It's time for the channel to embrace marketplaces and put its eggs in all baskets

In this opinion piece Barracuda regional VP public cloud & strategic partners international, Chris Hill, makes the case for the channel more actively embracing vendor marketplaces

Did you know that British supermarket Morrison's has 497 stores across the UK and serves, on average, 11 million customers per week? Yet, despite it being incredibly easy to get your hands on Morrison's-branded eggs, you'll still find them on Amazon.

That's because Amazon has built a compelling, easy-to-use marketplace for its customers, as many of us will have experienced when buying Christmas presents or day-to-day essentials. Because of this, it makes good business sense for other established businesses to leverage this model and attract new customers and appease existing ones.

As with this supermarket-analogy, the channel, too, has recognised a change in end user buying habits.

Certainly, the pandemic has done much to accelerate the trend towards buyers wanting simplicity.

While plenty of B2B products have long been available through individual marketplaces and eCommerce platforms, we are now seeing rapid growth in marketplaces from Microsoft to AWS.

These go-to-market platforms have become very attractive for customers, and cloud-based service providers are recognising their potential for growth.

On paper, this would seem a frightening prospect for some partners that currently work directly with end users, but the evolution of this route to market does not have to exclude the channel.

In fact, as it does to customers, it offers several attractive benefits that the partner can enjoy. By staying current and recognising a new revenue stream opportunity that a cloud-based model offers, partners can continue to enjoy their existing customer relationships while creating profitable new ones.

It's time to go to market

Marketplaces are a game-changer when it comes to streamlining the purchasing process for businesses.

One of the biggest advantages they offer is the fact that the vendor running the marketplace is already a qualified supplier in its customers' accounts payable (AP) systems.

Approaching a vendor or reseller, getting approval for the spend, onboarding a new supplier, and raising a purchase order has historically been a time-consuming and exhausting process. With marketplaces, a buyer can avoid all these repetitive tasks and get greater agility for their business.

Obviously we want to ensure our products are always available, and this means we have to identify where the customers are choosing to purchase them from - wherever that may be.

This is why we are listing our products in the same place that sells Morrisons' eggs.

Why be precious about it?

This route to market adds a new revenue stream to the existing, strong, tried and tested channel model and compliments all our current sales activities. Being open to new opportunities has always been a hallmark of the channel, after all.

Besides simplifying the purchasing process, marketplaces also offer the flexibility to trial different solutions at minimal expense and risk. Most solutions come with a variety of purchase options, including monthly, annually, or by consumption. Some even offer the option to test the solution in a sandbox and see how it behaves without the need to install anything. This allows businesses to innovate and fail fast, finding what works best with minimal expenditure.

There are also accounting and tax benefits to seize. It's essential to have finance and tax representatives at the table when planning the shift to cloud and marketplaces, and using an operational expenditure (OpEx) model can simplify taxes because there is no need to amortise expenditures or calculate depreciation. OpEx can also smooth out expenses, with smaller, more regular payments rather than large capital expenditure (CapEx) expenses every few years as new hardware and software are purchased.

Lastly, marketplaces can be as high-touch or low-touch an experience as the buyer wants, with the option to talk directly to vendor reps or just browse, allowing for a greater level of control over the sales journey.

It also helps users make more informed decisions by providing ratings and reviews from other users and online tutorials or guides to help set up and manage the available solutions.

This isn't all to say that marketplaces, if not properly adopted, aren't without flaws of their own.

Without proper tracking and coordination, different departments and teams could wind up with overlapping services or multiple instances of the same service.

Ideally, a central resource should be used to help users identify the resources already available to them.

Benefits abound

All in all, marketplaces provide businesses with the tools they need to streamline their purchasing process, experiment with new solutions at minimal risk, make more informed decisions about the solutions they choose to adopt and how those solutions are delivered, hosted, and paid for.

This flexibility enables organisations to optimise their IT resources and reduce costs, making marketplaces an attractive option for businesses of all sizes and a great opportunity for channel partners.