- April 25, 2024
- Posted by: Channelnomics
- Category: Blogs
Success selling through hyperscaler marketplaces isn’t automatic; it requires planning, investment, and effort. Here are some tips for maximizing their value return.
Here’s the thing about hyperscalers: They’re the black holes of IT buying and the channel. While that comparison may seem negative, it’s not intended that way. Black holes have an inescapable gravitational pull. So do hyperscalers, and the source of that gravity is both the economic benefits and the desire of buyers.
According to Gartner, 83% of B2B buyers want to purchase through a marketplace or a hyperscaler. Millennials (28 to 43 years old) and Gen Z (18 to 27) predominantly want to buy through marketplaces and digital sales platforms. The reasons are simple:
- Convenience: It’s just easier.
- Self-Pacing: Buyers can peruse the vendors and products listed in the marketplace at their leisure; they use the marketplace as a discovery and educational resource.
- Low Friction: Many buyers — particularly millennials and Gen Zs — want to talk less with salespeople and have the Amazon Experience in their work life.
- Economics: Customers can retire their cloud spending commitments with hyperscalers by purchasing third-party applications and services hosted on their platforms.
From a vendor perspective, hyperscalers and marketplaces offer an unprecedented opportunity to thrive, even while you’re sleeping. They see the economic appeal to customers and are witnessing sales values soaring into the range of seven figures per transaction.
However, selling through hyperscalers isn’t easy. It requires meticulous planning, adapting processes and resources, embracing new selling techniques, and adjusting expectations so that they’re distinct from those of traditional channels.
So, how can vendors more effectively work with hyperscalers like Amazon Web Services, Microsoft Azure, Google Cloud, and Oracle Cloud? Here are six tips to start with:
- Define Your Expectations & Objectives
Selling through hyperscalers isn’t an automatic guarantee of success. Even if the hyperscalers say your product is a perfect fit for their catalog and fills a gap, you’ll still need to set clear expectations — internally and externally — for what you’re hoping to achieve through sales. Recognize that selling through hyperscalers is often incremental over time but also starts with a share shift.
- Select the Right Products
Just because you can sell products through hyperscalers doesn’t mean you should sell all your products through them. You should select the products that have the best adjacencies and applicability to your target customers’ cloud resources. Customers are more apt to engage with products that add accretive value to their existing cloud services on hyperscaler marketplaces.
- Define the Role of Your Partners
Selling through hyperscalers often comes with channel conflict. Remember that hyperscaler marketplace sales often start as share shifts from traditional channels. Customers will gravitate toward hyperscalers if they perceive a benefit, such as retiring cloud spending commitments. You should establish roles for your partners, rules of engagement, and mechanisms — such as private offers — that will enable traditional integrators and resellers to participate in the hyperscaler sales process.
- Offer Sales Resources & Support
Many vendors leverage private offers — sales agreements that enable partners to sell through hyperscaler marketplaces at off-list prices. Vendors must define the eligibility of partners to participate in hyperscaler sales and create frictionless processes to facilitate the private-offer process. This means creating teams and resources to manage this process. Additionally, hyperscalers often require vendors to provide technical support for their products; passing those service opportunities to partners isn’t easy. You’ll need separate policies and processes for that too.
- Leverage Marketing & Co-Selling Resources
Hyperscalers want your business and the business of your partners and customers. They’re willing to invest in business development, marketing funds, and co-selling. Hyperscaler marketplaces’ sales teams will actively sell your products if there’s a benefit to their quota retirement. You should establish strategies that both engage with hyperscaler sales resources and leverage the marketing support they can provide.
- Measure, Report, Adjust & Expand
Nothing should exist in a vacuum. Just as you do with direct and channel sales, you should establish a set of key performance metrics, routinely measure performance, adjust your product mix and resources, and expand participation accordingly.
There’s much more we could discuss regarding hyperscaler strategies and practices. Channelnomics has several resources to help you navigate the hyperscaler marketplace journey. I encourage you to take a look and contact us to help guide your hyperscaler relationship development.
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