Using AWS Marketplace for your Fast-growing Cloud Software Business
Guest post by Steven Mih, Co-founder & CEO, Ahana
Ahana is the self-service analytics startup for open source Presto and provides a cloud-native managed service for Presto on Amazon Web Services that simplifies the deployment, management and integration of Presto. It enables cloud and data platform teams to easily provide self-service, SQL analytics for their organization’s analysts and scientists on their S3-based data lakes and other data sources. It is available via the AWS Marketplace with the Pay-As-You-Go (PAYGO) model.
Similar to Amazon.com itself, the AWS Marketplace has a wide selection of software and service-related sellers that work with and add to AWS. With over 10,000 sellers, the concept of “1-click software purchasing” is exciting to everyone in the marketplace, especially to the “builders” of cloud infrastructure.
Drawing from my experience at three software startups that partnered with AWS Marketplace over the last decade, I’ve put together some best practices to help make your AWS Marketplace listings successful. To illustrate the point, I’ll use examples here at Ahana (we offer a managed service for Presto in AWS).
For quick background, Presto’s major use case is interactive ad hoc analytics on your data lakes and data sources. Customers use our AWS Marketplace pay-as-you-go (PAYG) listings for frictionless proof-of-concepts and production roll outs. If you’re a software or SaaS startup, leveraging the AWS Marketplace can be a major accelerator to your business because it makes it so easy to get started.
Why sell on the marketplace?
AWS marketplace is an easy-to-use fulfillment channel for both buyers and sellers. Often times, selling the traditional way involves a long procurement process, lengthy paperwork revisions, and plenty of back and forth communication between the buyer/seller. Through the AWS marketplace, subscribers can find, configure, and launch software with just a few clicks. Instead of invoices and PO’s, the charges just show up on their regular monthly AWS bill and AWS pays the seller for the subscriptions. The first step is to create software listings on AWS Marketplace, which is a fairly easy process. Once your listing is available, you’re ready to take full advantage of what AWS Marketplace has to offer.
Best practices for working with AWS Marketplace
Based on my experience, here are the top 5 best practices to keep in mind when working with AWS Marketplace.
- Leverage Marketing via the AWS Partner Network (APN)
- Make it easy for users to understand where your software fits within the AWS ecosystem
- Sales alignment
- Finance alignment
- Customer success mindset to land and expand
Selling on the marketplace requires cross-departmental, internal buy-in. As typical with a new sales channel, it’s not something you can do in one area without affecting other areas of your go-to-market efforts.
- Leverage Marketing via APN
Today, AWS Marketplace is mainly a fulfillment channel as opposed to a marketing or discovery channel. AWS does provide other marketing avenues through partnerships and content which can be great marketing tools to leverage. The APN allows companies access to additional resources as they progress through 3 tiers (Registered, Select, and Advanced). We’ve found that progressing through these tiers to Advanced has numerous benefits which include:
- Joint webinars
- AWS Quick Start listings
- Solution webpage features
- APN blog guest posts
- Usage credits
- Market Development Funds
Note that none of the above in isolation will make much of a dent. For example, you’ll probably only get one or maybe two joint webinars in a year. But if you leverage all of the programs in one cohesive program, they can be an important basis to your content marketing strategy because AWS has so many users looking for material from AWS.
2. Make it easy for users to understand where your software fits within the AWS ecosystem
There’s thousands of different software offerings on the AWS Marketplace, each with its own value proposition. On your offering page, make it obvious what problem you solve, the value your solution brings for AWS users, and how it fits into the AWS ecosystem. At Ahana, we created specific reference architectures to show how our Presto managed service connects with AWS S3 and other data services.
We also created tutorials on our website for AWS users, and we point to those from our marketplace listing.
3. Sales alignment
While we’d like to see customers just buy software by themselves, it’s much more likely that you’ll need sales assistance to land and expand those customers (see Customer Success below). Your sales incentive plans should be aligned with the Marketplace model. We try to make the offer be channel agnostic to either the customer or to the salespeople. But this can be difficult for one big reason: Pay-As-You-Go.
The PAYGO model is usually very different from most sales booking plans that your team may be used to. The PAYGO usually has a premium on an hourly or monthly basis but it still leaves the question of how to pay salespeople. We try to make the incentives align based on what’s most important to the stage of the company. In most cases where revenue is the biggest priority, the PAYGO incentives would be balanced accordingly. In cases where new logos and market share is more important, then we’ve evened out the balance in incentives between a PAYGO and a yearly contract.
On another note, we also found it helpful to have a pricing calculator on our website. It gives potential customers a quick way to calculate how much they’ll be paying in their monthly AWS bill.
4. Finance alignment
A Marketplace business will take some coordination between Sales and the Finance/Accounting team.
As Marketplace charges a fee for listing, in the early days we tried to make the commissions on these sales be channel neutral to the salesperson, meaning that the commissions would be the same whether the customer bought from the Marketplace or directly. And as some customers can be in trial mode, starting up and unsubscribing a week or two later, our best practice is to count the subscriber as a paying customer after 30 consecutive days of usage.
As a Marketplace seller you get the monthly revenue and disbursement reports. One “gotcha” we found during reconciliation is what the sales team reports versus the disbursement reports. Some customers have custom payment terms which AWS cannot necessarily disclose to us. Again, this needs to be considered with the sales incentive plan.
5. Customer success mindset to land and expand
Now that you’ve got alignment across your business units, it’s time to start selling! From past experience, almost every SaaS company required Sales to assist at some point between clicking of ‘Subscribe’ to becoming fully launched. Without a Sales assisted approach, customers won’t launch. New subscribers may not be familiar with the fulfillment process. A seamless buying process will require support from your Sales team. Make sure your team is familiar with the subscriber process so that they can step in to help where needed.
Most customers will typically start out with a free trial and move into PAYGO. As they grow their usage, assuming you have a connection from assisting the sale in the first place, it’ll be important to keep in touch to understand the changes in usage. As one customer’s growth reaches a certain point, get them into an EULA situation via the Private Offers capability. With Private Offers, you’re pretty much back to the place you started – yearly contracts – but with an AWS Marketplace twist.
AWS Marketplace is a new fulfillment channel for software and SaaS vendors that requires a new approach. I’ve covered my five top best practices to help your company grow through this channel. Increasingly, doing business the traditional way is getting replaced by more convenient offerings like AWS Marketplace. Both vendors and customers can benefit greatly by embracing the cloud way to buy!