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Cloud marketplaces are being promoted with increasing vigour by a number of providers as a platform for cloud-based software and services from a variety of providers. But can they live up to the hype for resellers? Are they any issues channel partners need to be aware of before using cloud marketplaces? What should they look for in a “good” cloud marketplace? And what are the signs of a poor marketplace?
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Cloud marketplaces provide resellers with a one-stop shop for a number of suppliers’ products that can be rapidly deployed by customers. Chris Hill, EMEA director of business development at Barracuda, says they offer increased speed and flexibility for customers and allow resellers to extend into services that can be more profitable in the long run. The majority of customers would prefer to use a trusted reseller to help deploy cloud solutions so partners should use cloud marketplaces “to help them on their journey to becoming service providers” and to gain “an opportunity to build long-term successful relationships”.
Dave Stanley, managing director at Aditinet, lists lower cost to entry, a quicker sales cycle and less need for in-house technical resources as the main benefits of cloud marketplaces. The biggest value “is in the advisory expertise piece, and we see this come up time and again with channels. Ultimately, it’s unlikely that all services will go to the cloud. So this gives resellers the opportunity to offer professional advice around the prioritisation of cloud services - which should remain on premise, which should be hybrid and which should be cloud”.
Alex Raistrick, director for Western Europe at Rubrik, says cloud marketplaces enable resellers “to get their name known with their areas of specialisation in lights” and help smaller resellers “break into larger organisations simply by showing what specialist services they offer in a marketplace trusted by hundreds of customers”. But a potential pitfall is that they often have to share prices publicly “and show their hand in an environment where their competitors can also see that information. This could open up a bidding war, resulting in low margin business if the partner doesn’t articulate their skills and value well enough”.
One of the basic issues resellers need to address, according to Adam Eaton, sales director at Pulsant, is to make sure the marketplace they use has access to the cloud providers that customers want to use. “It is also critical to understand what the cloud marketplace provider is delivering to you as a service,” he adds. “Many will describe levels of automation and billing, but I would insist on a practical demonstration of available functionality.”
Value is important. Stanley at Aditinet argues that marketplaces reduce the amount of value the channel can offer, putting long-term revenues at risk. Marketplaces will alter the power dynamic between the cloud service provider and the customer. Eventually this “calls into question the need for the channel. The onus is on the channel to adapt to customer demands, respond to the marketplace and minimise dependency on revenue from legacy renewals to avoid being left in a vulnerable position,” he warns.
Dan Cavanagh, EMEA channel director at Nimble Storage, says marketplaces should “reward them both recurring (month-to-month options) or upfront (prepay option) fees. Such a capability provides the channel more ways to monetise cloud, but also allow customers to consume cloud with opex and capex budgets”. This also gives the channel migration strategies to and from the cloud to ensure customers can avoid cloud lock-in and ramp up or down cloud services based on their business demands.
Another area that resellers need to be aware of is differentiation, which could be a significant issue as cloud marketplaces become pervasive, says Eaton. “You need to understand what your differentiator is and how the store front you are planning on using allows you to gain customers through your differentiation,” he states.
Reza Honarmand, vice president, Cloud, EMEA at Tech Data, urges resellers using a cloud marketplace to “take care to ensure that the right people have access to it, as it could certainly change an organisation’s order process”. In addition, resellers should ensure “that they match their traditional billing systems to those of the cloud marketplace, so that when invoices are being produced, they are captured”.
Away from the possible pitfalls, what factors do resellers need to look for if they want to ensure they have chosen a good cloud marketplace? According to Stanley, it should “demonstrate a mature channel attitude and have clearly defined points where the channel can input value. White-label opportunities, clear marketing messages and communication of channel expertise will all be features too. What’s vital for a strong cloud marketplace is that the cloud initiative stays within compliance, GDPR guidelines and regulatory needs of the marketplace”.
Eaton adds that a good cloud marketplace can help resellers that don’t have the technical knowledge in-house to support some of the available cloud services. “A good cloud marketplace will be able to support you with your technical queries and remove from you the burden of dealing directly with the cloud providers,” he proclaims. “Provision of cloud services for your customers should be seamless, fast and require minimal input.”
So what do resellers need to look out for to avoid getting entangled with poor cloud marketplaces? Honarmand says good marketplaces can speed up processes and be as frictionless as possible. They can also deliver enhanced security, such as secure passwords and user data storage, but poorly designed marketplaces “could slow down (rather than speed up) processes and present increased risk if appropriate levels of security are not guaranteed, offering users a poor experience”.
According to Stanley, telltale signs of a poor marketplace “include vendors that mix messages and sell directly, via websites for instance”. In some cases, they might offer too many management options and try to solve problems in silos instead of taking advantage of the cloud to deliver a seamless platform to customers. “The power of the cloud is collaborative and designed to leverage lots of initiatives for customer benefits,” he says. “That’s what we need to see more of.”