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What value do cloud marketplaces bring to the channel?

Companies are increasingly spinning up services via a cloud marketplace

Virtual shopping pushing cart

With more and more companies becoming aggregators of cloud services, there is a variety of new entrants – like telcos – offering cloud services on top of their existing traditional businesses. But what does this mean for the future of the channel?

According to research carried out by the Cloud Industry Forum (CIF), some 80% of businesses are using cloud services to some extent. The research also found that roughly 65% of the UK IT channel offers cloud services as a part of their portfolio to their clients.

But what value does an online shopfront for cloud services offer to end user organisations, what role can the channel play in this, and can they do business in a cloud marketplace?

There are many cloud marketplaces available, many of which are specific to a particular vendor, for example Oracle Cloud Marketplace and SalesForce AppExchange. There are also distributors like Tech Data that operate marketplaces offering cloud services from several vendors.

There are two important points to acknowledge about cloud marketplaces. First, there are many different types of cloud marketplace and second, they enable channel partners to sell a comprehensive range of services.

The cloud introduces market pressures; selling the cloud can mean smaller margins than those partners are used to, or indeed can make a viable business from. This in turn means that partners cannot solely rely on selling through a marketplace as margins are too small; it can only be one part of their overall strategy.

A partner may consider numerous roles, such as an aggregator, an integrator, a broker or manager. Where channel partners can be of more assistance is to SMBs to help guide them through the cloud to meet a particular business need.

The marketplace can also bring value to a partner’s offerings. Some IT distributors enable partners to white-label a cloud marketplace so that it can be customised to add the partner’s cloud services to what the distributor offers. Such services can decrease the time it takes to provision new services for the channel’s customers, as well as allowing channel partners to quickly become a single source cloud service provider.

Having a marketplace can help end customers in their cloud journey. Resellers can set up demos where customers can try out various products and services risk-free. Such marketplaces solve common problems for end user organisations when transitioning to the cloud. These common issues are in areas such as spending visibility, billing, optimisation and governance.

The cloud marketplace is a great way for the channel to transform its business. If done right, partners can move from single-digit margins made from shifting products to as much as 50% when cloud services are wrapped up with professional managed services.

A partner needs to put together cloud deals that work, not just for them, but also the end customer. Having all services in one place increases the value of this marketplace to both the partner and the customer.

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