Forrester: Buying Through AWS Marketplace Creates Important Outcomes

Buying through the AWS Marketplace improves organizations’ procurement processes, reduces licensing costs and improves vendor onboarding — all important outcomes for partners to show to customers.

That’s according to new research, “The Total Economic Impact of AWS Marketplace,” from Forrester, commissioned by Amazon Web Services.

When it comes to procurement, the companies Forrester interviewed saw a combined $2 million in efficiency savings. That’s because purchasing through AWS Marketplace led to consolidated invoicing and less time (50% less) spent on low-value tasks, according to Forrester.

Similarly, shifting from a perpetual licensing model to a dynamic one let interviewees negotiate better terms. That created a 10% drop in licensing costs, Forrester noted in its report.

Finally, bringing new vendors into the fold gets easier through a cloud marketplace — the AWS marketplace, in particular, Forrester discovered. As a result, organizations experience a 75% reduction in onboarding effort for new vendors, per the report.

All in all, channel partners can use the findings as they team up with cloud marketplaces, or craft procurement strategies for clients. Each of the public and private cloud providers — AWS, Microsoft Azure, Google Cloud, Oracle Cloud, VMware Cloud, IBM Cloud, etc. — has its own marketplace. Then there are independent companies — Ingram Micro, Pax8, D&H and more — that aggregate a range of capabilities so partners get a wide selection.

Forrester’s Liz Herbert

As Liz Herbert, vice president, principal analyst at Forrester, wrote in a 2019 report, “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.”

ISVs and Their Partners Benefit From the Cloud Marketplace, Too

Another new piece of research from Forrester, “The Partner Opportunity for AWS Marketplace ISVs,” mainly assesses contributions for and from independent software vendors — think companies such as Snowflake, MongoDB, CrowdStrike.

Of course, in the Channel Futures realm, partners view businesses such as these as providers rather than peers. Managed service providers, resellers, consultants and other partners join those firms’ respective partner programs to sell their platforms and products. As such, the new research focusing on the benefits of the AWS Marketplace points to more of a trickle-down effect for most Channel Futures readers.

And what effects might those be? Forrester cited 80% larger deals, 27% higher sales closing rates, accelerated sales cycles and a bigger pipeline for ISVs using AWS Marketplace.

Again, in a trickle-down way, those figures and benefits apply to channel partners who sell through ISVs.

Crowdstrike’s Michael Rogers

With that in mind, Michael Rogers, vice president of global alliances at CrowdStrike, told us that channel pros can expect the following takeaways from Forrester’s AWS ISV-specific research: “Marketplaces are the future for consolidation of services and technology – it’s easy for vendors to get what they want, and customers like it because it’s fast and integrated with their existing AWS services. In addition, for partners and resellers there is significant growth opportunity by embracing the marketplaces early on.”

Herbert noted the same in her report three years ago.

In addition, it’s worth emphasizing that channel partners still relying on access, assembly and installation need to incorporate at least some cloud marketplace acumen into their businesses. Otherwise, as Herbert warned in 2019, they “won’t survive the shift to marketplaces … 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.”

AWS’ Take on the Forrester Findings

All in all, for MSPs, resellers and other partners working with AWS, Forrester’s research tells “a really good-news story.”

AWS’ Whit Crump

That’s the word from Whit Crump, who oversees channels and customer programs for AWS Marketplace in the Americas.

“I think these studies help provide evidence that we are on the right track, providing value to the ISV and to the end customer,” he told Channel Futures.

And for channel partners sitting in between AWS and the ISV? It’s just more good news, Crump said.

“Customers want to go faster and save money in the process. … If you’re planning for the future, I would view Marketplace as an additional channel to meet the customer where they want to be.”