What CFOs Must Consider Before Implementing a Digital Marketplace Strategy

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Even before COVID-19 catalyzed the adoption of online B2B marketplaces, it was becoming apparent that marketplaces would be a key aspect of B2B sales in the years to come. Forrester had predicted that 17% of channel sales would flow through B2B marketplaces by 2023 — the pandemic’s acceleration of marketplace adoption led the consultancy to predict that figure would be hit this year.

On the operational side, the advantages of marketplaces include an additional channel to market and sell products, new sources of revenue, reduced marketing costs thanks to a built-in audience, and opportunities for overseas sales and new trading partnerships. From a customer-facing perspective, this translates to around-the-clock operation, and a better experience for customers as they can easily compare prices and products from a single source, which also leads to greater transparency.

Some of the world’s leading software companies have adopted marketplace strategies to great success. Perhaps the most-cited case is that of Salesforce, who in 2005 created AppExchange for third-party developers to create their own apps to sell to Salesforce customers. And GetApp and Capterra, both acquired by Gartner in 2015, are also among marketplaces that have proved highly successful. GetApp being a top online resource for businesses exploring software-as-a-service (SaaS) products, and Capterra serving as an intermediary between buyers and technology vendors within the software industry.

For CFOs looking to benefit from B2B marketplaces, it is important to have a sound strategy in place. A profitable marketplace strategy is based on this key economic principle: reaching economies of scale by increasing the units sold in relation to the operating costs. Or in other words, achieving a so-called fixed cost degression. Consequently, not all products, services, and markets are a good fit for a scalable marketplace strategy, and oftentimes, CFOs who are considering one don’t know where and how to evaluate the investment opportunity.

Let’s take a look at the three pivotal questions that CFOs and key financial decision-makers should ask themselves when evaluating a digital B2B marketplace strategy.

What type of market will we address with a B2B marketplace?

It may seem obvious, but businesses often overlook the key step of identifying and defining the type of market they wish to address with a B2B marketplace. Forgetting to do this vital step from the beginning can lead to detrimental mistakes down the road.

To best define the type of market a company should address with a B2B marketplace, CFOs need to partner with marketing to determine the industry their company is hoping to target, the overall size of the industry, and the total addressable market or TAM, which represents the total revenue opportunity available to a product or service.

The concept of TAM is crucial for companies as the estimates of the amount of effort and funding required enables them to prioritize specific products, customer segments, and business opportunities.

CFOs should also establish how saturated the market is at the moment, who the competitors are, and the weight those rivals have in the market. In addition, CFOs have to consider what size of companies and at which price they need to target with the B2B marketplace in order to outweigh the costs of goods sold and operating expenditures.

Having the answers to these questions in mind will help a company define its demographic and the investment requirements to set its digital marketplace strategy up for success.

What is the potential opportunity for growth within the market?

Once the target market is identified, the CFO must take steps to understand the potential growth opportunities for the company within that market via a marketplace strategy.

To do this, CFOs should estimate the total market potential and how much growth they can expect within a certain period of time (for example five years) within this market.

To forecast the total market potential for a product, a business first needs to define its target customers, estimate the total number of target customers, and determine a penetration rate for its product category or categories. It should also calculate the potential market size in terms of both volume and value and then modify its initial assumptions on a constant basis.

There are different processes through which a business can make a growth forecast, including customer surveys, expert opinions, estimates by salespeople, sales and trend analysis, and market tests.

Some of the other key areas companies should focus on include the competitive density of the market, the cost per unit sold on the marketplace, and the potential total revenue that can be made in the market.

It is also important to note the average transaction size for product segments within the market. This means if a company is reselling subscriptions to Microsoft Office 365 on a marketplace, for example, it must understand the cost of selling the product as well as the potential revenue per product it resells on the marketplace. This accurately determines the quantity of Office 365 subscriptions it must sell to actually turn a profit.

In general, the sweet spot for marketplaces is high transaction volume with low transaction size.

Are our goods and services scalable in a marketplace setting?

Once the CFO understands the market they wish to address and the growth opportunities within that market, it is time for them to introspectively look at the key products and services offered to see if these are scalable within a marketplace setting.

IT service providers, for instance, will often bundle software and services together to increase profitability that in turn provides more value to their end customers. To tap into this potential, CFOs must look at several key metrics to determine if the products and services are scalable to the marketplace. They also need to determine the Full-Time Equivalent (FTE) to units sold ratio. The ratio reflects the actual full-time payroll of the company and is especially important when companies want to compare themselves with industry standards or close competitors to determine whether they are understaffed or overstaffed.

Furthermore, they should ascertain whether the products and services they offer require a high amount of liquidity or capital costs (e.g. hardware). It is also important that they know if they can convert these costs and interests into an operating expense.

It is pivotal for CFOs to understand what resources they are using to sell, procure, and manage the products and services being sold on a marketplace. The longevity of these resources also need to be examined to know if they can hold strong to handle an increased amount of transactions. Finally, it is key to know whether the marketplace platform that the company is being paid on is based on units or if it claims parts of the businesses’ revenue.

The bottom line is that CFOs need to examine the components of their marketplace offerings and the underlying technology to make their products scalable. If they find the right way to build products, they can achieve tremendous economies of scale by boosting transaction volumes faster compared to the related operational costs—helping to consistently grow the company’s profit margin.

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Mike Jennett, Director of CloudBlue Platform Strategy, is an accomplished business and technology executive. With a deep focus on product development and go-to-market strategy, he plays a pivotal role driving strategic growth and market expansion. Mike’s career is characterized by his adeptness in driving technological advancements and his commitment to leading digital transformations with experience including IDC where he was VP of the Mobility and Digital Transformation IEP practices, and HP where he held numerous leadership roles. Mike’s expertise is also reflected in his published works and contributions to multiple tech publications. Mike holds a B.A. from California Polytechnic University.
Having previously to strategic product management, agile transformations, and user experience in CloudBlue, Taylor Giddens heads the Services & Solutions team where he ensures smooth delivery, operations and solution growth for our partners and customers.

The team includes technical account management, managed services, support, custom solution development, and customer enablement.

Prior to CloudBlue, his resume boasts leadership of some of the world’s largest companies during their digital transformations and marketplace launches. Taylor is a practitioner of servitude leadership when it comes to enabling his team to drive positive outcomes on the road to operational excellence.
Laurens van Alphen, a visionary entrepreneur with over 29 years of internet technology expertise, serves as Director of Technical Managed Services at CloudBlue, responsible for Operations and Delivery of CloudBlue SaaS.

As a Dutch racing champion and car enthusiast, he brings the same drive to the tech realm, steering Keenondots from a managed hosting firm to a global cloud enablement leader. Laurens is celebrated for his outcome-driven leadership, deep industry insight, and passion for balancing business innovation with client engagement.
Lincoln Lincoln is CloudBlue’s Head of Global Sales; having been with the company since November 2017. Leading CloudBlue’s global go-to-market organization, he’s responsible for driving accelerated and sustained mutual growth with CloudBlue’s customers and partners, as well as forming new customer partnerships across the Vendor and Provider ecosystem. As part of CloudBlue’s leadership team he is responsible the organisation’s revenue and continued market leadership by delivering and supporting products, services and solutions to organizations in established and new markets around the world.

Before joining CloudBlue, Lincoln was AppDirect’s Regional Director, Asia Pacific & Japan, responsible for forming, building and leading AppDirect’s business and operations across the APJ geography. He built and led AppDirect’s fastest growing and highest performing region globally within 3yrs.

Before joining AppDirect, Lincoln was EMC’s Practice Manager, Cloud Service Providers, APJ, working with the leading Service Providers to maximise their Cloud Business presence & market success. Lincoln joined EMC in 2007, and has over 20 years’ experience in the IT industry, having been based out of Singapore, Australia and the UK. Prior to EMC, he was in range of sales and channel positions at Symantec and VERITAS.

Lincoln has an Honours degree in Business Administration from Kingston University in the United Kingdom.
Brent Clooney is the Executive Director and Associate General Counsel for Ingram Micro Inc., and lead counsel for CloudBlue.

Brent is a Canadian based corporate lawyer with more than 20 years of experience as a strategic legal advisor both in private practice and as in-house counsel to large multi-national companies. Prior to joining Ingram Micro in 2008, he worked at a well-respected corporate law firm in Toronto, Canada and later served as general counsel for Toshiba Canada. During his 15-year tenure at Ingram Micro, he has held positions of increasing complexity and responsibility, and since being promoted to his current role in 2022, Brent is the legal lead for both Ingram Micro’s Canadian and global cloud businesses, as well as CloudBlue.

Brent holds a law degree (LL.B.) from Queen’s University, a Psychology degree (B.A. Honours) from Lakehead University, and has been admitted to the bar in Ontario, Canada since 2002.
Anurag serves as the Head of Product Management for CloudBlue and is responsible for product direction and driving innovation. His leadership has been marked by a keen focus on customer needs, growing the ISV ecosystem, and ensuring the continual evolution of CloudBlue’s product portfolio.

Anurag joined Ingram Micro in 2017 and has been instrumental in, positioning CloudBlue as an industry leading monetization platform for MSP’s, Telco’s and Distributors. Previously Anurag worked at Oracle and Microsoft where he managed many technology projects and programs.
As VP of Engineering of CloudBlue, Rony oversees the development and engineering efforts of the company. He is a recognized leader with more than 25 years of experience in Technology and Product.

Prior to joining CloudBlue Rony lead the R&D efforts at Tripwire acquired by Thoma Bravo, and Cedexis acquired by Citrix. Rony is a leader with extensive experience in transforming both complex technology problems into products that customers love and disjointed organizations into agile high performing teams.
Coen is a distinguished leader and entrepreneur in the realm of cloud technology. Currently serving as CEO of Keenondots and the Global Director of CloudBlue SaaS. He is passionate about driving innovation, fostering collaboration, and leading high-performing teams to achieve transformative results.

With a background as Managing Director of INTO Cloud and a pivotal role as Director of Products of KPN, he brings a wealth of experience in steering organizations through the complexities of the digital landscape.

Beyond the boardroom, Coen is a marathon enthusiast, demonstrating endurance and discipline in pursuit of both professional and personal goals.
Alyson has over twenty years of experience in demand generation, marketing automation and data management. She is responsible for leading the strategy and direction of the company’s brand, performance, and digital marketing.

Prior to CloudBlue, Alyson served as Ingram Micro’s Director of Global Business Intelligence Marketing Automation driving channel partner campaigns. Her tenure in marketing leadership at prestigious companies such as Western Digital, Ocean Institute celebrates redefining marketing campaigns and building top performing teams based on trust, experimentation, and results.

Alyson resides with her husband and three children in Orange County and is an active volunteer and donor within her children’s sports and education programs.

Darek Tasak is leading Customer Success & Value Creation for CloudBlue. In his role, he looks after CloudBlue customers globally during the entire lifecycle of our relationship: from the initial on-boarding, through in-life account management, always ensuring they build successful businesses leveraging our technology. Additionally, he is also in charge of Partnership & Alliances, as well as Pricing Management for everything we commercialize.


Before CloudBlue, Darek managed Ingram Micro’s Services division for hi-tech customers in Europe & APAC. His prior experiences include also launching and leading pan-European services business for TDSynnex, as well as strategy consulting with Boston Consulting Group (BCG).

As President of CloudBlue, Uddhav Gupta is a distinguished leader and visionary with nearly two decades of platform-building experience. He is an industry leader in digital commerce, the subscription economy, and monetization platforms.

Notably, at SAP, he spearheaded the transformation of their platform business into a multi-cloud platform-as-a-service, offering enterprise and developer-friendly subscription models. At Pure Storage, he championed the efforts to successfully disrupt the storage industry by creating revolutionary Storage-as-a-service, AIOps-as-a-service, and Disaster Recovery-as-a-service offerings with cutting-edge features and establishing a sophisticated subscription commerce infrastructure that is channel-friendly.

At CloudBlue, Gupta guides and empowers businesses to rethink their monetization strategies by unlocking the power of digital ecosystems and marketplaces. CloudBlue provides enterprises with a mature multi-tier, multi-channel marketplace and monetization platform that enables usage-based subscription models and global delivery of Anything-as-a-Service solutions. Gupta has played a pivotal role in shaping the future of the subscription economy through his innovative thinking and impactful contributions.

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