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The Marketplace Revolution: Transforming How Software is Bought and Sold.
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If you haven’t yet attended one of our Ultimate Partner Events, you’re in for a truly magical and industry-leading experience. In case you missed our Winter Retreat, we’re bringing one of the final sessions to you here: the Ultimate Guide to Partnering.
In this session, join industry leaders Jason Rook, Dux Sy of AppPoint, and Dexter Hardy of Integral as they dissect the reality behind the cloud marketplace hype.
This dynamic panel explores the tectonic shifts driving customer behavior and how major hyperscalers are responding. Industry leaders Jason Rook, Dux Sy of AppPoint, and Dexter Hardy of Integral dissect the reality behind the cloud marketplace hype.
This dynamic panel delves into the tectonic shifts driving customer behavior and how major hyperscalers are adapting. Discover firsthand accounts of achieving unprecedented reach, accelerating deal velocity, and transforming sales strategies through platforms like the Azure Marketplace.
Explore the evolving promises of marketplaces, from lowering the cost of goods sold to the strategic shift in salesforces and the power of co-selling. Gain invaluable insights into public vs. private offers, multi-cloud strategies, and the role of enablers in navigating this complex ecosystem. Whether you’re a startup or an established enterprise, this session provides actionable takeaways to leverage the immense potential of cloud marketplaces and future-proof your partnering strategy in the age of AI.
Here are 8 key takeaways from the discussion:
- Cloud marketplaces are experiencing real and significant growth, driven by customer buying behavior and the need for digital transactions.
- Marketplaces offer unprecedented reach and the potential for rapid global expansion, as demonstrated by Integral’s experience.
- Co-selling through marketplaces aligns incentives and can accelerate deal velocity and increase deal size, particularly with cloud consumption commitments.
- The “lower cost of goods sold” promise of marketplaces is more readily realized by startups with simpler offerings than large enterprises with complex sales motions.
- Marketplaces are driving a shift in salesforce strategies, with companies increasingly embracing digital-first approaches and leveraging marketplaces for customer acquisition.
- Combining channel strategies with marketplaces, including multi-party private offers, presents significant opportunities for growth and new service offerings.
- The choice between public and private offers depends on the company’s maturity, brand recognition, and the nature of their solutions, with public offers being beneficial for initial brand building and private offers for larger, custom deals.
- While professional services can be offered through marketplaces, they don’t typically decrement cloud consumption commitments, making software sales the primary driver for leveraging those commitments.
It was another bold, thought-provoking, and energizing discussion that left the audience inspired and eager to take action.
And we’re just getting started.
If you found this conversation as compelling as we did, don’t miss another Ultimate Partner event. Our next conference, LIVE, is taking place later this week in Redmond, on May 1–2, at Microsoft’s legendary Conference Center.
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Keywords & Transcript
Jason Rook Panel AUDIO EPISODE
[00:00:00] Dexter Hardy: It absolutely blew my mind the amount of reach and scale that we were able to accomplish just through the marketplace. When you look at there’s 7 million or more and growing active users in just Azure Marketplace alone, those become your captive audience for your solutions.
[00:00:22] INTRO: We believe this time is like no other.
We believe we refer to these as the tectonic shifts, all the hyperscalers in the world, if you add them all together. Managed services will be one and a half times larger
[00:00:34] Dux Sy: because it is the customer buying behavior that has created the need for all of us to rethink our models.
[00:00:40] INTRO: Until we have data quality, the effectiveness of AI cannot be realized and effectiveness of the partnerships cannot be realized.
Can you figure out, first, what your purpose is and how Microsoft can support your purpose and how you can support Microsoft purpose? Now we have a partnership. It’s the ultimate partnership. Welcome to, or welcome back to The Ultimate Guide to Partnering. I’m Vince Menzi, own your host, and my mission is to help leaders like you achieve your greatest results through successful partnering.
On February 20th, 2025, a small group of industry leaders converged here in Boca Raton, Florida, in this very studio for Ultimate Partners Winter Retreat. What followed was an incredible discourse on the tectonic shifts and the rapid change. We’re all seeing as partners. If you weren’t able to join us in person or on the live stream, we’re bringing this incredible session to you here.
This is my gift to you. All I ask in return is that you tell your friends, subscribe. Consider joining the ultimate partner community and hopefully joining us in the future. At an Ultimate Partner event. I hope these sessions provide you the learnings you need to continue to achieve your greatest results.
And now here to this amazing session.
[00:01:57] Jason Rook: Um, but my first question I’m gonna ask is, uh, ducks and ducks are both, is is the marketplace hype for real? And then within that, introduce yourself. Tell us a little bit more about what you guys have been doing in marketplace, and we’ll continue to dive in from there.
So Ds, I’ll start with you. Tell us a little bit more about AppPoint and then is this marketplace hype for real?
[00:02:15] Dux Sy: Sure. Well, thank you. Hey everybody. My name is Ds Raymond SI serve as a Chief Brand officer at AppPoint. We’re the global leader in data security, governance, and resilience. And we’ve been in business over 20 years and these days we’re so stoked about the channel as, uh.
Um, Janet mentioned we’re all in a hundred percent. We’re helping a lot of our partners build new businesses around ai, making sure their customer’s data is secure as they journey through this new world of, uh, uh, transformation. So it’s the hype reel. Absolutely. Now we’re in the early stages, and I can answer that multiple ways, but I, I, I’m gonna highlight three things why I think the hype is real.
Number one, if you have large customers, specific to the Microsoft world. So a lot of these customers have what’s called Mac. And what we’re seeing for a lot of our large customers, they want to draw on their Mac and it just helps our uh, deal cycle to go through much faster. So that’s number one. If you’re an enterprise Azure marketplace, for us it’s real second beyond the Microsoft marketplace, there’s tons of marketplaces out there.
That’s how really we scale and go to market with our channel business. Uh, we’re in over a hundred marketplaces around the world, and that’s one, one of our top strategies to grow our business in the channel ecosystem. And number three, that’s the reality of the world. Looking forward to the future, you can only hire so many sellers in your organization.
You can hire so many p dms and channel uh, leaders. You need automation. You need technology. You need a better way to distribute. So I think that’s why the hype is real.
[00:03:50] Jason Rook: So Dexter, I’ll kind of come to you with the same question. I know you’ve, you’ve been on this journey for a little bit of time now. Um, you’ve got kind of a little different business model that you’ve built and you’re building, um, for you is the marketplace hype for real?
And then tell us a little bit more about Integral.
[00:04:05] Dexter Hardy: Okay. So, uh, glad to be here. Dexter Hardy, president, CTO at Integral, Inc. Uh, simply put, we help you move to the cloud. Um. We started out as an si, so doing a lot of the app application development, migrations, things of that nature. Um, the small thing called covid happened, you may have heard about it in the news, but, uh, what we did was we focused on what was our superpower, what did we do really well, and we created cloud solution accelerators, putting them in the marketplace, Azure marketplace specifically.
And what we saw, and this is answering a long-winded way of saying. It’s not hype. It is actually a real thing that allows you to grow. We went from being a small regional organization to the first year of being on the Azure marketplace. We were in 44 countries by the following year. We were in over a hundred countries, and that’s continuing to grow to this day.
So I think the first thing that people need to really focus on if you’re leveraging marketplaces, are what is the value proposition of your software and or solution? Second, what is the experience? I heard a lot of conversation about AI and the agents and what it’s gonna do and how is it gonna impact us?
Well, people don’t buy an iPhone because it has a feature list. They buy it for an experience. And so I think the marketplace is going to amplify experiences, uh, for by buyers.
[00:05:31] Jason Rook: Well, I would, I would just chime in and, and say from the a representing the hyperscalers, um, that it’s absolutely for real. And I think if you think about why it’s for real, it’s really for real.
Because of all the things that Jay just laid out for the next 10 to 20 years. Right. And so for all of the hyperscalers to participate in the AI evolution, microtransactions, consumption based services, we all have to build these mega data centers and we have to have people in there using them. And the path to get there is to get more software development companies building on our platform.
And you can’t get. Software develop, develop companies to build on a platform if you don’t have a way for them to sell today. So it is absolutely for real, wherever you’re at on that adoption curve, it’s going to happen. Right. So I think the next thing, when I think about the, the hype about marketplace, we also talk about the promise of marketplace.
There’s a couple things when you, when you think about marketplace and what it does for you as a software development company or a channel partner, um, there are a couple things we often kind of refer to and one. I’ll go back to the marketplace promise of kind of expansion and reach of customers, um, docs.
From your perspective, um, has that promise kind of been true for you, the reach and expansion with Market Cloud Marketplace?
[00:06:47] Dux Sy: Absolutely. So at point, we’re a 20-year-old company and we started our business, frankly, doing the hard things first. We went after the enterprise business. We built a global.
Platform and we’re in 17 countries. That’s what we did first, and then frankly, we’re playing catch up on channel. We, we realized and recognize that channel is the way of our future, and through the marketplaces, that’s how we’re growing so fast. We’re doubling down on channel. We’re committed to it, and not just from making sure that we get new partners, but we also get feedback.
We are building new technology specific to the channel ecosystem, and we’re gonna deploy it through marketplaces as well.
[00:07:31] Jason Rook: Another thing about this conversation is that it is a little bit unfair because I do know all of your marketplace data, right? And so this question about expansion and reach Dexter, um, give us, I mean, your numbers are off the charts with that.
So give us a little bit of your perspective about marketplace and your ability to reach new customers and grow.
[00:07:50] Dexter Hardy: Okay, so, uh, he has a back, he has a back channel to see our, our statistics. But like I said before, um, it absolutely blew my mind the amount of reach and scale that we were able to accomplish just through the marketplace.
When you look at there’s 7 million or more and growing active users in just Azure Marketplace alone, those become your captive audience for your solution. A lot of companies are missing out on those eyes and those buyers, but the marketplace is a 24 hour sales guy that’s like ready to transact whenever your customer wants to transact.
Add on top of that research from Gartner. Tech buyers now want to buy digitally. They don’t want to necessarily get out on the phone and just go through the traditional sales cycle that comes second. Now, like if they want, if they want to engage with you in a very deeper way. Well, can you get your foot in the door first and the marketplace opens that door up for you?
So for us, like I said, over 18,000 I think, or so customers, we have, you know, over a hundred million Azure consumption hours on our solutions and growing. I think that is the opportunity where you see we’re adding value, you’re changing the experience, and for us is an absolute amazing ride.
[00:09:13] Jason Rook: Okay. So another marketplace place promise that you often hear from, from everyone in this space is that, and, and, and Dutch, you kind of alluded to this with the Mac component.
Yeah. But it’s that deals move faster and deals are larger in cloud marketplaces. Um, I’d love to get your perspective on that particular marketplace promise. Are they faster or, you know, deal velocity and are they larger deals?
[00:09:35] Dux Sy: So maybe before I answer that question, Jason wasn’t expecting this. For, for the benefit of the audience.
Maybe some folks may not be familiar with Mac, uh, especially folks watching as well. Yeah. So yeah, the official definition of Mac,
[00:09:46] Jason Rook: yeah, well, uh, Microsoft Azure consumption commitment, but in reality, all the hyperscalers have some type of cloud consumption commitment that a customer can make. So you have the EDP or the PPA with AWS, you have the CUD with G-D-G-C-P.
Um, and you know, if you think about modern procurement and those new millennial buyers, they probably know those ments acronyms today because that’s how they’re thinking about cloud purchasing, cloud software, right? So customers that have this cloud consumption commitment. And in many cases, they have the ability to draw down that commitment when they purchase, let’s call ’em eligible applications through a cloud marketplace.
[00:10:21] Dux Sy: Very good. So to answer your question, um, yes and no. Yes. In our enterprise customers, so a lot of our enterprise customers, big companies, they have a lot of these commitments. And what we’re finding is not only that, it makes it faster, sometimes makes the deal size bigger for us, because in the past, let’s say they, they, they wanna procure.
A lot of solutions from us, but they’re like, you know, based on budget phase one, phase two in the next two years. Whereas, you know what, we could do them both and draw it from our Mac commitment. So on the enterprise level, absolutely makes it faster, makes it better for us. But then if we go down to the SMC space, for example, it’s, it’s still growing because in some cases the flexibility of the Azure marketplace is still not on par with the other marketplaces.
For smaller organizations. Yeah.
[00:11:10] Jason Rook: Um, Dexter, same question to you and then I’ll kind of respond to that. Okay.
[00:11:15] Dexter Hardy: So what we see is, well, first of all, we would be considered a startup because no one would’ve known our brand. No one knew who we were. So what we did was we used the marketplace one to spread out and grow our brand.
We, we, I worked in marketing, supporting marketing agencies. We focused on the marketplace as a groundswell opportunity. So what we did was the marketplace has so many people out there, our barrier to, we lowered our barrier to entry. And the marketplace gives you that easy transaction to kind of acquire and build out your brand.
And now what we’re focused on is deepening those relationships through a channel and through additional, uh, you know, deepening that relationship with the customer, going in, cross selling, doing different things, talking about AI readiness, et cetera. So that’s where we different approach. Mm-hmm. Same outcome is really just expanding your reach and we were able to do that in the marketplace, to deepening that relationship and then going into co-sale, going into, uh, you know, bigger, more tangible, uh, sales within, within those organizations.
Yeah,
[00:12:26] Jason Rook: so I think docs, especially around your point around cloud commitment, from my purview, there’s no doubt right, that marketplace deals. In some ways are larger granted now. So Microsoft, we don’t know what those deals look like off marketplace, right? But what I do see is a lot, um, a lot of upfront annual payments or a lot of upfront deals, right?
So what used to be a three year term is now turned into a one year upfront, right? We see that a lot ’cause that customer’s trying to manage that cloud commitment that they have. Uh, we’re gonna talk a little bit later about in integrating channel into that, and I think one of the things that the channel does.
Really well is that the channel helps a customer with that procurement journey. And we see channel partners that have just amazing kind of cloud estate practices, right? Where they help the customer make those purchases. But I do see larger deals. Um, I. I would say from a velocity perspective, it’s absolutely true as well.
At least from what we see from the minute a deal enters the pipe to the minute it closes. A lot of times we find out about those deals like three days before the end of the month. Right. And which, which might not be typical off marketplace experience. So the, I think those two marketplace promise topics are kind of, have.
Positive answers, but I got another one that I don’t, I don’t know where you’re gonna go with this one. So one of the, the promises of cloud marketplaces is this idea of, it lowers the cost of goods sold for the software, develop the development company, right? So, you know, all these promises of automation and scale and those types of things.
But when you think about your journey in conversion and selling through cloud marketplace, mm. Have you really seen your costs go down? Have you seen fewer people? Have you seen the deal cycle get easier? And you know what I’m gonna change. I’ll go to Dexter to start this one and let you finish ds.
[00:14:09] Dexter Hardy: Okay, well, absolutely for us, uh, we focused on the automation first.
So leveraging ai, having a small team that can punch way above our weight with regard to being able to deliver our solutions are out there. Again, you have this 24 hour salesperson that’s pushing that out. Our costs of goods sold are not increasing relative to the amount of, uh, expansion and growth that we’re seeing in our organization.
And that’s really been a powerful thing for us.
[00:14:40] Dux Sy: So for us, not yet. So for us, the velocity is faster. And I think this is where we’re different because a lot of our, uh, marketplace transaction are private offers. So the idea is we’ve done the work. We pitch, we sold and we created this private offer for transactional purposes.
So a lot of the backend is still the same, but what it does help is just the velocity.
[00:15:06] Jason Rook: Okay. So I would, I would say my perspective on this particular marketplace promise has a lot to do with. Who you are and where you’re coming from. So in Dexter, your, your situation, you’re more of a startup. Right. And I know your business, you have lots of different skews, but I think more of the startups that I talked to, like the ones that come outta the Microsoft ISV success program mm-hmm.
Where they, they. Kind of, they’re born in the marketplace. We used to term them born in the cloud, right? But they’re kind of born in the marketplace. They’ve designed their entire sales motion around it, and maybe they have one, two simple SKUs, right? That that’s it. And I think they see that as a lower cost of good sold opportunity.
When I talk to the big guys, the household names, the NetApps, the Palo Altos of the world, that’s not the case, right? They have hundreds of SKUs, hundreds of agreements. Um, they’ve, they’ve got everything they do as a custom private offer deal. Mm-hmm. And so I don’t think they’re realizing just like you, much like you docs the, the lower cost of good sold promise of, of cloud marketplace today.
Um, so let’s, let’s move forward to kind of building off that cogs conversation into shift of your sales force. Right. Um, and I think you both have an interesting perspective on this, um, Dexter, let’s start with you again as well, because I think you shifted from a different business model, right? Yeah, absolutely.
Um, what, what’s the shift of Salesforce look like for you with cloud Marketplace?
[00:16:28] Dexter Hardy: So again, cloud marketplace, we are digital first. We didn’t even want to have a representative out trying to sell our product first. Because we were changing from an SI to an ISV. This was a new model. Obviously we wanna prove it out, but the proof is in the pudding to use a southern term.
We are, we are benefiting from that 24 7. It’s right there in your face. It’s click to add, you download the product or deploy the product to the cloud. And it moves like our time of our customer acquisitions, three to 400 downloads a week, like customers are quickly. Able to acquire and move with our solution.
So for us, we wanted to go there first, and then what we add on that, which was brought out another section is customer set. Right? We make sure we follow up and then that’s where we do our cross sale or deepen that relationship and then do co-sell from that perspective.
[00:17:26] Jason Rook: So what about you Dux shifting that sales force that you already had in place for 20 years?
[00:17:30] Dux Sy: That’s right. So, uh, we’re, we’re in this great transition, so I would say. Marketplace. And frankly, all these uh, new cloud models is a catalyst for us. So, as we’ve said publicly, we’re really pushing to shift our business to be very channel focused. Not to say we’re going to, uh, uh, forgo our current sales organizations ’cause we still have a lot of great customers around the world that are enterprise level, that our sales teams we need to focus on.
But what’s happening today, even a lot of our enterprise sellers. They recognize the value of the marketplace because it can accelerate deal velocity. So that’s one. But then knowing that the future for our organization is really support a lot of our partners, the, the understanding and also the value our organization putting on marketplaces is continuing to grow.
So I can see eventually there’s gonna be a, a huge shift, regardless if it’s our direct sellers or our channel team. Uh, but we’re in that transition phase, right?
[00:18:31] Jason Rook: So what do you think’s the bigger leap for your direct seller sellers? Is it the leap to understand marketplace transaction model? Or is it the leap to selling better through channel?
[00:18:45] Dux Sy: I think, are you asking which one would come first?
[00:18:48] Jason Rook: Yeah.
[00:18:49] Dux Sy: I think it’s, it’s actually both happening at the same time. ’cause a lot of them are seeing the value today. Like for example, a lot of our top customers are big Microsoft customers. So they’re seeing, wait a minute, my sales cycle is much faster if I go through the marketplace.
So everybody’s excited about that. But then at the same time, on the channel side, this myth that channel is for mid-market and SMB, it’s not quite true anymore because even there’s a lot of channel partners working with enterprise customers. So that’s very attractive for our direct sellers too.
[00:19:26] Jason Rook: Um. So let’s, let’s move forward to another question, and I’m going to, I think it’ll, especially at, uh, ultimate partner, we use the term co-sell a lot, right?
And I think at, especially at Microsoft co-sell can both be a noun and a verb, right? So the verb is going out and selling jointly with everybody in this room. The noun is the program, right? So, um, you guys have both participated in co-sell the Noun or the program for several years. And today in the Microsoft world, that’s a very Microsoft specific cloud marketplace question.
But, um, co-sell is marketplace, right? You can’t do one without the other. I’d love to get Dexter, we’ll start with you. I’d love to get your perspective on what co-sell and marketplace is changing in your business. Good and bad.
[00:20:11] Dexter Hardy: Okay. So I think just speaking from our journey, um, you have to be at a certain level.
Of sales within an organization to even think about co-selling. And a lot of people miss out on, you know, are people buying your product now? Well then co-selling is not gonna work for you, right? So you have to have a certain level of critical mass that you’ve been able to obtain within your organization, and then you activate that part of selling.
So that’s the first thing that I would say. Is it good or bad? I think it’s great because now you have the ability to amplify. And get those relationships built deeper across, uh, organizations where you may only be in one business unit now, now you have an enterprise agreement. So I think, you know, combining the Mac, telling the story that you, you know, you have this critical mass within your organization.
Hey, company, we’re over here. You’re, you’re using us, you can pay down your Mac. You have the, don’t go in the store and pay cash. You have a coupon. That’s what a Mac is. I always tell people that like, it’s like. You have a Publix coupon, go with the coupon. Don’t go spend cash, right? So just making that awareness for your customers so that they understand the value of your solutions and how they can leverage that to save, uh, potential dollars.
[00:21:29] Dux Sy: I haven’t seen those Sunday paper coupons in a long time. It’s all digital now. It’s
[00:21:34] Jason Rook: all it all digital. Yeah. So docs, um, yeah. I mean, endpoint’s been a co-sell Yeah. Partner of Microsoft for years, right? Mm-hmm. Um, what’s your experience been as, as you’ve shifted this model and as you, the Microsoft sellers that you’ve known for Yeah.
Decades, right? Shifted it to the new co-sell model. I think it’s
[00:21:52] Dux Sy: great. I think first of all, right, speaking of the Mac again and again, not to belabor my point, it. Increases the velocity because with co-sell marketplaces, customers, they just want to draw from their Mac. That’s number one from our Microsoft counterparts.
It hits their a CR and they would walk us in because they know, oh, your solutions are a marketplace. It’s gonna help me, it’s gonna help you. The third part, it just broadens our sphere of influence at that point. And while we, we may be a, a larger ISV since we’ve been around 20 years compared to others, but there’s.
A big market out there. There’s a lot of customers out there that don’t know us, um, and, and they see us and we can take advantage of it.
[00:22:37] Jason Rook: So I, I, I think I would echo both of you. I think the interesting part about co-sell is in the marketplace world is that it does have clear and accountable. Um, alignment to seller compensation, right?
Mm-hmm. So that has changed a lot of the relationships. I think the other thing, and I’ve talked about this at Ultimate Partner before, is it’s moved the cheese for a lot of traditional Microsoft partners. Mm-hmm. Um, especially those that are not software development companies that are more systems integrators, GSIs, MSPs, VARs, those types of partners, whatever acronym you wanna throw on them that have always struggled to have a relationship with Microsoft.
Um, because they were, um, VMware reseller, a Cisco reseller, and Microsoft wasn’t the top of their line card. Um, now those channel partners are selling massive ISV deals through marketplace. Mm-hmm. And they’re bumping out some of the more traditional Microsoft partners that were there at the table because they had relationships.
And I think that’s an interesting trend. That’s only gonna continue as we see this marketplace momentum. Uh, go on.
[00:23:42] Dux Sy: I want to add to that, and that’s, I think, where the future promise is, right. It’s this better together partner to partner story. It’s the, the ability to do multi-partner offers. And, and that’s a lot of the things we’re working on today.
And what, what really, uh, gives us that good combination, be it an ISV, an si, an MSP. So I think that’s where there’s a lot of room for growth in that aspect.
[00:24:04] Jason Rook: So let’s just jump into that top area right now. Doc, you, you’re, you’re trying to really flex this channel muscle. Tell us a little bit more about what you’re doing with multi-party private offer and embedding channel in your sales.
Sure.
[00:24:17] Dux Sy: Uh, so we work with a lot of different partners in different shapes and sizes, and the team has done a phenomenal job with putting together multi-part offers. Some of them we may be behind the scenes that the partners just going forth, so, so a very specific example. So we talk about ai. We all know that the holdup of ai.
Is not because of ai, but because of poor data.
Right?
[00:24:42] Dux Sy: And you can see all these reports, you know, copilot pilot stays there. It’s just a pilot. And the challenge is not because of copilot, but the data states not ready. You know, you have 40-year-old TPS reports that’s sitting there, right? Uh, oversharing is a problem.
So all these things, right? So what we’re working with a lot of our partners today is, Hey, this is an opportunity. If you do services around migration or cloud protection, introduce a new service around ai, data security, and let’s put it together in the marketplace as a multi-partner offer. So people can click, Hey, I want AI data readiness or co-pilot confidence, whatever you want to package it as.
So those are some of the things we’re working on and it’s really exciting ’cause it’s, it’s introducing a new line of service for our partners to expand their business in. Yep.
[00:25:33] Jason Rook: So Dexter, you and I chatted about your channel strategy, right? And when I look at your marketplace business that I would say today, I’ll just say it’s not very channel heavy, right?
And it’s super attractive marketplace business to me, right? So I’m, I, my question was why are you gonna go down that path? So I’d love to know more about what you’re thinking about how you’re gonna grow utilizing channels and marketplaces together. Right?
[00:25:54] Dexter Hardy: So the first thing that we focus on again, is, are, do we have, and are we adding value?
With our huge span of customers and the amount of usage that we’re getting on it, that answer, that answers hand, hands down. Yes. So now what we look at as a channel partner, our solutions help sis do their job. That’s what we cut our teeth on. That’s what we were. And so that’s how we started as an organization.
So now it’s just getting the word out to other sis. We can help you reduce your cost and be more profitable by leveraging our solutions. So selling through the channel becomes the opportunity through a multi-party private offer. Through that channel relationship to say, Hey, we’re not competing with you Big five three, whichever consulting you are now, right now.
Right. So where we’re looking to partner with you one to give you more, um, profitability margin. You know, you look at margins, you can say, Hey, this is how we get here faster to. That a CR that you’re looking to get to become a better version of the partner program. ’cause there is A-A-K-P-I that you need to get.
You get that because now we’re sharing, and now that becomes part of your KPI as well. The third piece is, well, it’s a big pie, right? Even if we’re looking at, we’re talking about trillions of dollars, the law of large numbers, we multiply any percentage times a trillion dollars. That’s a large number, right?
So that’s how we look at. Holistically growing that market. And so instead of having just one line of business or one way to go to Market Channel adds another growth opportunity for us and also partnering through the MPL.
[00:27:34] Jason Rook: So I think there are probably some software development companies that have tuned into this or even in the room today, um, that are still thinking or still really early on their particular journey.
Right. Yeah. And I think one of the things that if you’re in that case, you might have some questions about. The utilization of a public offer versus a private offer. Right. We usually, we refer to public, our private offer as a custom deal. Mm-hmm. Um, and I know both of you have different perspectives on that or different levels of success.
Um, Dexter, let’s start with you. Public offer and private offer. Your business has been very good, which is public offer, right? We are public all the way. Yeah.
[00:28:14] Dexter Hardy: Okay. So, and I, I, I say we start public all the way again. That barrier to entry. Customers don’t know your name. You gotta build your brand, you gotta build your momentum.
You get out there, you’re acquiring customers, you know, 33, 33 government agencies, you know, over 160 countries. And now you can then build on that second layer, right? Which is the private offer. You can say, Hey, X, Y, Z customer, you’re, we see you’re using all of these solutions. It would make sense to do this private offer with us, as opposed to.
We don’t have a name, we don’t have a brand. We come in with our sales person and we’re saying, Hey, come do business with us. No, you don’t even have the credibility to do that. But now, because we’ve taken that ground soil approach, we’ve gone out, we’ve, you know, built out our brand using public offers, now we can then step into that next tier.
[00:29:05] Jason Rook: So, so ducks, from your perspective, WI, you, it sounds to me like you’re mostly all custom deals.
[00:29:13] Dux Sy: Today. Correct. So a lot of our deals, ’cause it’s the nature of deal size, a lot of ’em are very large and we have custom private offers, but long term we want to build our muscle in the public offering and especially a lot of the new solutions we’re, we’re coming out with.
[00:29:27] Jason Rook: Yeah. I think my perspective is, I’ll, I’ll say in the, in the Microsoft commercial marketplace, um, if you think about revenue wise, definitely private offer is king, right? And 17 times larger than public offer deals on the whole. But what you do see is. ISVs or software development companies that do have the, your story, Dexter.
And again, back to the way I kind of framed you up when I see that they’re mostly those that started in cloud marketplace. Right. And they’ve been that way forever. I think we’re still in this phase. I know early majority, you know, that we’re there, but we’re still in the space where I think customers come to the marketplace to buy, not to shop.
Mm-hmm. Still. Um, and if you think about the ones that are really coming here, they’re coming to draw down their cloud commitment from some hyperscaler. And they’re, they know kind of what they’re looking for in most cases. And I, I think even with you, Dexter, they know what I mean. ’cause the solutions you saw are really unique.
Right. If I’m looking for Bantu or something like that, I, I am gonna find that I’m not just coming out to the marketplace, say, oh, who has something I could buy today? Right. I don’t think we’re there yet. I think in the future when we get more further down the path that Jay kind of outlined today with microservices and that type of thing mm-hmm.
I think there’ll be more of that shopping. But the most successful ISVs today are. Are really wrapping around that, that custom story, or they have, I would say you have very clear and unique offers in the marketplace. Dexter.
Yeah.
[00:30:48] Jason Rook: Um, so there’s a lot of work here that you guys have put in to get into cloud marketplaces, a hundred marketplaces for you, DS and, you know, in Dexter.
Um, I’m sure. Let’s, let’s just ask right now, what’s your strategy around multi-Cloud Dexter? We’ll start with you.
[00:31:04] Dexter Hardy: So, um, I’m a huge proponent of doing one thing really well, first. And then expanding on it. So we focused, we Microsoft partner, we focus on Microsoft. We’re doing that really well. Our customers are in AWS and GCP.
So we are moving out into those ecosystems based on what we see our customers, where our, where we see our customers. Mm-hmm. So that way we’re able to give them a full picture of how we can support them. If they chose us over here, they know that they’re gonna do the same quality across every cloud. Uh, so that’s our approach is just not that we are saying, Hey, let’s just, you know, go out and, you know, shotgun approach just kind of go everywhere.
But no, it’s a systematic, we’re doing this really well here. Our customers are there and so we’re, we’re following our customers
[00:31:54] Jason Rook: docs. How, how are you handling them?
[00:31:56] Dexter Hardy: Cloud? So for
[00:31:56] Dux Sy: us, I think the, the driver for us to invest in marketplaces is not necessarily direct customers. So when we started this journey, this is way before mm-hmm.
Um, uh, Microsoft Marketplaces is we were committed to growing the channel, and we know a lot of our partners transact through marketplaces. So that’s how our marketplace journey started. However, through time, uh, especially through AppSource, anybody remember AppSource or
it still
[00:32:24] Dexter Hardy: exists
[00:32:25] Dux Sy: as your marketplace, right?
Did I just say, do they remember? Okay. Um, but through Azure Marketplace, we have a lot of large customers really transacting there. So that’s our direct side. So, so we look at it, uh, two-prong approach, right? We scaled fast because we wanna make sure we want to meet our, uh, channel partners where they are.
But then now as customers are really buying and transacting to marketplace, we’re also serving them, um, in these marketplaces as well, right? Multi-cloud. Absolutely. That’s part of our growth strategy as well. Cool.
[00:32:55] Jason Rook: So a another question for maybe those that are early in their journey with cloud marketplaces, especially if you’re a software development company.
And I think today we have, um, we have this ecosystem that continues to evolve that we, at Microsoft, I think we’ve thrown a title on ’em. Then in a lot of the other hyperscalers have, have as well, we’re calling them the enablers, right? So we, one of those keynote sponsors here at UPL is sugar. Um, you know, you got tackle, we transact Azar work span.
Every day I get a new email from another enabler. Um, I don’t think either one of you used an enabler yet, but you both have different opinions. And Dex I’ll start with you and then Dexter, you can kind of give us your opinion on the enablers. Like where do they play for you and where don’t they?
[00:33:34] Dux Sy: Correct.
So I think what the enablers are doing, uh, for, for marketplaces are fantastic. And I think when we started our journey, uh, and, and maybe a lot of them haven’t, didn’t exist yet. We had to figure this out. So we thought, boy, we’re in this business for 20 years. We figured out how to grow direct, working with large customers, government agencies.
We can figure this out. Right? Which we kind of did and we’re doing today, but it’s, it’s work, right? It’s, it’s, we have a whole team doing all the different pieces that needs to be done, marketplaces. Whereas I can see for, let’s say you’re a startup, you want to scale, you want to interact with different marketplaces, and you don’t have that team.
I think enablers are, are uh, uh, fantastic partners to work with. It.
[00:34:18] Jason Rook: So Dexter, what’s your take on the enabler
[00:34:21] Dexter Hardy: ecosystem? So we personally do not use enablers. Um, and again, that’s, that was our choice from a startup perspective. You know, price point being a barrier. You need to, as a, as a startup, you have so many other barriers in front of you.
If technology is your strong suit, which was ours. A lot of it we kind of understood. So we leverage our own internal knowledge to go to market and, and, and take that, take that step. So if it’s not your superpower, obviously the enablers are going to get you there quicker, faster. And so you can, you know, justify that cost.
But for us it was a scenario where, okay, we already understand how to deploy the, to the cloud. We understand what the, what the rubric is, so why add that additional cost to our. Additional stack. Right. So for us, we, we chose to go net new on our own. Mm-hmm. And so that’s allowed us to kind of build faster, quicker, because we don’t have to integrate with something else.
Right. We automated that. And we do use copilot. We use creating our own agents as well. So, uh, like I said, we’re leveraging technology to deliver technology. Okay.
[00:35:30] Jason Rook: Yeah, I’d say, you know, from my perspective, I think. Hmm. A couple things. I think, again, I mentioned the, like the larger, more historical household names, security and data providers.
Um, definitely when they have legacy business and they’re bringing it over and they have, you know, hundreds of SKUs makes a lot of sense. Um, I think the next evolution of that whole group will be the additional value they provide, right? Mm. So, you know, everything from, like we talked earlier about just the.
The effort to put together private offers and the effort to do that with a channel partner and, and those types of things. Um, the effort to track that business, Dexter, when you go multi-cloud, maybe that’ll push you over the edge, right? So I think there’s, that ecosystem will continue to evolve a little bit.
So, you know, we wanted to save about 10 minutes for some questions. I’m gonna just ask you, you know, for some parting thoughts for the, the audience, like what, what would you like the audience to take away about your journey that might help them out in Dexter? I’ll start with you.
[00:36:30] Dexter Hardy: Okay. Um, well, as an, as an entrepreneur founder of a business, obviously you have to take calculated risk and emphasis on the risk side because you know the market is changing.
What will used to seem steady is changing rapidly. AI is just making that faster so, you know, have confidence in what you’re doing. Focus on being 1% better, do one thing really well and you will be just fine. Yeah,
[00:36:59] Jason Rook: ducks. What
[00:36:59] Dux Sy: would for me, uh, three quick things, right? Number one, who’s your audience? Who’s your market?
Are you selling direct? Are you selling or you want to do partner to partner? So once you’re clear of that, then you decide which marketplace you want to go to. I, I agree with Dexter, right? Focus, at the very least, go, go with the top three hyperscalers, and if solutions would. Would support those audiences in the three, uh, marketplaces and or four go for it.
And then last, but not the least. As you build that muscle, then think of scaling through channel.
Right? Yeah.
[00:37:33] Jason Rook: Good. So we’ve got about 10 minutes left. Let’s, uh, let’s open it up to some q and a. I know there’s microphones and we already, oh, cloud marketplace. We have ’em stacked up.
[00:37:42] Question: Yes. Yes. Uh, so first of all, I, I want to say this was a really, um.
Really great contrasting conversation, the two different parts of having success in the marketplace. So absolutely amazing. Um, I’ve got kind of a two part question, uh, because I think it’s really important for a lot of ISVs to hear this experience is, and, and I’ll start with that point because it’s something I have familiar, uh, fam I’m familiar with.
Um. A procured app app Point back in 2018, 2019, brought it into a big bank. Um, it was purchased through Kaizen, which was a partner of your all’s Microsoft brought in great experience. Um, so I can see the benefit and I can hear everything that you’re doing is, is exactly what, uh, ISVs need to be targeting in terms of co-sell.
So congratulations on that. I love to hear all the progress that you guys are making. Um, my question for you is, it’s something that I run into all the time with with companies is we hear these, we hear these ISVs just say, you know, our product is just our product. It’ll never be anything other than custom.
We’re always just gonna do private offers. They just dismiss the, the frictionless type experience that you can get it in, in a marketplace. Like what, what you’re seeing with Dexter. And so, you know, it’s one of those things you, you hear repeatedly and I see at point you, you’re having a whole lot of success with co-sell.
But what type of obstacles are you up against in terms of getting the alignment inside the organization to actually start working towards PLG motions mm-hmm. That are going to enable you the way that Dexter is because you’ve got that, you know, that, that, uh, contrast. Yep. Where a startup is born in the born in the marketplace, natively deployable.
You’ve got that experience and then you’ve got more legacy systems that are extremely customizable. And rely on private offers and, and yet stay away from growing towards that trajectory. Mm-hmm. So I’m curious from, from your standpoint, what are those obstacles? How are you bringing that to light inside the organization?
Mm-hmm. To, to make that change? Yep. And then my second question, so I’ll, I’ll tee you up, Dexter, is what is it that you’re seeing with the click to deploy type mechanisms, the public offering that you offer? What is it that you’re seeing? That’s creating the most success for you because I think, um, it’s really important the experience that customers have.
It’s not just about finding your product, it’s being able to be easy to use, try then buy. So I’m curious, you know, what has been successful for you? Um, what’s your name, sir? Justin Murphy.
[00:40:12] Dux Sy: Justin, thank you. I love your glasses.
[00:40:14] Question: Oh, thank you. I like your suit.
[00:40:15] Dux Sy: Okay, so fantastic question and uh, maybe let me preface it with this.
I think. I think what I love about it, I, I’ve been here 12 years and, uh, I think this is like the best year I’ve been here with all these changes in the growth. So AppPoint started and, and I, I share this and I’m not, you know, I’m shamelessly plugging this, but I think AppPoint is the only ISV started with two people building the first SharePoint migration solution in 2002 in a public library in New Jersey.
Fast forward today that went public. We went public on the backs of Microsoft. So thank you Microsoft. Right? And and the reason why is App Point’s a very entrepreneurial organization. Now we start our business with the enterprise, like enterprise is the hardest nut to crack and we cracked it and we’re continuing to do well.
That’s great. And we realized though, to scale and to grow, we gotta do channel. We gotta hit. Those what folks with the SMC audience. But we can’t do it. We can’t hire enough people to do it. ’cause we gotta focus on the enterprise. And from a change perspective, pivoting, I would say we we’re pretty up for that.
As Dexter mentioned risk. We love risk. Right? When, when, uh, Microsoft back in 2010 announced, Hey, we’re gonna go full B pause if you don’t know what that is, you weren’t born yet. This is the granddaddy of 365. And they reach out to us, say, Hey, we’re gonna go full on the cloud, but we need partners like you to build on the cloud.
We said, yes, we’ll do it. And then when they shifted to, uh, subscription, we did it. That was a big jump. ’cause back then everybody was like, what are you smoking subscription? Ha ha ha. Nobody’s gonna pay monthly. Right? And then, and then this idea of scaling our platform globally, we’ve done it. So we’ve done all the hard work.
And a few years ago we realized. We got to invest heavily in the channel in which we have. So certainly we start and say, Hey partners, we’re in the marketplace. Here’s our solution. Enterprise grade solution, now available to SMC. Great. But we didn’t stop there. We listen, partners like this is great, but uh, we have a lot of partners and it’s so manual.
We need multi-tenant management, we need workspace governance. We need, you know, risk monitoring. We need like a full knock so we can see all the different clouds environment. And we built it. So we have a fantastic partner specific platform called Elements Platform, and we, we just bought a company a few months ago to integrate with that and we’re gonna continue to grow and invest and double down in it.
So, to your point, right, yeah. Today, at least in the Microsoft marketplace, we have a lot of private offers because we still have a lot of those big customers we work with that they want to draw from Mac. But at the same time, from a, a. Growth standpoint, we’re really gonna invest a lot in our channel. Not not just from a selling motion, but innovation as well.
So our partners, not only can they sell more and grow their business, but they can run their businesses better. So our greatest challenge really is just time. It’s, it’s really, ’cause unlike maybe other organizations like you mentioned, how did I, how did you convince your internal leadership? It’s reverse for us.
We don’t have to convince internal leadership. You know, you talk about, uh, uh, Vince talked about growth mindset. We live and breathe it. Like, great idea. Go do it. Right? If you fail, it’s okay. You learn from it then, but let’s move on. So really, our, our greatest, uh, uh, thing we’re, we’re, we’re, we’re fighting with is just time.
It’s like, there’s just not enough time. But other than that, I think it’s, it’s, it’s a wonderful time to be a partner in this ecosystem. There’s so much to do. Hopefully that answers your question, Justin.
[00:44:00] Dexter Hardy: So I’ll start with a little bit of a quote. If we change the way we look at things, the things we look at change, and I say that from a standpoint of being an engineer.
When you’re out creating software or building anything, right? You’re thinking about features, functionality, turn that lens and say, what is the experience? Our solutions are set up to help DevOps teams. Mm-hmm. Who someone gets a, they read an article and they’re like, oh, we need to implement this technology.
And now that DevOps team is like, oh. What we’re doing, what and how long do we have? No. Our solutions help them with their life experience. Like you click to deploy, like you go in, you need to deploy this. Five minutes later it’s in the cloud, we’re onto the next thing. Okay, we can do those things. Right?
You’re improving their experience. So that’s what we started to look at from a, from an ISV perspective, is not just software, but what are you doing to improve the quality of the people’s lives that would use your software. And that’s, you know, like I said, we were sis, we did that. So we knew, oh my God, these people are gonna be raving about this.
Right? And then the market proved that out. So I would say focus on, just change the lens. If you’re looking at click to deploy or whatever it is you’re trying to evaluate, it could be, you know, rocket science, which with chat DBT and all the AI tools out there can be really made simple within your solutions.
I. You just have to change the lens. Don’t just do technology for technology. Do it for the improvement of quality, uh, improvement within, uh, life experience, uh, and, and getting your, um, constituents time back. So, next question.
[00:45:48] Question: So I, I know we’ve been talking a lot about software products in the marketplaces.
Um, how do services, sides of marketplaces work? And I’m sure it’s different for each of the hyperscalers, right? But like. Can I, as a services provider say, oh, here’s a 50 KPOC. It’s all gonna be custom built. Right? And then like we sell it through the marketplace, it retires. Mac is, is that, is, does that work?
Or is it only for software? Can I
[00:46:14] Dexter Hardy: jump in on this? Yeah. If you talk to me afterwards, you can partner with an ISV and do a multi-party private offer that’s transactable in the marketplace. So including the services, right? So let I, let
[00:46:26] Jason Rook: me just make, in the Microsoft commercial marketplace in the Microsoft, uh, you can now you can, well, in the Microsoft commercial marketplace in the us, Canada, and the United Kingdom, you can now sell a private, a professional services private offer.
Proof of concept 50 K, proof of concept, great idea workshop training, managed service contract training. The only thing you can’t do is the time materials contract within there. Right. Your question though? No, it does not decrement the Mac. Um, so mm-hmm. Yeah. So software sales are the only thing that decrement the Mac in the Microsoft commercial marketplace.
Now, all the hyperscalers have professional services capabilities and they all have different, you know, models in which those may or may not decrement cloud consumption. Um, but I think the rule of thumb for professional services providers, or if you’re a peer play si, um, it’s all about cloud consumption.
And you can look at most recent AWS announcements. You can look at our earnings report. You can look at all those things. It is about driving cloud consumption of our first party products, so software’s king. Um, and so that will always get the, you know, that’s always gonna be at the top of the list. And I think you’ll consider, you’ll, you’ll, you’ll realize that we continue to provide features to allow professional services in ways that we think pull software, right?
So, um. That’s the way I would think about it. If you are a pure play si, which there are a lot of those that have yet to, you know, like I was mentioning earlier, the traditional sis at Microsoft that have yet to adopt marketplace. The reason why you do it really isn’t because you want to become a transactor, although some do, because it is pretty easy money in some ways.
Um, the reason why you do it is you want to keep or build relationships with Microsoft field. That’s the reason why you go down the marketplace path if that’s the the business you’re in. But from a proser perspective, yes you can do it, but software will be key.
[00:48:14] Question: So then is the buyer buying that private offer and that bundle because they’re getting to retire the Mac on the software side.
And then like the partnership that we would strike within the ecosystem is more like, Hey, we can accelerate your journey, right? Um, the customer’s journey, buying your software with our services. So then we bundle that together into a private offer. Customer says, oh, like Mac drawdown is gonna be 10 K, but then I need to create new outlay for 50 K for the POC.
Right. Like, it, it, it feels, so when I reconcile that with some of the things we heard earlier today, right? Like $7 for every dollar that goes to cloud consumption, it sounds like, at least with your setup at, at mac, right? Like. The drawdown is only for the dollar. The $7 is like new money from the customer.
[00:49:05] Jason Rook: You remember that? $7 of net new revenue that’s attached to that transaction, right? So that could be $7 of product sales, $7 of your services, the whole pie. So if you think about the most typical pro in the Microsoft commercial marketplace today, the most typical. ProServe engagement is, I’m gonna use some names just to make it up.
’cause earlier I think Jay mentioned Palo, so let’s use Palo. So you’re a system integrator and you do a great job of implementing Palo NextGen firewall or an FWS or whatever they call it today. So you go to the customer, customer has a Mac, they wanna buy Palo Firewall, but you’re gonna do a hundred thousand dollars implementation.
You would, you would say, I’m gonna sell you a Palo Alto multi-party private offer for the firewall. Or a million dollars let’s say, and I’m gonna sell you my professional services private offer to do the implementation. It’s a hundred K fixed bid deal, right? So Palo’s gonna send you a private offer for your, for the firewall.
You’re gonna mark it up, you’re gonna send it over to the customer. So you’re gonna make some margin on what Palo just sent you. When the customer clicks buy on that offer in their Azure portal, that million dollars decrements their map right? You, when you also send, when. In parallel, you will send over your private offer through partner center into their Azure portal.
And when they click buy on that a hundred thousand dollars offer, it does not decrement their Mac, but it does end up on their Azure invoice. So the value to that millennial buyer now is they only had to go into the Azure portal and click, click, click, and they’ve bought all that. The invoice is only gonna be one invoice from Microsoft.
It’s gonna come with all their other stuff. Um, also. They probably maybe got around some procurement things, right? Because they just went in, did it through the portal with the existing agreement, so it’s a little easier on them. So that’s kind of where you, yeah, they didn’t get the Mac decrement, but it, it is a better story for them
We have rowdy questions in the front. I know. I love it. Yeah. So one more question because we had somebody on the chat. I wanna be respectful of the fact that the chat and then we are gonna take a break for lunch for 15 minutes. So, manic rain from, uh, NetApp, you probably know. Question for you Jason. Can you speak to Microsoft’s recently announced SME and C org?
Specifically, what changes is Microsoft planning? To make with regard to channel partners and marketplaces. Loaded question.
[00:51:33] Jason Rook: So I, I, man, probably we can, we can set up a call to talk about that. Okay. Um, if you’re still tuned in, um, I can’t speak to that today. That was, I mean, you know, Microsoft ecosystem that was recent, so we work in months, quarters, and fiscals, so we haven’t got to that point yet.
So, yeah, good answer. Thanks for the question. Thank you, thank you.
[00:51:56] Vince Menzione: Thank you for joining this episode of Ultimate Guide to Partnering. And if you haven’t done so already, mark your calendars. Ultimate Partner Live Spring is coming to Redmond, Washington on May 1st and second. This is going to be an incredible event like each of our Ultimate partner events.
This one is going to be just a little bit better than the one before. We’re having incredible leaders from Microsoft. Industry leaders talking about co-selling marketplaces, aligning to Microsoft priorities and more. You don’t wanna miss this event. Sign up today before seats run out.
Keywords:
cloud marketplace, azure marketplace, aws marketplace, google cloud marketplace, marketplace strategy, isv, software development, channel partners, co-selling, private offers, public offers, multi-cloud, digital sales, sales growth, customer acquisition, partner program, tech partners, ai, data security, cloud migration, SaaS, B2B sales, tech industry, business growth, entrepreneurship, startup, digital transformation, Microsoft, AppPoint, Integral, Jason Rook, Dux Sy, Dexter Hardy, ultimate guide to partnering, tech trends, online marketplaces, software sales, cloud consumption, deal velocity, cost of goods sold, salesforce transformation, partner to partner, multi-party private offer, channel strategy, marketplace enablers