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Canalys: Channel involvement with marketplaces will grow

Rather than bypassing partners, the penny is dropping that involving more will add more value and help meet a wider range of customer demands

Increasingly, the large hyperscalers are recognising that successful cloud marketplaces need to involve the channel.

Marketplaces have the potential to concern the channel, with many worried they suck away spending that could have gone through partners, but they are an increasingly popular route to market that need to be included in the indirect model.

Alastair Edwards, chief analyst at Canalys, said that the business going through marketplaces had continued to rise, with more customers looking to leverage their committed cloud spend to cover third-party products hosted on those platforms.

The analyst house is expecting marketplaces to be the fastest growing market for cyber security and software this year, with that presenting an opportunity for the channel.

But it’s not just those product categories which are experiencing growth, with customers “seeking to purchase across a whole range of technologies, cyber security, storage, infrastructure and so on”.

Edwards said a trend was clearly emerging around the attitude of the large cloud players, including Microsoft, AWS and Google, along with other vendors, towards the channel’s involvement with marketplaces.

“The hyperscalers and the vendors selling through these marketplaces have recognised that the success of this model is increasingly and critically tied to involving partners,” he said. “Already we see that 30% of marketplace transactions involve a channel partner, and we expect that to grow. The reason is because more complex technology has been sourced this way. Customers are looking for advice in terms of finding the right solutions, discovering those solutions, but also implementing, integrating, managing and securing those they’re looking for partners to help with this.”

Positive signs

There had been fears that distribution would fall victim to marketplaces, but the experience of the past year has been encouragingly positive. “Distributors are now playing a more critical role in these marketplaces, managing in particular currencies, for example, taking the friction out of these transactions,” he said. “The hyperscalers are recognising this in their programmes.”

He added that through the use of open APIs and more automation tools – plus closer integration across the network of marketplaces, from hyper scalers, vendors, distributors and resellers themselves – meant they would work together more effectively in the future.

Edwards urged the channel to engage with marketplaces and understand the role that they could play within those routes to market. “Your value is not in the marketplace, your value is still engaging with customers and having those relationships throughout the lifecycle of those technologies,” he said. “That’s your value.”

Marketplaces were one of the themes of the Canalys Channel Forum over the past couple of days, with several vendors keen to underline their commitment to involving the channel.

A Microsoft spokesman said the vendor had always been clear the channel was an essential part of its marketplace.

“Every distributor ... that we met and we’re meeting all the time know that our strategy is to empower them more and more to make sure that we are reaching our customers more,” they said.

Another vendor said the channel had control over their “store fronts” and there had always been an ambition to promote the addition of partners to highlight the value they could offer customers.

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