In a recent HITT, the speaker welcomed participants and congratulated Nate and his team for their contributions. The discussion focused on the significant disruptions in cloud marketplaces, particularly those initiated by AWS, which have become central to many companies’ distribution strategies. The complexities of selling through these marketplaces were highlighted, including potential impacts on commissions and the importance of vendor due diligence. Advisors were encouraged to engage early with stakeholders and to continuously learn about the evolving landscape to effectively navigate these changes. Overall, the call emphasized the need for a strategic approach in adapting to the rapidly changing procurement processes.
Transcript is auto-generated.
It is time for our high intensity tech training today. And today, we take a deep dive into cloud marketplaces and how to effectively navigate and capitalize on them. Marketplaces like AWS, Microsoft Azure, Google Cloud, beyond that, will demystify these marketplaces. We’ll provide you with insights on how to accelerate deal cycles, access co sell incentives, unlock budget already committed to hyperscaler platforms, and so much more.
We will also take a look at the pitfalls to avoid. I could not be happier today to welcome back to the Tuesday call and our hit training, Telarus VP of cloud, Koby Phillips, and Telarus senior VP of sales engineering, Josh Lupresto. Hey, guys. Happy to have you both here today.
Thanks, Doug. Happy to be here.
Congratulations to Nate.
Cannot tell you how excited we all are to get the hub fully launched and to have a modern platform, guys. You’re gonna start seeing a lot more innovation coming from the Telarus team, and that is all credit to Nate and his team and our our wonderful IT staff that have put a lot of work into that. So congrats to you guys.
And one of the things, right, there were things like we’re gonna talk about today. When we get market disruptions and updates where those can go and you can quickly, go and find the information in Telarus University in the hub, and it’s all now connected. So without further ado, let’s kinda get started here, Josh, and give some education on some of the things that we’re seeing around these marketplaces.
So, you know, Doug gave us a great lead in AWS, Microsoft’s marketplace, and Google’s. You’ve got some others that are out there. But these are the three that we’re really gonna focus on in in the ones that are making the biggest disruption.
And I’ll start by kind of saying what popped this up.
You know, you went to reinvent along with myself, and then you went to Google Next. How big a conversations those are the big shows for my, for AWS and Google. How big are the conversations around, like, marketplace, positioning at those shows with those with those, hyperscalers?
It’s a huge part. I mean, you know, for one, it was a big segment of the floor that, I mean, AWS just had separately from come talk to us about it, come understand what it is. And then if you look back at some of the Googles and the others, it it was part of the conversation with any of the vendors that you would meet and any of the ISE partners that you would talk to. It’s just such a huge part of everybody’s distribution strategy.
And ten years ago, it wasn’t. Right? And now this is a massive centralization, of of distribution, and and that’s what they’re talking about. That’s they’re they’re looking at how do we go to market?
How do we co sell? How do we how do we work with the channel? And, you know, we used to just be these weird parallel ecosystems, and it’s great to see everything converging. And it’s not like, us versus them.
You know, it’s not it’s not those types of things as we might have feared it was, you know, ten years ago when nobody understood each other’s side. So it’s it’s been very, it’s very optimistic to kinda see the conversation and how well everything’s received.
Chandler, let’s go ahead and move on to the next slide because your to your point, this is a major impact. It’s a procurement motion for a lot of companies, and and there’s some nuances that we need all our advisors to be aware of to make sure it doesn’t become a combative type of positioning.
And so we’ll go over the fundamentals. We’re gonna talk about the benefits for our TAs. We’re gonna talk about, like, how the suppliers participate in their alignment and then pitfalls trends and practice practical guidance. Look at that.
I almost read it perfectly. Right? I can read from the slide, guys. Everybody, congratulations.
Let’s go and move on to the next one. So, again, let’s go ahead and talk about where these guys are at. AWS started this, kinda kicked this thing off like they did the whole cloud motion. They have the broadest supplier catalog.
Right? Twelve thousand plus listings. You’ve got Mark Azure Marketplace that’s really come along with strong enterprise licensing and then Google. So, Josh, whenever we you focus on the conversation, a lot of changes have happened around AWS recently.
And let’s go ahead and, like, get into what that looks like and how it works. But, like, with AWS in particular, May first triggered a major event within their marketplace.
Do you care to, like, dive into what that looks like?
Yeah. Look. I think, they’re they’re pushing a lot of spend through here, and they’ve got lots of different offerings. They’ve got public offerings.
They’ve got private offerings. And we can we can come back and kind of explain, a little bit of what that is. And I I maybe just wanna give a little bit of an example, and then you can kinda bring bring me back. And if I if I nerd out too hard, then just cut me off and mute me.
But I thought it’d be a great example to talk about what one of these listings really is and what this really means.
So if if you go in Sorry.
Why don’t we do that, Josh? Chad, we’ll go ahead and move to the next slide so we can show the how the finances work while you walk through the example. I think this is perfect.
So so if you think about let let’s flash back, you know, ten ten, fifteen years ago, you know, where where AWS itself barely existed. Right? So ten years ago, AWS is alive and well. Virtual infrastructure starts to become a little more prominent.
And, you know, back in the day, it used to be, I gotta put a server in a data center. I gotta put an operating system on it. Right? And there’s still plenty of that cooking.
Right? Lots of hybrid environments. But now I go into the AWS portal. I go and say, okay.
Well, what operating system do I want? And it used to just be, well, maybe I just want a traditional Linux operating system on my little virtual machine with two gigs of RAM and some storage, or maybe I want a Windows VM. And that was it. Right?
There’s, you know, ten to thirty Amazon machine images in there, and and that was great. Now as I go into here, I was poking around in here recently. As I go into marketplace and choose the images that I want, maybe I want a specific Palo Panorama instance, or maybe I want some Veeam, a specific Veeam operating system for backups and storage and things like that. There’s over six thousand different images that I can choose from based on what I want and what I need.
And that you know, we’re talking cloud. We’re talking infrastructure. We’re talking software. We’re talking security.
But even as broadly as this, you know, old Cisco firewall that I have here, maybe I need a virtual instance of that. That’s the kind of things and the kind of capabilities that are in here that follow this process that I can then choose to procure. And if we wanna come back to maybe talk about how we’re procuring those, I just wanted to give an example of those are the types of things that, you know, me with my IT hat on and provisioning and infrastructure and management software, that’s expanded my capabilities that I’m now going, oh, man. I could I could go right down this route.
So now I think let’s let’s talk back a little bit about why understanding that’s important in the procurement path.
Yeah. And to kinda give an analogy from what I just picked up, right, from your explanation is this thing started at a strip mall, and now it’s grown into the Mall of America. Like, it’s like you walked in one day and you’re like, oh, this is nice. There’s some boutique stores, and you look around now, and it’s everything that you could think of. And so, guys, I wanted you to to see how this kinda works. Right? Customer goes, goes into the marketplace.
Josh just walked through, selects what they need. Then the the AWS team, right, and AWS’s example, they’re doing the invoicing. They’re handling the money. They’re distributing the payments back out to the to the appropriate vendors.
They take their percentage points, and then, they’re the ones that are then collectively billing the customer. The reason this is so important is to understand the the money flow, and then that’s gonna come back into play a little bit later. If we wanna go to the next slide, Chandler, this kind of, like, also shows the growth. Right?
So now you have security, data and analytics, the SaaS infrastructure, and AI, and machine learning tools. That’s really what’s been taken off of that AI component as you guys might imagine with everything going on in AI. But one thing that I wanna point out, in AWS in particular, May first, they changed a couple of major motions for themselves.
Used to, for the AWS reps and any customers that had a commit of spin with AWS, if anything they bought through the marketplace would retire a certain percentage of that spend up to a certain percentage. And it did vary a little bit on contract, but dinner is twenty five to fifty percent depending on how much of a commit they had. Well, May first, they decided to change that and say the only things that can retire spend and quota are things that are built on AWS.
So now when you go into marketplace, if you’re trying to help your clients and help them navigate this, there’s a little badge that just says deployed on AWS.
If they don’t have that, that does not retire spend anymore. So that’s really what triggered a lot of this marketplace conversation.
And to give you an idea of some of the growth, right, and why this is important for everybody on the call to understand, it’s not just cloud and security suppliers.
It’s Zoom, Genesys, RingCentral, a lot of your big SaaS players in that UCCC market.
And now we’re starting to see even network conversations starting to pop up in AWS Marketplace and data centers as well. So understanding all of these angles and motions are really critical so you can help educate your customers downstream, but also make sure that you’re protecting yourselves. And we’ll get into how to avoid any any, like, conflicts here in just a minute. But I wanted to really let everybody understand, like, this marketplace, to Josh’s point, went from being, like, maybe a security device or maybe, some virtual machines and something like that all the way through again, you want Zoom, you want any of that kind of thing, then you can get that through the marketplace. I’m gonna go ahead and address the question that just popped up in the chat. So when I say retire spend, if you have a million dollar commit to spend, it’s a use it or lose it type of environment.
You can say and this is a real case example.
We had one example where, AWS came in. There was a pretty large RingCentral deal.
And they said, hey. You got about, you’ve got a million dollar commit. I’m gonna use some round numbers for the example.
You’ve got a couple hundred thousand dollar opportunity on the table with RingCentral. If you buy that through marketplace, that’ll help towards your AWS commit and free up some some capital to spend elsewhere if you need it outside of AWS. Or if you’re gonna be short, it helps you reach that goal and not waste, and not overpay. And so, we’ve seen those type of conversations happen, and then just making sure that our advisers have the deal registered and and everything locked in in case that deal does shift to go through a marketplace.
Yeah. I think, to your point, I think the the important thing to know is we’ve had these traditional like, forget about hyperscalers, forget about all of these things for a minute. We’ve had our traditional go to market motions. Right?
We’d register a deal through a provider, and we go through that and engage the resources and all as well. This is, you know, this is engaging additional resources, but the key thing that still matters is the front end of that process is deal reg. If we know that that may be a consideration of, hey. It may the AWS component and this customer may have a committed spend required of a hyperscaler, and they may be considering, exploring is buying that piece of software or that product able to retire some of that spend, we need to be aware of that.
We all need to be aware of that, and let’s deal regs that. Let’s get in front of that. Let’s protect you with that. Right?
Because there’s massive amounts of spend. Right? When we talk about the things on here, security and infrastructure, I mean, we’re we’re talking about hundreds of billions of dollars of committed spend that these hyperscalers represent over a multiyear period of durable spend. So to to Koby’s point, with some of these changes, you’ve got IT leaders out there considering, how do I burn down some of the spend that I have from an IT perspective through this vehicle.
So we wanna help make and raise awareness around let’s consider how your customers might be looking at procuring all these different IT initiatives over time, and let’s be aware if it might be happening down this, and let’s get in front of that.
Yeah. And in fact, that’s one of the number one things for advisors is to walking their clients through it. You know, I’ll give Nick a little shout out in the chat here. He pointed out that the hyperscale, the Microsoft reps, Google reps, AWS reps are highly motivated to get this you know, get their customers to that that spin commit early, lock it in.
And there’s multitude of different reasons for that, I would assume. Right? It’s to just get it out of the way or to then help try to upsell into some other areas, but helping them get and guide them to these motions. Now here’s the advantage for advisors.
As these as these products within the marketplace ex expand, those AWS reps, the Microsoft reps, Google reps, etcetera, are not expanding their product knowledge with that very often.
They might be aware of some of the things that are available, but they’re not in-depth experts at it. And so while this might seem to be a competitive competitive space, and it could turn into that to be transparent, if you align and you work through it, there’s so much value that an advisor can bring in in guiding them through it. And now you’re just turning the marketplace into a procurement angle versus a a competitor. Right? So if you shift and you position yourself correctly in the deal and again, to Josh’s point, reg early, reg often, and protect yourself, then you’re gonna be put in a lot better position, going forward and aligning with the reps. And now you’re both mutually, like, beneficial to driving this through. Right?
You’ve got a number of things that are popping up in the chat where people are are saying, you know, there’s programs and companies that that specialize in this. You’re gonna see a lot more. We’ll even mention a couple by name. Zoom got called out with their wood chipper program, things like that.
So there’s a lot of a lot of the suppliers that are trying to help bridge the gap between our advisors and and our modern distribution channel and these marketplace conditions as well. So the continued benefits is it just helps align. You’re gonna hear from Tango. You wanna talk about a a lean in and a plug, Josh?
You’re getting pretty good at this. It is. And it aligns with, you know, FinOps goals, and I I would assume Jeremy will touch on that a little bit on where Tango really helps drive that, especially in the cloud conversation forward. So let’s go and go to the next slide.
So supplier participation alignment.
Now not all software suppliers participate in cloud marketplaces. So there are catalogs.
We just went through a fun exercise here at Solaris.
We had our engineering team, supplier management team go through, and we are finishing up, the last of this project that identifies everybody that’s in our portfolio that’s on each one of the three marketplaces, which ones will retire spend, and which one have any additional caveats and notes and everything that need to be, given out to our advisors so you guys are aware of it. And you guessed it. That’s gonna be available along with additional training in Solaris University and then ultimately into the hub when you get into the supplier converse or the to the supplier section. So, Josh, really tying everything all together today.
I’m pretty proud of the way this is going so far. Good job. Yeah. Thanks, man.
It’s been a rough it’s been a rough Tuesday. So it’s got we’re we’re I believe in you. I believe in you. Thanks, man.
But these are the biggest things. So there are some some caveats and things to really, you know, be aware of. So let’s go to the next slide, and let’s get into the meat of this thing.
What potential pitfalls? And let’s go ahead and call out the one that’s in bold, and then we’ll walk through the other four. Commission payouts and availability.
Selling through the marketplaces may result in lower upfront and residual commissions for our TAs is like this. There are some additional fees for the suppliers as they do if somebody does procure through marketplace.
These are the things that’ll be noted and you guys will be aware of. And at deal registration and things like that, when we’re working with all of our suppliers, is this is a newer motion for for some. Right? We’re getting different feedback and everything. But everybody understands the importance of knowing how your money is impacted, and we are taking that as our first big responsibility to make sure you guys know anybody that will will cut a difference. So just be aware that that is some of the things, and feel free to ask, you know, take it upon yourself to say, hey. If the customer goes through marketplace, guys, I need to know if there’s any kind of hit that I’m taking, any kind of difference with these suppliers.
I think that’s well within your rights to make sure you ask that upfront is if your customer’s starting to to trend that way so you’re aware of all the different nuances that happen.
Josh, anything else on here that really strikes a chord with you?
Yeah. It it reminds me of just, kind of a parallel of an experience that’s I I I think plenty of others on this call have probably been through before where you’re going down the road. Let’s let’s flashback a few years. You’re going down the road on the deal.
You’re at the finish line. You’re talking to the right guy or gal. You feel like you got this deal locked up, and then all of a sudden, somebody else emerges at the company with a, hey. Did we look at this, vendor?
Or, hey. Did we did we think about it this way? And then maybe you lose that deal because you don’t we didn’t see this kind of dark horse, or we never thought that, you know, this vendor would be a player, but somebody had a relationship or or whatever. Right?
Whatever the case may be.
All those things, those situations teach us is, you know, get a get a multi pronged approach because maybe inevitably your decision maker moves on or gets promoted or or or whatever it might be. I I think this it’s a parallel to how we wanna treat this. Right? It’s just another avenue.
It’s another vehicle. It’s another stakeholder in the equation. And I think when we flush these out early in the process, and, you know, I’m a big questions guy. Right?
And to me, it’s a the one that flushes out all these is how are you looking at making some of these procurements for some of these technology initiatives? What what routes to market are you looking at, or are you already engaged in or considering engaged in?
I think that will help us flush out all of these early and kinda put a broad brush on it.
Yeah. And, again, as you get into it, you’ll you know, Josh, you touched on it earlier that that vendor due diligence requirements, that’s where that’s our time to shine. Right? That’s where we’ve always separated ourselves as as advisors.
Getting into if the public offering doesn’t have it, do they have a private offering that they can then negotiate and tweak? And that becomes less of a click and, you know, click to buy and more of a specialized offer that you have to work with the vendor on and go through and everything like that. But there are a lot of different little nuances. We have, support as always with our engineers and our team to help guide any of those as they pop up and navigate.
And so just like anything else, guys, you’re not alone. We can always help in those conversations. Let’s go ahead and move on to the next slide. Just wanna be a little bit, weary of time here. So the biggest myth, right, marketplace always offers the lowest price on software. Not really.
They do have some, like, that commitment utilization, again, is a big benefit. Speed can create some operational value. But pricing isn’t always the lowest price point, isn’t the the main driver. And that’s the biggest myth that I’ve seen is while ago there is they’ve already got it discounted as cheaper.
That’s not always the case. In fact, sometimes because of the marketplace, you know, fees and everything that the hyper scales provide, there are additional costs on some of the licensing if they go outside of those means. But they do lose those benefits if they have the commit or anything like that. So just something again to be aware of and make sure that you guys don’t fall into that trap thinking this is always gonna be the best price. Oftentimes, we’ve seen negotiated pricing, especially on licensing that can come back a little bit, less expensive than what they get on marketplace.
Chandler, let’s go and go to the next slide.
Biggest trends, and this is why this is a big conversation.
You see the growth of all of these guys. And then with AI and then the security platforms growing like crazy in in these marketplaces, you’re gonna start to see it and it already has. So that that that third bullet point, you guys now have network providers that work with AWS as an example that can retire spend if you sell their network services.
You know, not to not to give too big of a plug to just one supplier on here, but eleven eleven, as a network provider, utilizes AWS’s backbone and now can retire spend for network deals.
It’s a nice wedge in for some conversations, especially if you have any, any, any customers that have those commitments.
And it’s another way to, like, shift dollars around to make it more valuable for those guys. But this is growing like crazy. Josh, at Google Next, what was one of the big conversations they were having?
Oh, I mean, it’s it was all about preceding everything that came out of Google IO shortly after that, which was about Gemini and the models and all the innovation that everything is is fed into that and all the different products that it feeds into. Right? I think when we started out down this AI road a year or two ago, it was, it’s just gonna be about building an LLM.
Like, that’s all I’m gonna need to care about, whose model, when do I use Gemini, when do I use OpenAI, But that’s not it.
That yes. That is a capability that you see with all of these guys, but what you’re starting to see is that capability is weaved into so many other products. And I think that was the that was the big thing at, at at Next. And then shortly after that at Google IO, the release about how it’s interwoven into so many different products.
Right? You know, video models, all kinds of things that we haven’t hadn’t even seen a year ago. And I I think it’s important too to look at, the trajectory of this. So if you looked at, you know, it’s talking about, here on point number one, you know, AWS alone targeting fifty billion in marketplace revenue.
I think two years ago, I think that was about sixteen.
So massive trajectory and direction to pay attention to, this to to the earlier points to bring home about retirement and commitment of spend and things like that.
Huge trajectory on this where these where, again, where ten years ago, there was four providers in the marketplace, and now there’s twelve to thirteen thousand.
So I’m gonna address a couple of the questions, and then we’ll we’ll kinda wrap up and hand it over to Doug and the tango team.
The John. So great question. Yep. Was the primary John’s question was, is the primary purpose of marketplace to be able to buy what you want directly?
Yeah. That traditionally was it. But with the expansion and the with with what came with that expansion came a little bit of complexity and came room for the exactly what we do well. We advise those that need help in supporting their technology, you know, buying trends.
And now the marketplace has really shifted into just another procurement process.
Like, okay, you can buy this directly on contract or you can shift it and go through the marketplace. And so you can start to see that trend happen is is happening more now as they expanding in. And, again, those reps like AWS, Microsoft, etcetera, aren’t always experts at some of these things that are now available in their own marketplaces.
And that aligns to what James just asked. Absolutely. There’s a great great opportunity to partner with those type of reps and help educate on where you bring in value and give clients a better, like, overall, you know, joint value together going through their marketplace, but also advising them on, you know, their purchasing with Zoom, RingCentral, etcetera. One of the questions was, what other suppliers are on we’ll just pick AWS out since we’ve we’ve really highlighted them.
We have in our own portfolio right now, we have seventy different suppliers that are on AWS’s marketplace represented. I’m not gonna go through all seventy, but I’ll highlight a couple of to a couple of them. Sure. Data protection, Cato Networks, Vision, Inzu, Equinix, Fastly, FlexCentral, Genesys, I think I mentioned earlier.
You guys are starting to get the point. It’s all over the map, different different places, in different areas that you can can capitalize on these conversations if needed. You don’t need to push them to marketplace purchasing, but you do need to be prepared if they’re wanting to go that route. And that’s the whole purpose of making sure you guys understand the the landscape that that’s here.
Let’s move into the next slide.
So, again, just kinda understanding the future where we’re gonna go.
The it was a procurement vehicle. This kinda ties back in. I wish I had this up when I was answering John’s question. Now it’s utilized as an integration tool, and then it’s now it’s gonna become that that all encompassing technology ecosystem platform.
AWS was pretty genius in the way they approached and said, anybody that’s that list on marketplace will make sure it retires, spend, will give the benefits and everything like that. And they got everybody, you know, pretty engaged in in understanding what the value of the marketplace was. And then they changed it and said, well, nope. Now it has to be built on AWS, and we have to actually be the one driving the engine behind it, not just the marketplace that it’s positioned on to get those those extra added benefits. So they never my understanding is that was never the big plan for it to take off as much as it has. But just like anything AWS has put out there, it’s just really taken on a life of life on its own and taken off. So we’ll go into the last couple of slides here.
Here’s the biggest, you know, adviser guidance that we can give. Just, market expertise, which we’re trying to give you guys here. We’ll have education in Solaris University.
We’ll hit those value drivers there. Make sure all of the details of, like, why they’re wanting to go through marketplace are, conditioned. And then, obviously, that life cycle support, which is another value add that we always bring in. Right? We’re always sticking with our customers.
We’ll be on the first contract. We’ll like, it’s a it’s a lifetime commitment if they’ll give it to us. So we have no issue there, but just reinforcing that. And then the last thing that you guys will have, again, available until the university, if you go to the next slide, Chandler, are just some engagement questions so you guys can go and prepare it on how to have the conversation with your clients, and some of the some of the key conversation points to have. So, Josh, anything that you wanna put a bow on as we wrap up here?
No. I just think, awareness. Right? I I think awareness needs to be the theme, ask the questions early on of how people are planning on procuring technology and where they plan on, you know, what they’re investing in and where they’re looking at it. And then, you know, we’re we’re happy to come back. And, again, as always, as we always say on these, you have a plethora of resources that would love to help you, get strategic, get tactical as we get into any of these discussions.
But, guys, deal registrations are incredibly important. That’s been the number one thing that we’ve as we talked to suppliers, they’re like, if they if the advisers follow a deal registration process, even if the customer goes through marketplace, we’re covered. If there’s any nuances, that’ll be listed, and we’ll we’ll make sure you guys are aware. But deal registration, again, early and often is always the key. So thank you, Doug, and team for having having myself and Josh, and we’ll hand it back over to you.
Thanks again, Koby and Josh. Cloud marketplace is new to many. They’ve been around for a while. A lot to understand there.
Thank you for the introduction today and for the resources that our advisers can use to find out more. Obviously, going to be a continuing factor in business going forward. So thanks so much for that today. Look forward to having you back soon.