Mastering Cloud Marketplaces: 3 Key Challenges and Practical Strategies for Partner Leaders Entering the AWS and Azure Marketplaces. Part 1 of a 4-Part Guide
This is Part 1 of a two-part guide on succeeding in cloud marketplaces like AWS and Azure, tailored for partner and GTM professionals, from managers to VPs, in SaaS, AI, cloud, and infrastructure. This article focuses on the entry phase, identifying the top three challenges partner leaders face, the key questions they ask, and practical, real-world advice to navigate these hurdles effectively. Insights are drawn from current industry data. Part 2 will explore scaling and thriving in these ecosystems [link to be added].
Top Three Challenges for Partner Leaders Entering Cloud Marketplaces
Aligning GTM Strategies with Marketplace Dynamics
Partner leaders often struggle to integrate cloud marketplaces into their existing GTM strategies. Marketplaces like AWS Marketplace and Azure Marketplace operate differently from traditional sales channels, requiring a shift in how teams approach sales, marketing, and customer success. The challenge lies in training sales teams to understand marketplace-specific processes, such as co-selling with hyperscalers or leveraging private offers, while maintaining alignment with broader business goals. A large portion of software companies are now using cloud marketplaces, but many lack the internal alignment to maximize their potential. This misalignment can lead to missed opportunities, as sales teams may not fully grasp how to position marketplace offerings to customers or collaborate effectively with hyperscaler account teams.
Real-World Example: A mid-sized cybersecurity ISV I spoke with with wanted to list their SaaS product on AWS Marketplace. Their sales team, accustomed to direct enterprise sales, initially resisted incorporating marketplace processes, viewing them as additional complexity. This led to slower deal cycles and missed co-sell opportunities with AWS account managers. Only after targeted training on marketplace benefits, like streamlined procurement and access to AWS committed cloud budgets, did the team start closing deals faster, achieving a double-digit increase in pipeline velocity within six months.
Navigating Technical and Operational Complexity
Entering a cloud marketplace requires significant technical and operational adjustments. Partner leaders must ensure their SaaS or AI solutions are architected for multi-tenancy, comply with marketplace requirements (e.g., AWS’s Foundational Technical Review), and integrate seamlessly with hyperscaler billing and metering systems. This is particularly challenging for organizations transitioning from on-premises or legacy systems, as they may lack the in-house expertise to handle cloud-native architectures or manage data privacy and compliance requirements, such as GDPR or SOC 2. Businesses prioritizing SaaS architecture for cloud marketplaces can reduce onboarding efforts dramatically, but the upfront investment in re-architecting can be daunting.
Real-World Example: An automotive SaaS provider faced challenges with multi-tenancy and data management when listing on AWS Marketplace. Their legacy platform struggled with inefficient S3 bucket management and API performance issues. By partnering with an AWS SaaS Competency Partner, they implemented lifecycle policies for storage optimization and host-based routing for APIs, improving system performance and reducing operational costs by 20%. This technical overhaul was critical to meeting marketplace standards and gaining customer trust.
Building Effective Co-Sell Relationships with Hyperscalers
Establishing strong co-sell relationships with hyperscaler teams, such as AWS or Microsoft account managers, is a top challenge. Partner leaders often find it difficult to align their sales motions with hyperscaler priorities, such as targeting specific customer segments or leveraging cloud credits. As you can guess, partners who frequently co-sell with AWS experience a much higher revenue growth, yet many struggle to initiate these relationships or understand the hyperscaler’s internal processes. This can result in underutilized opportunities, as partners fail to tap into the hyperscaler’s customer base or committed cloud spend.
Real-World Example: A data analytics ISV struggled to gain traction on Azure Marketplace because their sales team didn’t actively engage Microsoft’s account managers. After enrolling in Microsoft’s ISV Success program, they gained access to co-sell training and account mapping tools, which helped them identify key customer champions and economic buyers. This led to a 7-figure deal closed through Azure Marketplace within three months, driven by a joint pitch with Microsoft’s team that highlighted the ISV’s AI-powered analytics integrated with Azure AI services.
Top Three Questions Partner Leaders Are Asking
How Do We Choose the Right Marketplace for Our Target Customers?
Partner leaders want to know which marketplace - AWS, Azure, or Google Cloud - best aligns with their ideal customer profile (ICP). For example, infrastructure and security companies often gravitate toward AWS due to its strong relationships with CIOs and CISOs, while application software targeting CFOs may prefer Azure for Microsoft’s enterprise ties. Selecting the right marketplace requires understanding customer buying behaviors and hyperscaler strengths.What Technical Investments Are Needed to Meet Marketplace Requirements?
Leaders are concerned about the resources required to adapt their solutions for marketplace compatibility. This includes ensuring multi-tenant architectures, compliance with security standards, and integration with billing systems. They want clarity on the trade-offs between building in-house capabilities versus partnering with external experts, as outlined in the AWS SaaS Factory framework.How Can We Train Our Teams to Leverage Marketplace Opportunities Effectively?
Partner leaders seek guidance on enabling their sales, pre-sales, and customer success teams to integrate marketplace processes into their workflows. They want to know how to train teams to co-sell with hyperscalers, highlight marketplace benefits to customers, and measure success metrics like deal velocity and customer acquisition cost. Partners view AWS Marketplace as critical to their co-sell strategy, but many lack the training to capitalize on it.
Practical Advice for Partner Leaders Entering Cloud Marketplaces
Develop a Marketplace-Aligned GTM Strategy
Start by mapping your ICP to the hyperscaler’s customer base. For instance, if targeting enterprise CFOs, Azure’s integration with Microsoft 365 and Dynamics may offer a better fit. Train your sales team to articulate marketplace benefits, such as reduced procurement time (66% time savings, per Forrester) and access to committed cloud budgets. Repurpose existing sales enablement materials to include marketplace-specific use cases and messaging. Engage with hyperscaler programs like AWS’s APN Customer Engagements (ACE) or Microsoft’s ISV Success to access co-sell resources and account mapping tools.
Actionable Step: Conduct a workshop with your sales and marketing teams to align on marketplace value propositions. Use tools like AWS Partner Solutions Finder or Azure Marketplace analytics to identify high-potential customer segments and tailor your pitch.
Invest in Technical Readiness with Expert Support
Assess your solution’s readiness for marketplace requirements using frameworks like AWS’s SaaS Journey Map or Microsoft’s AI decision tree. If in-house expertise is limited, partner with AWS SaaS Competency Partners or Azure-certified consultants to handle multi-tenancy, security, and billing integrations. For example, implementing secure AI frameworks with encryption and access controls can address compliance concerns, as noted in this AI SaaS guide. Budget for initial re-architecting costs but prioritize solutions that scale, such as microservices or pre-built AI models, to minimize long-term expenses.
Actionable Step: Engage an AWS SaaS Factory architect or Azure AI Foundry expert for a readiness assessment. Focus on one high-impact use case, like optimizing data storage or API performance, to demonstrate quick wins to stakeholders.
Build Co-Sell Relationships Through Structured Enablement
Actively reach out to hyperscaler account teams rather than waiting for them to initiate contact. Register opportunities with AWS or Microsoft to gain insights into customer budgets and decision-makers. Participate in programs like AWS’s ISV Accelerate or Microsoft’s Co-Sell Ready status to access co-sell benefits, such as SaaS Revenue Recognition, which can boost deal sizes. Train your team on hyperscaler-specific sales motions, focusing on how to position private offers or cloud credits to customers.
Actionable Step: Schedule a joint account planning session with your hyperscaler’s partner manager. Use their insights to identify one or two high-value opportunities and co-develop a pitch that integrates your solution with their cloud services, such as Azure AI or AWS Lambda.
Conclusion
Partner leaders entering cloud marketplaces like AWS and Azure face significant challenges in aligning GTM strategies, navigating technical complexities, and building effective co-sell relationships. By addressing these challenges with targeted training, expert partnerships, and proactive engagement with hyperscalers, leaders can position their organizations for success. The questions they ask—about choosing the right marketplace, making technical investments, and enabling teams—reflect a need for clarity and actionable guidance. With practical steps like workshops, readiness assessments, and joint account planning, partner leaders can overcome these hurdles and lay a strong foundation for marketplace entry.
This is part of a 4-part guide:
Part 2 will explore how to scale and thrive in these ecosystems, building on the strategies outlined here to drive long-term growth and customer success.
Part 3 delves into practical advice for scaling sales and thriving in cloud marketplaces.