Getting Started (Realistically) with Cloud Marketplaces in 2021
Eric Snyder, Senior Director of Business Development at Auth0, recently sat down with Tackle’s CRO Don Addington to share his story about starting, then scaling, on Cloud Marketplaces.
Auth0 is a leading identity and authentication platform for customer-facing revenue-generating applications. They were recently featured as a success story in State of the Cloud 2021 from Bessemer Venture Partners for their 10x year-over-year Marketplace revenue growth.
We’ve captured the highlights of the discussion here.
First, Do No Harm
Early in his Auth0 tenure, Eric could see the stars had aligned for a Marketplace listing. “We had a strong sales team, a strong direct sales motion, and an incredible product in place,” he said. “That’s all the ingredients for a successful Cloud Provider partnership. I saw Marketplace as the last remaining piece to make it a truly holistic relationship.”
At first, Eric’s Marketplace pitch met with some resistance. “Leadership wanted to know more about the necessity and value,” he shared. “So, I put together some ideas and projections on what I thought it could mean to our business in the long haul.”
Don reiterated the importance of considering KPIs beyond customers and dollars at first, because the Marketplace is ultimately a journey. “You should plan to look at things like the time required to close a deal, the time between a first and second deal, and the size of the deals you close on Marketplace versus other channels,” he said.
Eric knew he had to proceed carefully, adding a new go-to-market channel to Auth0’s mix. “When we started, the idea was to not do anything that slows anyone down,” he explained. “We had good conversion rates from sign up to close, and we didn’t want to cause any harm to any of those metrics or statistics.”
The MVP Approach
With the greenlight to go ahead, Eric asked senior leadership, sales, and product teams what was possible for launching Auth0’s first Marketplace listing. “They said they’d put it on the roadmap—maybe for six months out.”
Eric eventually took matters into his own hands. “I realized I needed a catalyst, something to push Marketplace up the priority list,” he said. So, he decided to find and arrange his first deal.
“We located a customer with a relatively immediate need, and we were a perfect fit,” he said. “They explicitly wanted to buy through the Marketplace to tap into their committed spend and avoid onboarding a new vendor.”
Eric asked AWS for recommendations on how to get listed quickly and make the deal happen. That’s how he found Tackle. “We were able to get up and running with Tackle’s help in under a week,” he said. “We listed and closed our deal 24 hours later.”
For their first listing, Eric and Auth0 took the minimal viable product (MVP) approach. “You have to think of Marketplace as a strategy that’s going to evolve,” stated Don. “All Marketplaces have things they want you to do. Some of those things can wait for later. Figure out the minimal amount you need to get going and start building up wins, and then you can do more. It’s perfectly okay to try out something without diving all the way in and without using all the bells and whistles right out of the gates.”
Don explained that many of Tackle’s clients get stuck in the process of trying to get listed with the goal of auto provision that requires busy teams to put in even more engineering time. “You can shorten the cycle by getting something listed in a way that’s an extension of your direct selling motion,” he added.
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The Evolution
After launching Auth0’s first listing, Eric and the Tackle team discovered that, with some changes, Auth0 might be able to generate more revenue. They also built a new listing made possible by improvements in the AWS Marketplace system. “That really accelerated our transactions and gave us the ability to hit the ball out of the park,” Eric said.
Using Tackle’s platform, software sellers can easily change their Marketplace strategy or make use of new functionality with no need to go back to engineers and cause further delays. Don referenced Marketplace’s role as a proving ground of sorts where sellers could test out strategies and new approaches without getting too involved in the product side of things.
Simple but Powerful
“Anyone can go to our website and sign up for our service,” Eric said. “But we wanted to support our sellers who were reaching out to the higher-end, larger-scale use cases. We made a conscious decision to only provide the enterprise version of our platform through Marketplace, at least initially. That gives us the ability to pursue and close these large deals and manage our selling motion almost as if it’s direct.”
“You have to be careful not to make Marketplace sales look or sound too difficult,” Don agreed. “It has to be an extension of what you’re doing, just another path to the wallet for a sales team. Sales should be able to identify the right kind of customers with some questions, like ‘Is your company strategically aligned with the Cloud Provider’ and ‘Do you spend a lot of money?’”
Don also pointed out how most Tackle customers start out using Marketplace as an extension of their existing sales cycles and do Private Offers with custom pricing and custom terms and conditions, much like a direct deal.
“All of our deals except one have been Private Offers,” Eric said. “They are easy to do, and they meld with our sales team’s approach. It also makes it easy to have conversations early in the sales cycle about where customer workloads live and their cloud relationships.”
Taking Off
Over the years, Auth0’s Cloud Marketplace presence and wins have expanded significantly. “We used to be in a cycle of trying to figure out how many deals we were doing on a yearly basis, which was a very small number originally,” Eric said. “Now we’re looking at it every week and every month.”
Eric noted that many of Auth0’s larger transactions now go through Marketplace, and they tend to close faster. “We can get documentation into the hands of the customer quickly,” he said. “They don’t necessarily have to go through the onboarding process with us as a new vendor.”
Don explained how tapping into the buyers’ existing cloud budgets supports speedier closings as well, bypassing legal and vendor management hurdles.
Eric attributed Auth0’s success to date to the work of his sales team and emphasized the importance of recognizing their efforts. “I think this is great advice for anybody, and I wish I had thought of it,” he said. “When someone in your sales group does something awesome with Marketplace and with your partner, be sure to tout that person, celebrate them when you have a chance, because everybody loves that. It’s the greatest thing. Others will want to be part of it.”
According to Don, getting the right salespeople on board makes a difference. “Identify those reps who like doing new things. Focus in on a few of them, get some wins under their belts, and then create some billboards for their success. They can be powerful evangelists.”
“The more wins you get, the easier it is to convince people that Marketplace is the place to be,” Eric added. “We’ve also had folks on our sales team tell leadership that some deals wouldn’t have gotten done until 2023 if we weren’t on Marketplace. You have to be on there to get a shot at the deal.”
Provider Perks
Eric mentioned the multitude of benefits and opportunities available to sellers who actively engage with the Cloud Providers. “We participate in the co-market, co-sell, and co-build theory of AWS,” he said. “We take part in all the summits, events, and campaigns that we can, because that’s where our customers live. And we take those leads that turn into opportunities and we register them with AWS for co-sell. On top of that, we have a co-build mechanism where we’re building integrations with AWS services. We’ve also received wonderful insights and advocacy from AWS on hundreds of accounts that we’ve engaged on. This is what I was envisioning at the start when I talked about a holistic relationship. We receive tremendous value from being in the Marketplace.”
“There’s much in the Marketplace for the buyer, the seller, and the Cloud Providers,” Don added. “The very best programs stitch all that together really well. The more software and the more diverse software a customer buys and sources through AWS, for example, the stickier that customer becomes to AWS, and vice versa. So, field reps want to continue selling things that grow the commitment of that particular buyer.”
While the idea of buying software through the Marketplace to spend down pre-committed dollars is well known, Don says he’s now seeing the flip side of that. “A lot of procurement and strategic sourcing is becoming more proactive,” he said. “As buyers are refreshing deals with their Cloud Providers, they’re factoring in how much software they could source through their Marketplace and considering ways to get even better discounts.”
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