Microsoft Is Leading The Cloud Marketplace Channel Battle: The Channel Company Exclusive Research

Seventy-one percent of solution providers rank Microsoft Azure as the marketplace from where they have most increased their managed or professional services business, says The Channel Company CEO Blaine Raddon.

Microsoft’s cloud marketplace is having the biggest impact driving sales for partners followed by Amazon Web Services, Google, IBM and Oracle, according to exclusive research from The Channel Company.

The Microsoft Azure marketplace has had the most impact on the channel, with 71 percent of solution providers ranking it as the marketplace from where they have most increased their managed or professional services business, said The Channel Company CEO Blaine Raddon (left , in photo), who presented the research as part of a Cloud Marketplace partner session before several hundred partners at XChange+ 2021.

“[Unlike] Google and Amazon who were relatively new, Microsoft understood the channel,” Raddon said.

[Related: 10 Future Cloud Computing Trends To Watch In 2021]

Microsoft was followed by the AWS marketplace at 61 percent, the Google Cloud marketplace at 50 percent, the IBM marketplace at 32 percent and the Oracle marketplace at 27 percent.

Raddon said marketplaces of all stripes—whether it be from hyperscale cloud providers, distributors or vendors—are forever changing the channel landscape.

“I will tell you, over time these numbers are going to go up,” he said of the partner, vendor distributor and customer shift to marketplaces.

Raddon said that watching the development of marketplaces among the big three cloud providers offers three key lessons to anyone using those marketplaces to reach the channel.

The first is to make sure that the seller is differentiating itself from its peers while building a marketplace-specific strategy that includes the channel.

The second is to empower channel and sales organizations with ready-made materials to highlight the internal and the external values of the marketplace.

The third is to focus on the early funnel to the channel—and not just transacting deals—to drive initial demand to their marketplaces.

“The routes to market are shifting,” Raddon said. “What is my services strategy? What is my performance strategy and how can I become part of this marketplace?”

Raddon was joined in the Cloud Marketplace main stage keynote session by Travis Woods (right, in photo), president of Fort Point IT Solutions, a Novato, Calif.-based MSP, and Chad Hodges (center, in photo), vice president of business development at Enterprise Networking Solutions, a Cordova, Calif.-based MSP with a large SLED (state, local, and education) practice.

Woods said what is important for all marketplace providers to remember is that the MSPs and channel partners are the key to success in driving customer marketplace transactions.

“All of you in this room are what creates scale for any manufacturer,” said Woods, directly addressing several hundred partners. “I don’t care if it’s a cloud solution or a widget they have to sell. You are what makes the customers’ considerations be heard.”

Fort Point IT Solutions counts government entities as a large part of its business, and government purchasers don’t deal with anything that’s not routine or that causes them to struggle with a fixed annual budget, Woods said.

Vendors have had to make it simple for government clients to use cloud marketplaces, but those marketplaces have not always worked in an environment with regulatory requirements and multiple bidding processes, he said.

“It’s a market that I think is very unique in that they definitely think they need to adopt the cloud,” he said. “And what we try to strive for our clients is, we try to make sure we’re comparing what cloud makes the most sense.”

Woods credited Microsoft with bringing a channel-savvy perspective to its cloud marketplace. “Microsoft already had a channel program worked out with us,” he said. “We did hundreds of thousands of migrations of Office 365 from BPOS. We actually did it twice.”

That said, Woods pointed out that AWS has turnkey solutions that are hard to replace.

“But they had no channel strategy,” he said. “And I feel that they’re still struggling with that a little bit because they’re realizing that [they] have all these great solutions, but [they] don’t have us to sell them. They can’t scale up. I’ve had the relationships. I have 23 years in my territory at the state level and the federal level. And that’s not something you can just turn overnight.”

Despite the development of cloud marketplaces, technology sales will remain a hybrid process for the foreseeable future, said Hodges. “I think they’re all trying to figure out what that will look like and how they fit into a marketplace,” he said.

As far as distributors developing cloud marketplaces, Hodges praised born-in-the-cloud distributor Pax8 for making it easy for partners to succeed in the cloud with its marketplace. “I’ve watched them at this event evolve quite literally from three vendors to, I think, 50-plus or something like that,” he said. “[Pax8 brings] ease of use, open APIs, simplified billing structure. That should be the future.”

Raddon, for his part, said the future is bright for marketplaces, with an increasing number of B2B sales transactions sure to shift to those marketplaces over the next five years.

“The marketplaces that sit behind the cloud are going to be very impactful,” he said.