Why Your Procurement Team Cares About AWS Marketplace
When you think about marketplace selling and procurement on platforms like AWS Marketplace, you should be thinking about it as a team sport. Sure, selling through the marketplace results in larger deals, faster sales cycles and exposes your brand to a new audience, but if you’re only thinking about the pipeline benefits, you’re missing out.
We’ve talked about operationalizing your cloud marketplace go-to-market strategy in a number of pieces like this eBook (Operationalizing Cloud Marketplaces into Co-selling Machines) or this blog (What is Cloud GTM Strategy). The take-away: if you want to go fast go alone, if you want to go far go together (a phrase Salesforce ecosystem guru Mike Davis loved to say).
Aligning your procurement team for AWS Marketplace success
When the teams around cloud partnerships and alliances align, magic happens. Here are some tips on how to align with your procurement team:
1 – Align around a process –
Then document it. Each part of the organization – procurement, legal, opps – should know the role they play in transactions or sales going through cloud marketplaces. Documenting that process ensures that as transitions happen on teams, best practices aren’t lost. Communication and buy-in is key here, so alignment with relevant stakeholders and education on the benefits of cloud marketplaces is important. No one wants to be told they have new responsibilities, so clearly articulate the benefits to each stakeholder. We outline these benefits in the Operationalizing eBook mentioned above.
2 – Let Procurement own Procurement –
Too often the person who owns the technical or alliance role for a partnership is left wearing all the hats. Whether that is a control function () or a necessity for key tasks to get done, partner owners can find themselves as marketers, sales reps, opps and procurement. This isn’t scalable or helpful in obtaining full corporate buy-in. Partnerships should be a team sport, so build up your team with enablement, insight and data.
AWS recommends that the procurement team, with its expertise and visibility into the overall procurement process, take the lead in reviewing and accepting offers in AWS Marketplace. This approach ensures that all necessary steps are completed prior to offer acceptance, after being involved in the negotiation process.
With private marketplaces, you can enable self-service procurement and curate lists of applications, services, and data listings in AWS Marketplace. This approach allows you to control which users can purchase and from which AWS accounts they can make purchases. It also allows for the flexibility to create custom pricing such as free trials, pay-as-you-go pricing options for time-bound B2B solutions, project-based activities or when you need flexibility to experiment, expand, and scale. Another option is to leverage the Bring Your Own License (BYOL) model available in AWS Marketplace. With BYOL, you can realize deployment efficiency while using your existing software licenses.
3 – Have a plan
You know the value of your AWS partnership. But if you do not plan and align, you run the risk of partnering on an island. Without proper planning and alignment, AWS Marketplace can become an afterthought, leading to friction and inefficiencies.
Organizations should establish a pipeline of potential AWS Marketplace opportunities by first identifying:
- which of your current customers and prospects are built on AWS,
- when they renew and
- if they plan on any additional purchases.
Showing data, or facts not feelings, ensures that AWS Marketplace is not an afterthought and helps align different procurement stakeholders. Use fact-based pipeline estimates to align on an AWS Marketplace approach and help remove friction during deals to position the AWS Marketplace early in discussions with potential buyers. This gives your AWS Marketplace prospects the time required to adjust the buying process and / or submit that opportunity to co-sell and engage further with the AWS sales team.
4 – Easy button negotiations
Let’s face it, we make it hard for buyers to purchase software. Not only are we asking for money, we require legal back and forth on end user license agreements that favor the vendor. This often leads to increased time and effort in negotiation and suboptimal contract terms. If you’ve ever had a deal push because of legal redlining raise your hand ().
These negotiations not only hurt the soul of every sales rep, the downstream effects on procurement and legal often strain the relationship between sales, partnerships and the back office functions required to keep deals moving forward with the most favorable terms for everyone.
A huge benefit for not only sales / partner teams but for procurement is that when you sell through the AWS Marketplace, you can use previously negotiated contract templates developed in collaboration with the customer and seller communities to accelerate transactions (Standard Contract for AWS Marketplace (SCMP). The Standard Contract is available for over half of AWS Marketplace listings, and many of the software vendors that don’t use it publicly will accept it in a private offer.
- First, you review the standard terms with your procurement and legal teams.
- Second, you use the amendment template to create amendments that reflect your specific needs (for example, relating to your industry, geography, or business).
- Then you create different amendments for different risk or use case criteria, but always using the same base terms document for efficiency.
- The agreed contract terms are then applied as the starting point for contract negotiations with software vendors, creating a scale mechanism that helps accelerate transactions with different software vendors.
5 – Keep it Flexible (with Control)
AWS Marketplace allows a whole lot of flexibility for your buyers. Customers can use AWS Marketplace features to have sellers schedule the timing of payments and amend agreements to reflect your changing needs. The flexible payment scheduler provides you with complete control over the timing of billing for an AWS Marketplace transaction when they create a private offer, allowing them to agree to dates that best reflect their needs (for example, financial year budget constraints or AWS spend commitments).
You can renegotiate existing agreements and amend them. For new pricing, quantity, contract terms, or payment schedule), and a revised offer sent to you for review and acceptance. This gives you flexibility to renegotiate at the most opportune moment.
6 – Committed Spend (aka free budget?)
Customers already have a committed spend/ budget. Today’s B2B shoppers pay the cloud services they intend to use upfront for discounts. Anything not used from this committed spend goes to waste. The good news for sellers and procurement alike is that this committed spend can be used on marketplace purchases. Even more interesting for your procurement team – a buyer receives invoices from AWS that include your specified purchase order number, simplifying payment processing and cost allocation. No more chasing payments!
Bringing your procurement (and other departments) into the fold around partnerships alleviates friction and increases the support and efficiency around the selling process. Engaging as a team makes your company more powerful and gives you a competitive edge in this new lucrative model of selling through cloud marketplaces.
Want to dig more into operationalizing your cloud marketplace strategy across the organization? Check out one of our new thought leadership pieces:
