture. With the prospect of trillions of dollars in IT services spending transacting through marketplaces over the coming decade, the stakes couldn't be higher. This seismic shift represents both a tremendous opportunity and a significant threat to traditional IT service providers. The dual forces of fear and greed are driving SIs and GSIs to reassess their strategies in light of these changes.

To put this into perspective, AWS’s revenue multiple opportunity for ecosystem partners is estimated to be worth more than $500 billion today. Add to this the reverse revenue multiple that AWS and others are eyeing i.e. for every $1 in pro services transacted through cloud marketplaces, there is x number of incremental dollars of compute commitments to capture, it’s no surprise that AWS is investing heavily into the AWS Marketplace’s professional services capability, becoming yet another “everything store.”

Reflecting back to antiquity, consider the ancient Egyptians who deposited hard-earned coins into the world’s first coin-operated vending machine — a simple mechanism dispensing holy water. Today, businesses are equally eager to invest in the vast computing power offered by cloud platforms like AWS, Azure, and Google Cloud, viewing these investments as crucial to accessing the 'holy water' of modern IT — scalable, on-demand computing resources and services.

AWS, for example, is capitalizing on this by significantly enhancing the AWS Marketplace’s professional services capabilities, positioning itself at the forefront of this lucrative trend.

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For startups to large enterprises, MeasureMatch is the marketplace platform connecting business leaders with amazing consulting and professional services partners.

The Opportunity: A New Market Paradigm

Cloud marketplaces are not just new sales channels; they are transforming the very fabric of the IT services industry. They offer customers unprecedented access to a wide array of services with the convenience of on-demand, global reach and scalability, not to mention reduced overheads. For SIs and GSIs, the opportunity lies in leveraging these platforms to reach a large captive audience, streamline service delivery, and enhance operational efficiencies.

The allure of tapping into a marketplace that directs billions of dollars in IT spending is potent. It promises not just increased revenue but also a chance to solidify market presence in an increasingly digital ecosystem. 

The Threat: Adapt or Risk Obsolescence

However, the rise of cloud marketplaces is also a harbinger of disruption. Hyperscalers like AWS, Google, and Microsoft are setting new standards for how services are procured and managed, pressing SIs and GSIs to innovate or risk losing relevance. These platforms commoditize many traditional IT services, putting pressure on margins and intensifying competition.

The inherent fear for SIs and GSIs is clear: if they do not adapt to this new marketplace-centric world, they might lose their connection with customers, ceding ground to more agile competitors that can offer more straightforward, more cost-effective solutions via global marketplaces.

For SIs and GSIs, developing their own marketplaces can serve as a strategic move to harness control over their specialized offerings and tailor solutions more closely to customer needs, thereby creating distinctive value propositions that stand out from the competition.

Strategic Imperatives: Building, Buying, or Partnering

Facing these market dynamics, SIs and GSIs are compelled to make strategic moves. Developing their own self-serve professional services marketplaces is a compelling strategy. Such platforms can offer customized solutions and foster deeper customer engagement through enhanced user experiences. They also allow SIs and GSIs to own and control crucially important data generated from consulting/professional services engagements, a significant advantage over transacting through hyperscaler marketplaces.

Yet, building a marketplace is a resource-intensive endeavor. It demands substantial investment in technology and expertise. An alternative is to partner with third-party platforms like MeasureMatch's Atlas, which offers a ready-made infrastructure to jumpstart the presence in the marketplace arena without the overhead of building one from scratch.

Conclusion: Embracing the Inevitable Shift

For SIs and GSIs, the decision to invest in, deploy, and develop their own marketplace capabilities is not just a tactical move—it is strategic survival. In an era where business users increasingly expect a self-serve model akin to their consumer experience, SIs and GSIs must evolve to meet these demands. The transition towards marketplaces is not merely an option; it is an inevitable shift that must be navigated with both caution and ambition.

By embracing these platforms, either by creating their own or through partnerships, SIs and GSIs can redefine their business models, deliver enhanced value to their customers, and secure a competitive edge in a marketplace-driven future.

James Sandoval, MeasureMatch Founder & CEO

Founder & CEO of MeasureMatch

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