Why sell through cloud hyperscalers' marketplaces? Because they're sitting on $240+ billion of committed spend 💰 from their customers - spend that could be directed to buying your software and services. Let me explain.
While many enterprises grapple with a cash crunch, they have to honor multi-year commitments to their cloud providers to maintain their discounts.
Here's the trick: if they buy your SaaS via the Google Cloud marketplace, their spend goes towards these commitments.
💳 Effectively, they're purchasing your product with pre-allocated cloud services funds. It's a quick win for everyone involved, accelerating procurement timelines from months to days.
And there's the bonus of simplified billing for the customer - one invoice from Google, with your product neatly listed among other services.
The same benefits apply to AWS and Microsoft Cloud, though with some additional considerations for the types of products or services that can count towards reducing commitments.
💎 Now let's break down the impressive $240 billion+ commitment across the big three hyperscalers, as of March 31, 2023:
💲 Google Cloud
Commits: $61.7 Bn
Expected to be realized: 50% within the next 2 yrs, and the rest after.
“As of March 31, 2023, we had $61.7 billion of remaining performance obligations (“revenue backlog”), primarily related to Google Cloud. Our revenue backlog represents commitments in customer contracts for future services that have not yet been recognized as revenue…”
💲💲 Amazon Web Services (AWS)
Commits: $122 Bn
Expected to be realized: over a weighted-average term of 3.9 years.
“We have performance obligations, primarily related to AWS, associated with commitments in customer contracts for future services…those commitments not yet recognized were $122.0 billion as of March 31, 2023”
💲💲 Microsoft
Estimated Commits: $80-120 Bn.
A bit more complex, given MSFT discloses the full figure across their wide range of services. But if we take 41% (their cloud services' share of total revenue) of their total $196 billion commercial B2B backlog, we arrive at ~$80 Bn. The real figure is likely higher due to Azure's larger share in commits.
“Revenue allocated to remaining performance obligations, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods, was $201 billion as of March 31, 2023, of which $196 billion is related to the commercial portion of revenue.”
💡 Selling via the hyperscalers' marketplaces taps into a massive pot of already-pledged money. It simplifies purchasing for your customers and positions your product in a trusted marketplace.
It’s a strategic move that can significantly bolster your go-to-market strategy.
Have you tried already?
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