Channel on way to accounting for majority of marketplace sales

The volume of digital marketplace sales flowing through the channel is continuing to rise as partners ensure they are widening their routes to customers.

Marketplaces are becoming one of the main routes to market for buyers, with the channel utilising multiple platforms that hyperscalers have developed over the past few years.

Jay McBain, chief analyst of channels, partners and ecosystems at Omdia, shared insights into the progress made by the channel around digital marketplaces, commenting on the significant volume of business that now flows via partners: “Partner-led marketplace sales are outpacing direct sales – more than half of all hyperscaler marketplace sales will flow through channel partners and distributors by next year. By 2030, the channel will account for almost 60% of $163bn in total hyperscaler marketplace sales.

“As the complexity of third-party vendor solutions sold through marketplaces increases, partners become even more critical to helping customers adopt this procurement model and burn down a portion of their committed cloud spend.”

He added that the importance of marketplaces was rising and would overtake the likes of customer relationship management (CRM) and partner management software as the key platform to work with prospects, stating: “Marketplaces will become the central control plane of the entire customer journey during the artificial intelligence era.”

One of the reasons for that shift is the emergence of millennial buyers who use marketplaces to research, consult and gain insights into their planned investments on their route to pulling the trigger on a purchase order. That momentum is increasing with the emergence of subscription billing and the preference by many users to work with that model, rather than opting for one-time purchases.

McBain said the channel needed to understand the ways of working with the likes of Amazon Web Services, Microsoft and Google to maximise their opportunities around marketplaces and pointed to the significant amounts of revenue that were flowing through those platforms as an indicator of the growing rewards for making the effort to get certified and approved as a marketplace seller.

“The billion-dollar marketplace club is now seeing several vendors reach over $3bn in annual marketplace sales,” he wrote in a social media post.

Speaking to MicroScope recently, Joe Carroll, UK&I director for partners at AWS, talked about the importance of the channel in providing customers with a wide range of purchasing and services options. He praised distribution for choosing to work closely with the likes of AWS to provide a gateway into marketplaces for vendors and partners looking to reach a wider customer base.

“The groups that are tapping into that opportunity[...] and have continued to grow in the space are distributors. Because we have thousands and thousands of partners in the UK alone, and each plays a slightly different role, the distributors help the many thousands to get onboarded, in terms of access to the services, and help with some of the billing mechanisms, and so on,” he said.

“Because there are tens of thousands of partners that are either small or mid-size, that’s where the distributors are playing a very critical role in helping with the skills, the financial management and the access.”