Cloud marketplace dynamics reshaping partner success in 2025

2024 marked a watershed moment for cloud marketplaces. From experimental channels to mainstream procurement platforms, and now ecosystem enablers for enterprise tech, the transformation has been remarkable. Enterprises are embracing not just the agility, scalability, and cost efficiencies these marketplaces offer, but also the product innovation and solution completeness from partnering within the marketplace ecosystem. 

Adding momentum to this shift, all three hyperscalers—AWS, Azure, and GCP—unveiled groundbreaking launches that elevated the marketplace experience. AWS introduced its "Buy with AWS" feature, redefining seamless discovery and procurement. GCP launched its AI-powered Partner Marketing Studio, while Azure rolled out the Marketplace Transact and Grow Campaign, encouraging partners to publish solutions and scale their businesses. 

Enterprise cloud commitments with the three hyperscalers have now surged past $380 billion.

As we progress through 2025, the landscape of cloud marketplace partnerships is poised for significant transformation. We spoke with Ashish Vora, a marketplace thought leader and former executive at Confluent and Google, to get his insights on how ISVs and hyperscalers can prepare for shifts that will redefine their collaboration.

The ISV Perspective: Embracing the marketplace as the default

By 2025, successful ISVs will need to position cloud marketplaces as the primary vehicle for transactions rather than a last-minute procurement option. This paradigm shift will require a comprehensive strategy overhaul:

1. Streamlining the marketplace experience

ISVs must systematically identify and eliminate friction points that get in the way of marketplace transactions. This involves a multi-faceted approach to ensure smooth operations. 

• First, sales compensation models need to be aligned to ensure neutrality between direct and marketplace transactions, or even incentivize marketplace sales. This will encourage sales teams to promote marketplace options more actively. 

• Second, ISVs should address any product limitations that might force customers to procure directly instead of through the marketplace. This may involve re-engineering certain aspects of their offerings to make them more marketplace-friendly. 
• Lastly, developing dedicated Marketplace Operations teams will be crucial to manage and optimize the entire process, from listing to transaction fulfillment. Marketplace operations will need to have defined ownership and cross-functional synergy. To facilitate this, GTM leaders are increasingly beginning to leverage cloud sales automation platforms to automate, track, manage, and execute cloud sales operations. 

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2. Data-driven decision making

To justify the investment in marketplace operations, ISVs will need to leverage accurate data insights. This requires a comprehensive approach to data collection and analysis. ISVs should instrument their CRM and revenue systems to capture detailed data on deal win rates, sales cycle times, and revenue/consumption growth for both direct and marketplace scenarios. This granular level of data will provide a clear picture of the impact of marketplace transactions on the business. A deeper understanding of this data will help ISVs understand the true impact of marketplace transactions beyond just the surface-level metrics. This could include examining customer lifetime value, cross-sell opportunities, and the effect on customer acquisition costs. This will also help partnership and alliance leaders obtain and customize the right KPIs to present each functional head, making it much easier to drive alignment. 

3. Seller enablement

ISV sales teams will need to become marketplace experts to drive success in this new landscape. This involves a comprehensive training and enablement program. Sales representatives should be trained to position marketplace transactions as the default option from the outset of sales cycles. This means understanding the benefits of marketplace transactions not just for the ISV, but also for the customer, and being able to articulate these advantages convincingly. Additionally, sales teams need to be equipped with the tools and knowledge to navigate marketplace processes efficiently. This could include familiarity with marketplace-specific pricing models, an understanding of procurement processes through cloud marketplaces, and the ability to address common customer concerns about marketplace transactions.

The hyperscaler perspective: Balancing growth and inclusivity

Hyperscalers face the challenge of maintaining marketplace growth while ensuring a diverse ecosystem of ISV partners. Here's what we can expect:

1. Addressing marketplace stratification

By 2025, we'll likely see increased stratification among ISVs on marketplaces. On the one hand, a handful of ISVs characterized by specific traits will find themselves dominating marketplace revenue. These ISVs will likely offer solutions that are significantly differentiated even from the hyperscaler's first-party solutions, appealing to a broad base of the hyperscaler's customers. These top-tier ISVs will also command high average selling prices (ASPs) making them especially valuable to the marketplace ecosystem. Another throughline between these ISVs - they strongly demonstrate a strong commitment to marketplace alignment, fully embracing the platform as a core part of their go-to-market strategy.

On the other hand, to counter this trend and maintain a diverse ecosystem, hyperscalers will need to take proactive steps – and they are. AWS, Azure and GCP have begun to develop strategies to make marketplace investment attractive for smaller ISVs, offering additional support, resources, or incentives to these partners. From AWS’ Business Outcomes Xcelerator (BOX) Program to GCP’s AI start-up program, efforts are underway to democratize the marketplaces – and ISVs need to grab the opportunity now.

2. Enhancing discovery and user experience

One of the consistent challenges across the marketplaces remains that they are still fairly basic in their capabilities around fostering discoverability and trial of third party offerings. Marketplaces still primarily operate as the equivalent of a digital shopping mall, and the marketplace discovery experience is not much more sophisticated than the average "mall directory" poster.

There is immense opportunity for the hyperscalers to enhance and streamline discovery capabilities in the context of customers' typical buying journeys of Awareness -> Education -> Trial -> Purchase.  From an awareness perspective, hyperscalers can significantly increase contextualized and personalized discovery by leveraging AI-powered recommendation engines that analyze customers' infrastructure environments and recommend relevant third-party solutions. Improved natural-language search capabilities that allow customers to describe business problems and be intelligently matched to relevant ISV offerings would be a powerful demonstration of the hyperscaler's GenAI capabilities. From an education and trial perspective, there is an opportunity to more tightly integrate ISV solutions into learning platforms like AWS GameDays or Google Cloud's Qwiklabs. This will allow prospects to get a hands-on opportunity to experience third-party software in realistic environments before making purchase decisions.

3. Fostering Innovation in Partnership Models

To stay competitive, hyperscalers may explore new partnership models that go beyond traditional marketplace relationships. One approach could be co-development initiatives that combine hyperscaler infrastructure with ISV expertise. This could lead to unique, tightly integrated solutions that leverage the strengths of both parties. Another possibility is the introduction of revenue-sharing models that incentivize both parties to drive the adoption and usage of ISV solutions on the marketplace. This aligns the interests of the hyperscaler and the ISV more closely, encouraging collaborative growth. Hyperscalers will likely also double down on joint go-to-market strategies that leverage the strengths of both hyperscalers and ISVs. This could be combined sales efforts, shared marketing campaigns, or co-branded solution offerings that present a unified value proposition to customers.

Strategic considerations for alliance and partnership leaders

As the marketplace momentum continues through 2025, alliance and partnership leaders should consider preparing their org not just in terms of strategy and operations, but also mindset. 

1. Invest in marketplace expertise

Building a team with deep knowledge of marketplace dynamics, pricing strategies, and technical integration requirements will be crucial for success in the evolving cloud marketplace landscape. This team should be able to navigate the complexities of different marketplace platforms and maintain close relationships with hyperscaler partners.

2. Develop a data strategy

Implementing systems to track and analyze marketplace performance metrics will be key to making informed decisions. Like we saw above, this involves not just collecting data, but also developing the capability to derive meaningful insights from it. Using these data insights to inform decision-making around resource allocation and partnership priorities will be crucial. 

3. Align internal stakeholders

Working with sales, product, and finance teams to ensure marketplace alignment across the organization is critical for success. And so is developing an internal education program to build marketplace literacy. This could include regular training sessions, the creation of internal knowledge bases, and possibly certification programs to ensure that all relevant teams understand the importance and mechanics of marketplace transactions.

4. Cultivate strategic relationships

Building deep relationships with key hyperscaler partners to gain early access to new marketplace features and co-innovation opportunities can provide a significant competitive advantage. Another strategy to consider is exploring partnerships with complementary ISVs to create bundled offerings or integrated solutions. These partnerships can lead to unique value propositions that stand out in the marketplace and appeal to customers looking for comprehensive solutions.

5. Embrace flexibility

Designing partnership strategies that can adapt to changing marketplace dynamics and customer preferences is crucial in a rapidly evolving ecosystem. This involves creating flexible partnership agreements, being open to new business models, and maintaining the agility to pivot strategies as needed. 

The future of cloud marketplace partnerships is bright, but it will require strategic foresight, continuous adaptation, and a commitment to collaboration. Those who can navigate these changes effectively will find themselves at the forefront of the next wave of cloud innovation.

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