BLOG | DEC 17, 2019
Cloud marketplaces are proliferating, presenting both challenges and opportunities for ISVs


Tarik Faouzi
Tarik Faouzi


Industry trends & insights

Cloud and digital marketplaces are growing rapidly as both consumers and businesses demand self-service and automated offerings. Apple’s App Store now boasts more than 2 million apps—up from just 500 in 2008. Google Play has more than 3.5 million apps—and Google didn’t even have an ISV program for its fledgling app store 10 years ago. On the corporate side, Amazon’s AWS Marketplace has thousands of ISV solutions, and Microsoft’s cloud marketplaces claim 3 million active users. In addition to the big players, there are hundreds of smaller cloud marketplaces catering to niche and vertical markets. And the growth seems to self-propagate; vendors who sell on marketplaces are launching their own marketplaces (ConnectWise, RackSpace). How can independent software vendors (ISVs) capitalize on the proliferation of digital marketplaces, accessing global marketplaces while still preserving precious R&D resources?

Cloud marketplaces are SaaS ecosystem multipliers
The market for cloud services procured through the marketplaces is large and growing, presenting a tremendous opportunity for ISVs. According to Gartner, enterprise customers of all sizes buy over half of their services from cloud marketplaces. Forrester reports that as much as 40% of all B2B transactions are through digital sales channels. IDC predicts that Salesforce and its ecosystem of partners and customers will generate $859 billion in new business revenue worldwide by 2022. And a 2112 Group survey found 11% of channel executives believe marketplaces will drive the majority of their indirect revenue as soon as 2023. Clearly, ISVs need to amplify their exposure on marketplaces to maximize their reach.

ISVs are scrambling to grab their share
ISVs recognize the potential of cloud marketplaces to provide a valuable, revenue-generating route to market, and most sell through multiple marketplaces to gain maximum exposure. In fact, in our cloud era, ISVs may find themselves not just selling through complementary vendors’ marketplaces but also selling through the competition. Case in point: Microsoft’s channel chief Gavriella Schuster revealed that Microsoft’s goal is getting its software on every platform—even that of its largest competitor.

Joining multiple ecosystems has its drawbacks
Being part of multiple cloud marketplaces comes at a cost. Typically, ISVs employ a dedicated team of engineers to build their own partner portal—a costly and labor-intensive undertaking—to manage the integrations with distribution partners and marketplaces. Based on our internal insights, ISVs spend more than $1 million each year to maintain this type of integration. This is just the tip of the iceberg in maintenance costs. To work with different distributors and be included in prominent marketplaces, ISVs also have to build a custom, unique integration with each. It’s a costly, chaotic system that is slow to launch and complex to maintain—zapping vital IT development resources and slowing down time to market.

CloudBlue Connect is the accelerant
To fully leverage multiple digital marketplaces, ISVs need to streamline onboarding. They need a way to eliminate the need to build and manage multiple integrations. In other words, ISVs need an accelerant, a single system to efficiently manage all of their channel partnerships.

CloudBlue Connect serves as that accelerant. It’s a single system capable of managing ISVs’ multichannel and multimarketplace distribution efforts. CloudBlue Connect centralizes relationships, standardizes integrations and eliminates the need to build new integrations for each new marketplace, since it’s being managed by CloudBlue. It’s a commerce-agnostic platform that can integrate with a company’s own or any third-party commerce system. CloudBlue also automates many of the time-intensive tasks of managing a go-to-market channel, including contract management, maintaining product information, fulfillment, usage management and subscription services. With this huge time savings, ISVs can put precious development resources back to work at R&D.

Unify multiple channels
With CloudBlue Connect, ISVs can effectively unify multiple channels, allowing them to expand their reach and decrease time to market with minimal overhead costs. CloudBlue Connect delivers key benefits, including:

  • Unified channel management through a single platform
  • Increased scalability though go-to-market automation and a hyperscale platform
  • Broadened reach by tapping into more than 200 service providers and potentially billions of end customers
  • Fast-tracked time to market by simplifying and streaming back-office operations
  • Reduced channel maintenance costs by eliminating need for multiple integrations

As digital marketplaces rapidly become the route to market for ISVs, it’s vital for them to leverage tools that remove barriers to entry by accelerating and streamlining marketplace onboarding, maximizing their ability to get solutions in front of a growing, global audience.

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