AWS Marketplace professional services gain momentum
Partners cite flexible contracting and custom offers as key advantages of selling in the marketplace, but they look for AWS to help with T&M contracting and catalog creation.
The number of AWS Marketplace professional services listings has grown five times in less than a year, with partners citing fast time-to-contract and flexible pricing among the platform's benefits.
AWS opened its marketplace to professional services in December 2020 with 280 public listings from 106 sellers. Ten months later, the AWS Marketplace public catalog features 1,408 professional services category listings from 369 sellers, according to AWS. The uptick comes as more consultancies and ISVs pursue online marketplaces as a sales venue for professional services.
"It's been a great avenue for us to be as creative as possible to do business with our customers," said Brian McNeese, vice president of professional services at VoiceFoundry, which deploys Amazon Connect, a cloud contact center service, in enterprise contact centers. "We definitely see the momentum picking up."
That creativity comes into play in procurement, where working with customers through terms and conditions, redlining and other aspects of contracting can become a complex task. AWS Marketplace "allows us to accelerate that process" in some cases or at least make it less involved, McNeese said.
Flexible pricing, ISV onboarding
Other IT services partners cited flexibility as an advantage of using the AWS platform for professional services sales.
Ben Lingwood, chief innovation officer and global alliances executive at Lemongrass, an Atlanta-based MSP, said the marketplace brings the agility associated with cloud platforms to IT services supporting cloud operations.
"Hyperscalers are disrupting the purchasing models of all aspects of IT," Lingwood said. "It started with infrastructure. Then, with AWS Marketplace, it extended to software licensing, and now it's becoming available for IT services."
Lemongrass provides a cloudlike purchasing model for customers who want a more pay-as-you-go approach for the company's support services. "This is something bigger systems integrators will struggle to deal with," he added. He noted traditional integrators seek multiple-year operating commitments from customers.
Agility also spells quicker time-to-contract, Lingwood said. Lemongrass can create a customized professional service offer and publish it directly to a customer's AWS account. "If you're are looking at speed of delivery, speed of paperwork, [AWS Marketplace] does make that a lot more agile," he said.
For World Wide Technology (WWT), the AWS Marketplace tracks with the company's past and present. The St. Louis-based technology solution provider launched 32 years ago as a VAR, but more recently the company has ramped up professional services sales and digital selling. The company taps AWS Marketplace to resell a range of ISV offerings from vendors such as Cisco (AppDynamics), CrowdStrike, HashiCorp, NetApp, Palo Alto and VMware. WWT also provides professional services around those ISVs.
Year to date, WWT has generated nearly $50 million in AWS Marketplace revenue and could reach $100 million by the end of 2021, said Bob Olwig, vice president of corporate business development at WWT. The addition of professional services in the marketplace dovetails with WWT's goal of doubling service revenue every three years, he said.
The marketplace also offers the "flexibility to bring on new ISVs quickly and quote those ISVs [to customers] in a very bespoke, custom way," Olwig noted.
Customization, automation attracts sellers
The ability to customize offers marked a turning point for consulting partners' use of AWS Marketplace, which has become more channel-oriented over the years. In 2017, AWS launched a private offers program for software sales, which lets ISVs provide custom pricing and contract terms. The company extended that capability to its consulting allies the following year. The consulting partners private offers (CPPOs) program lets partners resell software, under their own pricing and terms, when authorized by an ISV.
"That is when the channel business started to accelerate," said Stephen Orban, general manager at AWS Marketplace. Marketplace customers and ISVs rapidly brought their channel partners onboard, he noted. Nearly 900 consulting partners are authorized under CPPO compared with 12 when the program began.
Marketplace sellers and their customers want automated features that shrink the time it takes to close a contract, according to Orban, who took on the AWS Marketplace leadership post in April 2021. Automation underpins custom offers and quicker transactions.
"We want to automate this entire experience," said Chris Grusz, director of business development at AWS Marketplace. He said a channel engineering team, created in 2018, continually adds features to automate various aspects of the marketplace.
A feature released in September 2021, for example, provided a new private offer creation and search interface. The feature makes it easier for consulting partners to sort through the ISV products they are authorized to resell in the AWS Marketplace management portal, according to AWS. The interface replaces a previous process, which required manual data entry when partners wanted to create CPPOs based on discounted ISV products.
Brian McNeeseVice president of professional services, VoiceFoundry
Other September updates provided self-service automation for consulting partners and ISVs to automate operations, accelerate opportunity closure and, in the case of ISVs, onboard more channel partners, AWS said.
McNeese, meanwhile, cited a new payment schedule as a recent marketplace improvement. A pilot program launched in September disburses payments to partners as soon as customers pay. A once-a-month disbursement has been the typical method.
"We received five disbursements from AWS in September whereas, under the standard program, [we] would have not received any funds until the mid-October disbursement," McNeese said. "As you can imagine, that is a great benefit to our finance group."
Feedback and refinement
McNeese cited the recent cashflow boost as an example of AWS Marketplace being open and receptive to feedback from partners. Partners continue to discuss room-for-improvement areas with AWS.
VoiceFoundry, for instance, has encountered some friction running certain types of contracts through the marketplace. The company conducts its professional services business through fixed-price bids or time-and-materials (T&M) engagements.
The fixed-bid model works as expected in the marketplace, McNeese said. VoiceFoundry can create agreements with a defined payment schedule. Customers accept the terms and receive invoices according to the schedule.
T&M contracting, however, has proved to be somewhat trickier in the marketplace. Currently, VoiceFoundry must create multiple offers for each engagement.
"If we have a T&M engagement with the customer, we will create an initial offer that provides an overview of the estimated fees for the project," McNeese explained. "At the end of month one, we will create a new offer for the customer that will create an invoice for the hours consumed during that month. It is a bit cumbersome, but not so much that we shy away from those opportunities."
McNeese believes AWS will ultimately modify T&M offers so that VoiceFoundry could create an initial offer and then, at the end of the month, update that offer to invoice the hours the customer consumed, rather than create a new offer.
"[The adjustment] would model our traditional invoice cycle and the consumption model used for other AWS services," McNeese said.
At Lemongrass, Lingwood said his company spoke with AWS about how it could use the marketplace to create private catalogs for customers, especially for selling professional services. The consulting catalogs would let customers sign up for multiple, on-demand services. Those packaged services, which Lemongrass plans to develop with customers, could include migrating a legacy system to AWS, executing a disaster recovery test or running an emergency patch cycle, Lingwood said.
"We'll be focusing on that for the next year or so to build that capability out," he said.