Top Takeaways from Unlocking the Channel Opportunity: Strategies for Marketplace Success

If you missed the recent webinar on unlocking the channel opportunity, don't worry, we've got you covered! This session covered how to activate the Microsoft commercial marketplace for your go-to-market strategy and explored best practices for maximizing the marketplace opportunity, with an emphasis on collaborative selling with other partners. Here are some of the top takeaways from the presentation by Kristen Maddox and Jason Rook, from Microsoft's marketplace team. 

• The cloud marketplace is a huge and growing opportunity for ISVs and partners, with an estimated value of $50 billion by 2025. Some of the drivers of this growth include the shift to modern procurement, the cost and efficiency benefits for ISVs and customers, and the ecosystem and co-selling advantages.

• The marketplace helps ISVs reach every Microsoft customer, simplify sales by handling global commerce, and unlock growth by accessing the Microsoft partner and field ecosystem.

  • By publishing your app on the marketplace, you can expose it to millions of Microsoft customers who are looking for cloud solutions that work with Microsoft products and services.

  • By selling your app through the marketplace, you can leverage Microsoft's billing and payment infrastructure, which supports over 140 markets and 17 currencies, and reduces your operational overhead and complexity.

  • By partnering with Microsoft, you can access the Microsoft partner ecosystem, which consists of over 400,000 partners who can resell, co-sell, or integrate your app with their solutions. You can also access the Microsoft field sellers, who are incentivized to co-sell your app with Microsoft products and services, and who can help you reach enterprise customers and close larger deals.

  • For ISVs, marketplace can help lower COGS, increase deal velocity, lower deal friction, and expand reach.

• The marketplace also helps customers increase efficiency, buy confidently, and spend smarter by using their cloud commitments to purchase third-party solutions. Through marketplace, customers can:

  • Find and buy solutions that are compatible with their Microsoft cloud products and services, such as Azure, M365, or Teams, and that meet their business needs and industry standards.

  • Reduce the vendor onboarding and procurement processes by buying from Microsoft as a trusted provider and using their existing contracts and billing methods.

  • Leverage their Azure consumption commitments, which are pre-paid cloud spend that they agree to with Microsoft, to buy third-party solutions from the marketplace and get discounts or incentives.

  • Optimize their cloud spend by having better visibility and control over their usage and costs, and by choosing the best pricing and licensing options for their solutions.

• There are three paths for ISVs to get their solutions to customers through the marketplace: 

  • Digital direct is when the ISV publishes their solution and the customer buys it from the marketplace, either at list price or with a private offer. With this path, you embrace the marketplace as an extension of your go-to-market strategy.

    • Selling direct through the marketplace can help ISVs reach more customers, especially those who prefer a digital self-service experience. You can optimize product display pages and offer some level of public pricing or trial options to attract and convert digital buyers. Selling direct can also help you reduce their cost of goods sold and leverage the marketplace feedback loop.

    • With selling direct, transactions occur on PAYGO or Enterprise contracts.

    • When apps are Azure benefit eligible (MACC decrement), 100% of those purchases come off of a customer's cloud commitment.

    • Best practices for selling direct include focusing on a rich product display page, and if you do not have a freemium version or trial, having a lead capture to nurture Microsoft leads up to conversion.
    • Check out our free guide - Turn Up the Volume on Your Marketplace Strategy - for best practices on reaching a broader, more engaged audience.

  • Thru-partner is when the ISV works with a cloud solution provider (CSP) partner who sells their solution to SMB/SMC customers on a CSP contract, either at list price or with a private offer. With this option, you can scale through a robust ecosystem of over 400k partners and enable many opportunities, whether you are targeting repeatable revenue with SMB sales or 6-figure plus enterprise deals. 

    • The CSP handles the billing for the customer
    • When a CSP helps set up a private offer between the ISV and the customer, the CSP gets margin on that deal.
    • Learn more about selling thru-partner.
  • Through selling partner is when the ISV works with a partner who sells their solution to enterprise customers on an enterprise contract. As of December 2023, customers who are purchasing and selling partners who are selling in the United States can leverage multi-party private offers, which empower you to join forces with other Microsoft partners to create personalized offers with custom payouts on the commercial marketplace. 
    • Steps involved in multiparty private offers include:
      1. ISV creates offer, includes partner
      2. Partner extends offer to customer
      3. Customer buys through marketplace
      4. Microsoft pays ISV and partner
    • Key use cases for multiparty private offers include:
      • Customer prefers to purchase cloud solutions through partner
      • ISV prefers to sell through other partners
      • Selling partner needs to bring ISVs into a customer solution
      • Customer wants to use pre-committed cloud spend
    • Learn more about multiparty private offers

• ISVs should leverage Marketplace Rewards, a free program that Microsoft offers to ISVs who publish their solutions on the marketplace. Key benefits include:

• GTM support: This includes optimizing your product display page, getting featured on Microsoft marketing channels, and accessing best practices and guidance for marketplace success.

• Azure sponsorship: This is a way to get Azure credits that you can use for your own development, testing, or demo purposes, or to offer to your customers as an incentive to close deals. You can unlock up to 100K in Azure sponsorship based on your marketplace sales.

• Field webinars: This is an opportunity to present your solution to Microsoft field sellers who can help you co-sell and reach more customers. You can unlock a field webinar when you reach a certain level of marketplace sales and co-sell status.

Register to watch the recording! For more takeaways and more detailed info on those takeaways listed above, register to watch the recording.

Have follow up questions about this presentation's content? Comment below to continue the conversation with our presenters, Kristyn_Maddox and jasonrook!

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