How significant are š° commitments that enterprises make to the cloud?
Take MongoDB - it committed hundreds of millions.
Here is a breakdown & why this matters if you use cloud marketplaces.
Earlier this year, MongoDB disclosed it has over $1B in commitments to "subscriptions, marketing services, and cloud infrastructure capacity." While these cloud commitments are bundled with other services, itās fairly obvious that they constitute the majority of this $1.16Bn.
Why?
š One cloud contract MongoDB signed in 2023 alone is worth $300M
āSubsequent to January 31, 2023, the Company expanded its enterprise partnership arrangement with a cloud infrastructure provider that includes a non-cancelable commitment of $300 million over the next five years, commencing in March 2023ā - company shared.
3ļøā£ Reasons Why Cloud Commitments Matter:
āļø Commitments are binding contracts
MongoDB explains: āour non-cancelable multi-year cloud infrastructure capacity commitments, which require us to pay for such capacity irrespective of actual usage.ā
āļø Most Enterprises have Commits
For those in cloud alliances or leveraging cloud marketplaces, these trends are significant. Most enterprises are likely to have similar commitments with at least one, often two hyperscalers.
āļø Enterprises Spend Commitments via Marketplaces
A strategic advantage that hyperscalers created for companies: the ability to use commits to buy third-party SaaS products via cloud marketplaces. Why? Because this not only drives their cloud consumption but also creates stickiness and a network effect for cloud platforms.
š MongoDB's 5X Growth on AWS Marketplace
MongoDB itself knows very well how to leverage cloud marketplaces.
Ruba Borno, VP of WW Channels & Alliances at AWS highlighted at re:Invent 23:
āMongoDB self-service via the AWS Marketplace business has become a strategic channel.
Over the past 18 months their self-service business via the AWS Marketplace has seen an exponential growth rate of more than 5 times!ā
š MongoDB Expanded Cloud Partnerships & Marketplace Leverage
In 2023, MongoDB expanded its partnerships with all three major cloud providers (AWS, GCP, and Microsoft Azure) to enhance co-marketing, deliver technology integrations that benefit customers, and align with sales strategies.
āDuring 2023 we expanded our strategic partnership with Microsoft, to make it easier for customers to access MongoDB Atlas within the Microsoft commercial marketplace.
We announced plans to integrate MongoDB Atlas Vector Search with Amazon Bedrock, a fully managed service that enables developers to build and scale generative AI applications. We also launched an AI initiative with GCPā¦ā
See the flywheel effect by now?
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