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In 2015, Quality of Marketplace (QoM) Rivalry is Good News for XaaS Startups

Joseph Bentzel, Platformula1

Intro: Cloud Superpower Rivalry Meets Quality of Marketplace (QoM)

In 2014, price/feature wars broke out among the cloud superpowers.

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New “point cloud” or “anything as a service” (XaaS) startups increasingly see cloud marketplaces as a must-have component of their growth partnering and distribution strategy.
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The AWS Marketplace enables APN partners to directly showcase their XaaS technologies to the AWS customer base. The Marketplace currently hosts more than 2000 partner enhancement products and services including infrastructure, developer tools & business software.

The 10 Dimensions of QoM

Quality of Marketplace is a multi-dimensional construct that can help you determine and prioritize the relative attractiveness of an alpha cloud vendor’s partnering agenda—and their marketplace fit for your startup.

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QoM is a multi-dimensional construct reflecting the strategic partnering focus & maturity of a given cloud leader’s marketplace agenda. The ‘Quality’ in QoM stems from 10 core attributes or marketplace maturity indicators including: 1-Customer Access, 2-Selection & Mix, 3-Trials, 4-Promotions, 5-Support, 6-Tools, 7-Monetization, 8-Thought Leadership, 9-Multi-Option Deployment, 10-Executive Focus . They are outlined below.

Dimension 1: Alpha Customer Base Access

It’s important at the outset to make a simple point—that QoM is not about your father’s legacy IT channel partner model. Here’s the major reason why.

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Enterprise software and cloud superpowers like IBM promote their Cloud Marketplace as a growth channel enabling their XaaS and cloud technology partners to access and monetize the IBM global customer base.
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AWS openly promotes its high profile reference accounts.

Dimension 2: Selection & Mix

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Microsoft’s Azure Marketplace offers more than 500 virtual machine images and add-in XaaS services—on top of thousands of web & Active Directory apps and data services.
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CenturyLink Cloud has been cited by Gartner as a cloud ‘visionary’ and is actively building out a Marketplace Provider Program enabling XaaS innovators to access the CLC customer base.

Dimension 3: Trials & Freemium

In order to drive organic demand for themselves and their XaaS partners, alpha vendor cloud marketplaces widely embrace popular growthhacking best practices like free test drives, free tiers, and freemium product models.

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Leading enterprise software vendors now offer free test drives on AWS in order to gain access to the global AWS customer base.
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IBM BlueMix PaaS mandates a ‘perpetual free tier’ as a condition of 3rd party partner participation in their marketplace.

Dimension 4: Promotions & Showcasing

While SaaS companies have CRM innovator Salesforce to thank for pioneering the AppExchange model for app plug-ins and add-ons, it’s the AWS marketplace that took it up a notch in terms of promotional best practices in the age cloud.

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AWS Marketplace incorporates Amazon’s experience as an online retail & e-commerce superpower.
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Google Compute promoting ‘Click to Deploy’ partners.

Dimension 5: Programs & Support

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Microsoft Azure aggressively promotes the fact that a significant amount of its growth & revenue traction is driven by its partner ecosystem. This is an indicator of Microsoft leadership focus on Quality of Marketplace.
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IBM showcases its direct sales team, global events and social channels as part of its overall cloud marketplace value proposition. This is an indicator of a strong ‘Quality of Marketplace’ agenda.
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An example of an Azure partner promotional campaign on Twitter.

Dimension 6: Tools

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Cloud leaders continue to raise the bar in terms of marketplace services. An AWS blog post showcasing their self-service toolset for Marketplace partners.
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A web marketing analytics dashboard inside the AWS Marketplace Management Portal enables partners to measure the effectiveness of their growth campaigns.
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Marketplace as a service providers, e.g. AppDirect, are incorporating marketing functionality into their toolsets.

Dimension 7: Monetization

Marketplace partners rely on their cloud hosts to handle billing for their services. One experience, one invoice, and the host disburses payment.

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AWS Marketplace handles billing for Amazon Machine Image offerings and a referral fee for SaaS or XaaS offerings in their service catalog.
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AWS Marketplace partners can monetize their XaaS offerings via an annual subscription model in addition to the cloud pay-for-use model.
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Dimension 8: Thought Leadership

True thought leadership and commodity content marketing are different. Commodity content marketing can often end up being all about the ‘ego trip’, i.e. growing the ‘personal brand’ of an individual.

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AWS now publishes a startup blog on social content site Medium.
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Dimension 9: Deployment Options

Cloud marketplace hosts provide their partners with multiple deployment options.

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The Microsoft Azure Marketplace enables partners to host and certify their capabilities in multiple ways.
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Dimension 10: Executive Focus/Attention

Among the most important ‘big signals’ XaaS startups need to pay attention to are the ones that let you know QoM really matters to a given alpha cloud player.

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Conclusion

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Cloud IaaS & PaaS leaders increasingly differentiate themselves based on Quality of Marketplace or QoM. Through this differentiation, XaaS startups and growth stage players are being presented with an unprecedented opportunity to gain access to alpha cloud customers, growth programs, toolsets, & key executives. XaaS innovators that align themselves with multiple dimensions of QoM are in the best position to capitalize on alpha cloud vendor rivalry in 2015 & beyond.

Written by

Joseph Bentzel, Platformula1 founder, is a specialist in “Partner First” growth marketing for cloud, mobile, XaaS, & IoT innovators. http://www.platformula1.com

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