Companies building cloud solutions (such as independent software vendors (ISVs), SaaS providers, app builders, and more) —have never been more important to the world today.
With the continued acceleration of digital transformation, every organization, small or large, in every industry across the globe, will require cloud infrastructure and services to power their business. As customers’ needs for cloud solutions increase exponentially, so do the opportunities for ISVs to connect with partners and customers across the Microsoft Cloud and the commercial marketplace. To help our ecosystem harness these opportunities, we are announcing:
- Private offers with margin sharing to motivate 90,000-plus cloud partners: Now generally available, ISVs can use the private offer capability in the commercial marketplace to create and share margins to partners in the Cloud Solution Provider program — creating new sales channels instantly.
- Increased agility with private offers for customers: With enhancements to private offers in the commercial marketplace, ISVs can now create a unique private offer per customer in less than 15 minutes. This helps ISVs unlock enterprise customers for seven-digit deals and sell directly to customers with a cloud consumption commitment (if the ISV solution is eligible for Azure IP co-sell).
For Microsoft, the commercial marketplace is the connector between ISVs and customers — it’s an engine dedicated to accelerating growth. By selling through the commercial marketplace, ISVs get instant access to global reach: 1 billion people that use Microsoft technology, 95 percent of Fortune 500 companies that use Microsoft Azure, and 270M monthly active users on Microsoft Teams.
Shifts in business-to-business (B2B) buying
Before COVID-19, customers in both B2C and B2B environments already expressed a preference for digital commerce experiences, COVID-19 only accelerated digital adoption — digital-first selling is here to stay.
Harvard Business Review1 recently surveyed 1,000 B2B buyers. 43 percent of those surveyed would prefer a purely digital experience for all sales. When data was cut by generation, 29 percent of Baby Boomers preferred digital experiences in B2B buying and 54 percent of millennials had the same sentiment. Considering ten years from now, the channels we use for B2B buying today will be obsolete or at least forever transformed. Commercial marketplaces deliver on digital-first. Through B2B marketplaces, customers get a trusted buying experience that simplifies the purchase and deployment while helping customers optimize costs with pre-committed cloud spend.
Private offers to scale and motivate 90K-plus cloud partners
The ISV margin sharing to partners in the Cloud Solution Provider program (CSPs) became generally available on February 14, 2022. With margin-sharing, ISVs can directly incentivize CSPs to sell their solutions, this delivers on the promise of partner-to-partner marketing.
Collaborating with CSPs, ISVs can lower customer acquisition costs and scale business to new customers globally. We are seeing pairings of ISV and CSP partners having tremendous success. Just two months into partnering with Pax8 (the CSP) and LawToolBox (the ISV) has seen a 105% increase in licenses transacted through marketplace.
Another pairing partner, Sherweb (the CSP) and Nimble (the ISV), were able to work together and scale without adding any overhead.
“The outcome of becoming a P2P co-seller with Microsoft has enabled Nimble to scale our simple serum for Microsoft 365 to over 22 countries around the world without hiring one person. That’s amazing. ”
Jon Ferrara, CEO of Nimble
ISVs can offer margins to 400 eligible partners at once to open new sales channels, mobilizing a global ecosystem of partners. This also helps ISVs lower acquisition costs and simplify the sales process while increasing customer retention. And finally, when CSPs sell an ISV solution, they can bundle it with Microsoft Cloud solutions and their own value-added services to drive scale and recurring revenue.
Guidance on how to create a private offer and extend a margin to partners in the Cloud Solution Provider program.
Increased agility with private offers — accelerating seven-digit sales
To meet the needs of customers with agility, ISVs often use private offers. Private offers are the key to enterprise deal-making in the marketplace delivering flexibility like negotiated pricing, private terms and conditions, and specialized configurations. Microsoft has recently made substantial improvements to this functionality — ISVs can now create unique private offers per customer in less than 15 minutes.
Additional improvements include:
- Create an unlimited number of private offers.
- Ability to time-bound the private offer.
- Offer custom terms and conditions.
- Bundle multiple products in the same private offer.
One of the main motivators for customers to buy through B2B marketplaces is to decrement pre-committed cloud spend. Microsoft offers 100 percent of sales through the Azure Marketplace for Azure IP co-sell eligible solutions to count towards a customer’s Microsoft Azure Consumption Commitment (MACC). These deals are often in the millions and commonly transacted via private offers — the large deal sizes often need customized terms and conditions, special pricing considerations, and so on.
The recent improvements in private offers help ISVs connect with MACC-eligible customers. According to tackle.io’s annual State of Cloud Marketplaces report2, 82 percent of ISVs listed unlocking pre-committed cloud spend as their number one reason to sell through commercial marketplaces, and 43 percent of customers listed spending pre-committed cloud spend as their number one reason to buy through commercial marketplaces. Microsoft has a rich set of enterprise customers that require private offers, and we are seeing the acceleration. Year-over-year we have seen a 300 percent increase in customers buying Azure IP co-sell solutions through the commercial marketplace and we expect those numbers to continue to grow.
For agility and speed, ISVs can leverage APIs to create private offers and can view all private offers in a centralized dashboard with the flexibility to copy, withdraw, and upgrade offers as appropriate. As customers accept private offers, or when private offers are set to expire, the ISV will be notified in Partner Center. For the customer, they will see all the private offers associated with their account and when they purchase, they simply accept the offer with one click. No need to re-deploy their virtual machines — the solution deploys right from the Azure portal and is configured to work in the customer’s tenant.
Embracing the marketplace as a sales channel
With the proliferation of cloud solutions, commercial marketplaces simplify selling and offer customers convenience and a trusted environment to buy and deploy solutions to run their business. ISVs can accelerate their growth by embracing a third-party marketplace as a major sales channel. The improvements to private offers give ISVs the agility they need whether selling to customers with cloud consumption commitments or scaling through our 90,000-plus partners in the CSP program.
As the most trusted and comprehensive cloud — the commercial marketplace is how we are helping deliver tech intensity at scale — connecting over 30,000 solutions from partners to the 1 billion customers who use Microsoft products. Activate this channel by becoming a Microsoft partner and by publishing a transactable offer to the commercial marketplace.
1 Harvard Business Review
2 tackle.io State of Cloud Marketplaces report