Show Synopsis

Sit down with Tori Barlow, VP of Marketing at Allbound as she speaks with Paul Liao, Senior Partner, Development Manager of Cloud Alliances at Outreach, and join the conversation as they cover how to go-to-market on cloud marketplaces.

Highlights:

• How to go-to-market on cloud marketplaces
• Pitfalls to avoid
• How to master the art of marketplace partnerships

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The Script

Tori Barlow: Welcome to the Partner Channel podcast, the voice of the Channel. I’m Tori Barlow, VP of Marketing at Allbound and excited to be here with Paul Liao, Senior Partner, Development Manager of Cloud Alliances at Outreach. Thanks for joining us today, Paul.

Paul Liao: Thank you for having me.

Tori Barlow: Yeah, we are all about cloud marketplaces today, which brings me to our wonderful topic, which is cloud marketplaces. You have recently launched on a WS marketplace. Can you tell us a little bit about how outreach benefits from cloud marketplaces and what this exactly means for your company?

Paul Liao: Yeah, absolutely. Cloud marketplaces to me is is kind of a must have channel now in the in the current cloud go to market strategy and to us the ability to leverage and utilize our buyers commit a cloud spending. That’s really a very impactful in terms of having conversations and opening doors and understanding new persona. Maybe in a CFO, CIO or even I.T., just to help getting your foot in the door and find ways to bring more value to our customers. Even though we just launched, I have already received positive feedback from existing customers because they are familiar with the benefits of buying through cloud marketplaces. It’s the kind of positivity that will certainly go a long way when it’s time for renewal or expansion, and then hopefully it will carry that out to new logos and all that exciting things.

Tori Barlow: I think that’s very exciting for you guys, especially being AWS. What are some of just the other fundamental benefits of being on any sort of marketplace?

Paul Liao: I think, for for the buyer’s perspective, there is the idea of building consolidation. You already have your AWS bill or your big three, your Azure, your GCP. So the idea of having a procurement through cloud market, through these big cloud providers is advantageous that it’s easy to track your spending and everything is kind of built through. And there’s a level of confidence knowing that you’re working with a partner of AWS and so on. Then the idea of leveraging that cloud spending, I think it’s huge because then now you know, your investment in a software like outreach can mean more than just the software. It can also mean your meeting, your obligation and kind of furthering your relationship with the cloud as well.

Tori Barlow: Yeah, a good amount of benefits. And I know there’s a ton of demand for moving to marketplaces and getting your product in a good spot to be seen there.

Paul Liao: You know, and from the seller’s perspective, right, so many companies are building a cloud outreach or SaaS company building the cloud. And there are so many modern software companies are building the cloud. So, you know, there are existing relationships with one or two. So as from a seller’s perspective, they just also, like I said, open doors for collaboration with the clouds or collaboration with your buyer, your customers, to bring more value and just be there to support them.

Tori Barlow: Yeah. And I know you you and I talked a little bit about before that folks like yourself can get their SaaS companies listed on marketplaces, but it’s not really a set it and forget it or set it and expect all of this traffic to come to you. Can you talk a little bit about the journey that you’ve experienced and why it’s more of a marathon and not a sprint?

Paul Liao: Absolutely. And, to kind of level set when it comes to cloud marketplaces, there are two types of transactions. There’s the public kind of on the shelf, think about your your Amazon.com experience, come in and buy a pair of shoes. But unfortunately, that is not quite yet where we are today, that people can come and look at a 50k or 100k enterprise software without talking to somebody first. Exactly like you said, it’s not quite the if you build it, they will come. Which leads to the second way of transacting, which are private offers. I think that’s more aligned to B2B customers sellers where it is still your same sales motion. But think of it like a billing integration. Think of it as where you will go and make the transaction and make the most out of it.

Tori Barlow: Yeah, that’s a really great point to continue the focal points of getting folks to come and then reiterating and growing from there. In our pre-interview, you mentioned a type of channel conflict that depicts preferential treatment of your Cloud Marketplace partners. So I’m curious in your perspective, what does that look like specifically and how have you gone to eliminate that?

Paul Liao: Yeah, I think, it’s not kind of your traditional way of thinking channel conflict, but it is still real in terms of, you know, there are a couple of ways to looking at it. For example, when you sell through, say, AWS marketplace, there is a listing fee. AWS does take a cut from it for help transacting. Think of it like your credit card processing fee per se. And I’ve seen companies, this is prior to me joining outreach, just kind of consulting other sellers from listing in the marketplace. They only decide to bake in that listing fee into their pricing. So now we’re looking at a maybe a 3%, 13% premium comparing to if the buyer can just get that from you, from your website. So now there’s this discrepancy of pricing, right? And it can be a little confusing. And, maybe actively or indirectly influencing to go one way or another. And I’ve also seen that if you can extrapolate and expand this a little bit more, if you’re a multicomp seller, a lot of companies are multi cloud or multitenant, now you’re going where your buyers are. You’re listing in both AWS and Azure and maybe in GCP, and they all have different fee structures.

Paul Liao: So are we talking about now four or five different price points for the same product? And we’re talking about enterprise purchasing procurement. That’s confusing and people window shop because that’s what we think about Amazon.com. People do that, right? You could Google that kind of information. So now again, are we picking favors from one seller to another, from one partner to another? Are we making it an easy, convenient experience for our buyer? That’s the kind of the conflict I’m thinking of. And to me, how do you eliminate it? Well, make it neutral. Treat this listing fee as a credit card processing fee or a payment processing fee. That this is something that the company will absorb, understanding that this transaction is going to help you lead additional deals later on because you’re now building relationship with your partner. And 3% fee here, 6% fee there, but working towards that co-sell motion, all of a sudden that really offset. Now you get partner source leads, partner source opportunities and I think the gain really outweighs that fee that’s kind of taking them to a margin.

Tori Barlow: That makes sense, without getting into the nitty gritty. Is there negotiation upfront with someone like an AWS for the fee or do you accept the fee? What’s your typical process for this for our audience who are just now expanding into marketplaces?

Paul Liao: I think right now the fees are all relatively fair across the board. I think, again, there is still discrepancy between Amazon. I think it’s between like 6% to 13%. You know, they’re they’re kind of a tier structure based on the volume of the deal and and whether you have any sort of co-sell relationship with them. But, you know, I think there’s always room for negotiation. But, my advice is these are pretty good deals so far compared to where we were a couple of years ago. We’re looking at 20% fees in some of these cloud marketplaces maybe two years ago. They’re all now down to single digits because they are actively sort of improving and making sure this is frictionless, right? So I know that there are some scenarios where negotiation is possible, but I think that’s a case by case for the listeners that maybe applies to your company. But I think that it’s fair.

Tori Barlow: Yeah. No, fair is always good. And I think yeah, it is a case by case basis. And staying on the topic of maybe folks out there trying to learn about marketplaces, how to position their product in a certain marketplace. Can you walk us through your process? Obviously, you’re successful in and AWS and probably others, but what’s your process of forming alliances with folks like Azure, AWS, those bigger players.

Paul Liao: That’s a great question. To be honest, I kind of had a little head start, I kind of cheated a little bit with AWS because I had previously spent five years working for AWS. So there is some initial, built-in relationship of knowing the programs and the people. So right away, kind of catching up with old friends is a little bit easier than building new relationships. But, you know, in all honesty, APN, which is an AWS partner network, and then MPN for Microsoft’s partner network, they all have really good, robust path to help you sort of your partner journey. There’s a lot of resources, whether it’s self guided or individual programs that can help you basically level up and sort of help you guide you get listed first. I think there’s a global start-up program in AWS, there’s a SaaS factory in AWS, and Microsoft has similar programs that assist the growth program that help you get your foot in the door and help you establish. They all mend for different parts of the journey, for you as a seller. I think the easiest way is to sign up, get started, that to me, is always step one, and start leveraging those resources. Then next is collaborating.

Paul Liao: Microsoft has so many partners, same thing with AWS. How do you stand out? How do you make yourselves more competitive compared to other partners? So start collaborating through co-sell and sharing qualify opportunities. And these are the ways to help you stand out and showing like we are in this with you, playing along, we’re doing what we’re supposed to do. Let’s collaborate, let’s work together. One bit of advice that I got from Microsoft doing a webinar a couple of years ago that really stuck with me is frequently when ISB sign up for a co-sell program, they were asked to kind of include a pitch deck or a one pager and often they just kind of use their standard spec sheet or things that they use for their prospects, and not realizing that you’re, in a way, working with other sellers. They want to speak about your product. They want to sell your products with you and for you in a way, right? So fine tuning that language that when you’re asked to include that kind of enablement material, think about the stuff you enable your own sellers with. So know your audience, know your people. And I think that goes a long way and helps you stand out.

Tori Barlow: Those are really great points. For folks that don’t have a Paul Liao on their team to help them navigate this cloud marketplace world, assuming that when you want to join a marketplace, there’s so many to choose from, how do you start from scratch to identify what marketplaces you should start with? Or not biting off more than you can chew. What’s a couple of pointers for folks out there to look at?

Paul Liao: So the number one is know your customers. We want to be where our customers are. So our priority is AWS because we have a good relationship with AWS and we know our customers and our prospects are all AWS. So knowing that, helped us determine our priority because they still have the largest footprint in terms of usage globally. We want to be where our customers are. So that was that that was an easy choice for us. I think, understanding that this is going to be a marathon, not a sprint. Setting that KPI, setting that expectation among leadership to make sure the buy in, the goodwill, everything stays in is also very important. And lastly, shout out to my previous employer, Tackle IO. They are the industry leading company when it comes to helping accelerate that go to cloud marketplaces. They really take the integration out of the equation for you. So, outreach we get to focus on creating the best product for our customers and we let Tackle worry about the integration with these cloud marketplaces so we’re not taking resources away and really speed up our time to market.

Tori Barlow: That’s really interesting. Yeah, I feel like Tackle has a lot to offer that folks should check out if they’re interested in marketplaces. And then obviously this is a recent launch for outreach, but for anyone building a case to join a marketplace, it obviously takes a good amount of manpower, effort, relationship-building, and time investment. So what sort of KPIs are you hoping to see with this placement on AWS, or really any marketplace? And how do you communicate that to execs in your organization?

Paul Liao: That’s a great question and, you know, and I think I sid earlier: know your audience, right? So every every exec is going to think of something differently and every every company is going to treat it a little bit differently. But to me, there is the standard like how many deals do you transact through marketplaces, the number of new logos and number of co-sell opportunities, deals, registries, so those are pretty standard and you can’t go wrong with it. I like a few unique ones. If you want it can measure time to deal. So quote a deal where, in theory, marketplace will accelerate that sale cycle. So by measuring that, comparing to things that are taken down direct, you can kind of measure yourself to see, are we truly bringing that efficiency to our team? If not, where can we improve and where we can we fine tune things? I like that metric a lot. For me right now, my favorite since we’re just getting started, I want to look at, internally, adoption rate. I love to see our field talk about marketplace confidently and I want them to feel empowered to bring it up to their prospects. So I want to look at, hey, am I supporting enough opportunities. Do they know how to come to me? So that kind of adoption rate to me is very important, at least short-term early on to make sure I bring this out. The success of the program depends on whether people take advantage of it. So getting the words out, that to me is something I’m looking at.

Tori Barlow: Well, Paul, we wish you the best in your recent launch with Outreach on AWS and hoping for good things. And thank you for joining. And thank you to you, the listeners, for joining us here at the Partner Channel podcast. If you like what you heard, subscribe to our podcast episodes wherever you like to listen to podcasts.

Paul Liao: Thank you for having me.