Boston Consulting Group (BCG) doesn’t go into operational details unless the financial stakes are high to warrant C-suite attention.

My read in 4 bullets (and how alliance leaders can act):

1️⃣ Software is eating the tech budget

BCG recent highlights:

“Software costs increased by 50% as a share of the total tech budget, from 13% in 2019 to 21% in 2024” and “software spending rose even faster” than the overall 6% annual IT budget growth.

So what:

Software is outpacing overall IT growth, forcing finance to rethink procurement. Software scale and complexity accelerate with AI.

2️⃣ Cloud infra costs are the hidden multiplier (& opportunity)

Insight:

“As companies scale applications that run on public cloud platforms such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, infrastructure costs rise accordingly.

Boosting the scalability and performance of many software solutions—including new GenAI offerings—requires increasing the amount of cloud resources available for data storage, compute power, and networking...”

So what:

Software purchases are driving significant cloud consumption that customers struggle to predict and manage. This creates natural alignment between ISVs and clouds.

3️⃣ Consumption pricing creates complexity (& opportunity)

Insight:

“Software vendors are also adopting newer consumption-based pricing models…. many companies are struggling to track consumption across the enterprise, increasing the risk of cost overruns.”

So what:

Enterprises lack visibility over consumption, creating friction in adoption. Vendors who bring clarity will win.

Result: Centralized governance is no longer optional

BCG advises to “create centralized oversight” and “manage all applications and contracts through a centralized system.”

Why marketplaces are the practical answer to all four:

• Unified buying + one invoice tied to cloud commits

• Native consumption tracking via hyperscaler billing

• Centralized control with standard terms/approvals

• TCO view of software + infra in one place

Playbook for Alliance Leaders:

With customers

• Position marketplace (MP) offers as budget-friendly vs. direct procurement

• Emphasize consolidation and spend tracking on MP

• Target allocated budgets with commit burn-down strategies

With hyperscalers

• Co-sell by showing how your solution drives cloud consumption

• Offer bundled solutions to simplify procurement conversation

BCG’s message: software cost, cloud consumption and governance now move together.

Your advantage is to meet all three—in one marketplace-led motion.

PS. Cloud commits hit $531B — your customers have budgets to spend on AWS, Azure & GCP marketplaces.

250+ alliance leaders from GitLab, Citrix, Wiz used our 5-week Cloud GTM Leader course (15 expert sessions) to turn marketplace into revenue.

Cohort 13 starts Nov 18 (tomorrow) - join us