Hi, it's Roman and welcome back to the Partner Insight newsletter!
Want to know how ServiceNow and Accenture are driving billion-dollar growth with cloud GTM and AI? Or how Okta scaled its AWS Marketplace revenue to tens of millions? We've distilled their winning formulas into actionable insights.
Plus, you can learn to apply these strategies yourself in our Cloud GTM Leader Course starting Sept 10th. Scroll down for an exclusive subscriber promo code - don't miss out!
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$8.7B revenue engine: How ServiceNow masters cloud GTM
Bill McDermott, ServiceNow's CEO, doesn't mince words when it comes to hyperscalers: "We integrate with all of them."
This partnership strategy is paying off big time - they closed seven $1M+ migration deals on Azure in Q2 alone, including a $30M new logo win.
Here's how this SaaS giant is leveraging cloud GTM and partnerships to drive growth:
Co-selling: The New Superpower
CEO recently highlighted their Microsoft partnership "that opened additional addressable market for ServiceNow", because "Azure exposes us to a much wider spectrum of customers".
ServiceNow has developed a powerful co-sell motion with Microsoft's Enterprise sales team, driving significant deal flow.
In Q2 alone, ServiceNow won several new logos, closing 7 Azure deals with >$1M ACV. For perspective, in Q2 2023, ServiceNow had only 1 net new logo deal >$1M in total.
AI as Large Deals Accelerant
GenAI is proving to be a incredible catalyst for ServiceNow. Its gen AI feature Now Assist enhances productivity of employees, agents, developers, etc.
McDermott highlights, “Now Assist net new ACV doubled quarter-over-quarter, significantly overachieving our expectations, and it became the fastest-growing new product in the company's history.”
He adds that they signed 11 Now Assist deals with >$1M Net New ACV in Q2, two of which were >$5M.
This rapid adoption underscores the customer value of AI solutions.
Ecosystem Activation for Growth
Currently, 21% of ServiceNow's revenue comes from indirect sales, but the company sees major potential in doubling down on partners.
CFO Gina Mastantuono emphasized: "we're working now really strongly with our partners and the ecosystem to arm them with the tools to sell, and that's going to extend our go-to-market reach even broader.Those partners are so critical and so important, and they are leaning in very heavily with us."
This partner focus likely contributed to ServiceNow's 26% YoY increase in >$1M+ deals, from 70 to 88 in the last quarter.
Geo Expansion via Partnerships
ServiceNow is also using cloud partnerships to enter new markets. They announced plans to launch a ServiceNow UAE Cloud hosted on Microsoft Azure to meet local business transformation needs.
The company also made several growth investments in its partner ecosystem in India.
This strategic approach fuels their international business growth, with ACV for non-US markets projected to reach $5Bn in 2024, up from $2.7Bn in 2021.
The results speak for themselves:
ServiceNow reached $8.7B ARR in 2023 and is continuing growing 23%. It’s among a few SaaS companies whose shares are up this year. Their strategic approach to cloud GTM is clearly a key driver of this growth.
As you reflect on ServiceNow's strategy, consider how can you apply these tactics to your own cloud GTM and partnerships?
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Member Spotlight: Cloud GTM Leader Course
Delighted to share insights from Segev Ben-Zur, a standout alum of our course, who leads Cloud Marketplace operations at Check Point Software. Segev explained why customers prefer buying via marketplaces, the KPIs he tracks and more:
Experience with Cloud Marketplaces
I started my Cloud Alliances journey at CONNACT, a Cloud GTM consulting agency, where I learned to leverage hyperscalers’ momentum, drive deals, marketing and build partner programs.
Understanding fundamentals, I saw immense growth opportunities in cloud alliances and knew this was where I wanted to focus.
Why Cloud GTM is essential
CSP marketplaces are often seen as procurement tools, but I propose a different perspective. Marketplaces benefit from momentum driven by ISVs and Partners, so Hyperscalers offer incentives to boost marketplace purchases.
Companies that capitalize on this momentum position themselves for substantial growth.
Why do your customers use marketplaces?
Customers aim to maximize cloud investments while streamlining procurement, subscriptions and invoice management in one place.
Marketplaces manage licenses, procurement and maintenance of cloud products from multiple providers, offering a seamless experience.
How long did it take to see results?
Given Check Point's prominent position in the cybersecurity industry, our growth in the marketplace was swift. After releasing our first products to marketplaces, customers quickly embraced purchasing there.
This immediate uptake showed the trust and recognition Check Point enjoys as a leading security ISV.
Has Cloud GTM helped you reach new customers or expand?
Cloud marketplaces enable smaller customers to adopt our products early through a PAYG model. This fosters mutual growth as we integrate into their security infrastructure and support their development.
Larger customers prefer using their committed cloud spend and request to transact deals via CSP marketplaces, through CPPO. Our ability to sell on these platforms lets us cater to our customers' preferred purchasing methods, resulting in faster deal closures.
What KPIs do you use to measure success?
We measured success by several KPIs:
increase in the number of deals through Partner-Led and public marketplace offers
growth of deal sizes in private offers
frequency of recurring renewals via marketplace
How do you enable your company on Cloud GTM?
Not everyone in the organization fully understands the benefits of cloud GTM. To address this, I created a comprehensive presentation that explains marketplace fundamentals, different offer types, growth data, and stakeholder benefits.
The highlight of the course for me was the Mastermind session. Participating in in-depth discussions about industry challenges, innovative ideas, and recent developments with course instructors and peers from various companies was highly educational.
The insights and strategies gained were immediately applicable to my role, making a significant impact on my daily work
RK: Learn more about Cloud GTM course here. Our Cohort 7 kicks off on Sept 10th.
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Accenture's Growth Strategy: 80% Potential in Cloud and AI is Untapped
"Which GSI do you believe to be most influential as cloud and AI advisory?" a VP of Alliances asked me recently. My response? Take a closer look at Accenture's trajectory.
Cloud growth to $32Bn+ revenue with 80% of its potential ahead
Accenture's cloud business has been growing at an impressive 36% CAGR over the last decade, reaching $32Bn in FY23.
It continues to grow double-digits in 2024 YTD, as the company reports an increase in large-scale transformation projects that combine cloud migration with AI implementation.
And there's still massive potential - Accenture Research suggests that while 25-40% of workloads have moved to the cloud, only 20% have been modernized.
That means 80% of the cloud adoption opportunity is still ahead of us.
AI is Driving 5X Growth with 90% of potential untapped
But the real growth story is in AI, particularly Gen AI.
“GenAI is acting as a catalyst for companies to more aggressively go after cost, build digital core and truly change the ways they work, which creates significant opportunity," explains Julie Sweet, Accenture's CEO.
Accenture is leaning hard into this opportunity, growing their new GenAI bookings by 5X year-over-year. “With over $900 million in new GenAI bookings this quarter, we now have $2 billion in GenAI sales year to date, and we have also achieved $500 million in revenue year to date.
This compares to approximately $300 million in sales and roughly $100 million in revenue from GenAI in FY23.” Sweet elaborates.
While most GenAI projects are still in the experimentation phase, the potential is staggering.
GenAI is expected to be a $1.3T market by 2032 (Bloomberg). Yet 46% of CXOs view getting the data strategy right as their top issue, and 32% rank talent scarcity as a key concern.
Accenture is addressing this head-on, aiming to double its own AI talent to 80,000 in 2024. They seems to be on track with 55K this summer.
Ecosystem Partnerships as a Differentiator
What sets Accenture apart is its "privileged position in the technology ecosystem," as it works closely with partners to help clients understand the right data and AI backbone to get to "tangible business value."
Accenture continues to strengthen its partnerships with cloud hyperscalers (e.g., Amazon Web Services (AWS), Microsoft Azure , Google Cloud) as part of its growth strategy.
In Q3 FY24, Accenture reported $8Bn in managed services revenues, an increase of 4% YoY. Managed services, which includes cloud services, continues to be a significant contributor to Accenture's revenue.
💡 The key takeaways?
AI is the new growth frontier, while cloud remains its crucial foundation. And ecosystem partnerships are more critical than ever in delivering real value.
The question is, how will other GSIs and service position themselves in this rapidly evolving tech ecosystem? The race is on.
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How Do Companies Scale Cloud GTM?
Daniel Roppert, a cloud and tech alliances leader, successfully scaled Okta's Cloud GTM in EMEA, driving AWS Marketplace (MP) revenue to tens of millions in ARR over four years.
In our Cloud GTM Leader Course, Daniel shared how to transition from early adopter to marketplace maturity in cloud strategies. Simon Church helped to distill Daniel’s insights:
6 Lessons from Scaling
1️⃣ Navigating Marketplaces
Enablement, thought leadership, and learning from both successes and mistakes are crucial parts of the process.
2️⃣ Initial Focus
Select the right marketplace and achieve top-tier partner status before scaling. AWS complemented existing high-scale, resource-heavy projects. Committing to AWS requires substantial pre-work to launch.
3️⃣ Strategic Focus
Focus deeply on one marketplace rather than spreading across many. Differentiate by aiming for high-level partnerships and demonstrating unique value. Begin co-selling post-launch, leveraging customer stories to align with AWS Account Executives. Implement automation as co-sell deals increase.
4️⃣ Scaling Strategies
Co-selling and co-marketing are essential for scaling. Ensure sales leaders are invested in the partnership. Prioritize selling solutions (not products), especially in vertical industries, by collaborating with partners.
5️⃣ Top-Tier Partnership
Achieving the highest partner level unlocks growth opportunities. Make the AWS partnership strategic, not transactional. Avoid entering Strategic Collaboration Agreements too early to retain future flexibility.
6️⃣ Enablement
Strong enablement strategies are vital to supporting cloud MP scaling.
Achieving Scalable Growth
Achieving scalable growth through Cloud Marketplaces requires continuous enablement, streamlining sales processes, and cross-functional collaboration:
Continuous Enablement
Regularly refresh training, especially for new hires, to ensure understanding of AWS and partnership value. Embed enablement in onboarding to avoid redundancy and keep teams updated.
Standardized Processes
Integrate MP transactions into standard processes. Use tools like Salesforce to automate transactions, easing the burden on AEs.
Scalability and Efficiency
Introduce a "cloud desk" or subject matter experts to handle MP inquiries, reducing individual seller workload. Implement global teams and use platforms like Slack for real-time support. More on Cloud Desk is here.
Cross-Functional Collaboration
Involve operations, deal desk, marketing, and customer success in enablement to create a cohesive approach. Integrate cloud MP strategies into existing processes.
Effective Communication
Use win wires to share success stories internally and with AWS. Focus on unique deals to maintain engagement. Tailor communication to relevant verticals and stakeholders for maximum impact.
Organizational Change
Prepare for organizational change when integrating cloud MP strategies. Early integration and relinquishing some control can facilitate scaling. Ensure all teams understand their roles in new processes for smooth transitions and sustained growth.
RK: Check my previous newsletter to learn more on how to do enablement right.
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📈 Accelerate your Growth in Cloud Marketplaces
Transform your marketplace strategy with first-hand insights from Cloud GTM leaders in our 5-week cohort course. Learn in a community of great alliance leaders. Join 100+ alums from companies like GitLab, Darktrace, IDC and others.
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