10 Ways Enterprise Selling is changing for ISV’s – Evolving from direct, to channel, to the cloud era
Garry Olah
July 23, 2020

As a student of our industry I have seen enterprise software selling evolve. IBM created this industry and became the gold standard for enterprise direct selling in the 70’s and 80’s. Many other great enterprise sales companies followed like Oracle, EMC, NetApp, Cisco and the like. But even pioneers like IBM learned that leverage was needed and that “controlling the customer” through account management was a myth! This gave birth, In the 90’s, to companies like Compaq and Novell who developed channel models from the start and were quickly followed by Microsoft, Citrix, VMware and many other companies. In the early 2000’s the channel model evolved to a hybrid model with channel elements coupled with direct account management. Most enterprise software companies today are hybrid, but almost all “start-up” with direct sales. You can argue the pluses and minuses of channel and direct, but I am a leverage guy, and my favorite quote from my old friend, Mark Templeton, former CEO of Citrix, is “25,000 people wake up every day selling Citrix and none of them work for us”.

Enter the Cloud Era; So, what’s now different? As Enterprises migrate to the public cloud, the number of “true” public cloud players is small, with Amazon Web Services, Microsoft Azure and Google Cloud Platform being the runaway favorites. Because all cloud services, including the ISV’s are consumed through the customer’s tenant, the Cloud Service Provider “owns” the customer. You must rethink your selling model to take advantage of this additional leverage and align yourselves with partners who think and act in the cloud.

Below are 10 Ways Enterprise Selling is changing for ISV’s:

01. 

Who owns the customer?

Today the major public cloud vendors “own” the customers. Make no mistake about it, AWS, Microsoft Azure and Google Cloud Platform all “own” their customers and will be focused on programs that enable and retain this ownership. This isn’t a negative, but you must create and manage this as a leverage point.

02. 

Marketplaces

All cloud vendors have marketplaces that promote, resell, demo, transact and compensate ISV’s for selling “through the marketplace”. Customers purchase on their AWS, Azure, GCP accounts and the ISV gets paid by the cloud vendor. You are a 3rd party product being sold by the cloud platform to “their” customers. I do realize that they are also your customers, but you are not as strategic as the cloud vendor. Marketplace selling is a new artform and you must become a cloud marketplace expert if you are going to succeed in the cloud era.

03. 

Cloud Sellers

Cloud vendors compensate their sales teams who “co-sell” with ISV’s and other partners when the solution “lands” on their cloud platform. Most sales reps retire 10% of the Total Contract Value (TCV) against their quota which can be a big deal. You must now learn how to Cosell with AWS, Microsoft and GCP. This is an evolving model and will be difficult to master, so have patience and get expert help if you don’t have it in-house.

04. 

Partner to Partner Engagement

With the advent of mainstream cloud adoption, partner roles have changed. Cloud vendors have new technical, marketing and sales roles and responsibilities. Global and regional SI’s have stepped up and become cloud platform experts.

05. 

Sales, Marketing, and Technology

Sales, Marketing, and Technology are the trifecta of cloud platform support. Lean on the cloud vendors for technical, marketing and sales assistance. They have teams and infrastructure to assist you with migration, testing, marketing and positioning and selling in the cloud.

06. 

Cloud Platform Matters

The platform matters more now, and cloud vendors are aggressively competing for market share, and you must stay ahead of their development and aligned with their cloud native stack. Attend quarterly roadmap updates and leverage their resources to best align your technology with the evolving cloud platform.

07. 

Multi-Cloud Strategy

Almost every enterprise has a multi-cloud strategy and every ISV must evolve with them. Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) are the market leaders and have enough capital to compete with each other and have their areas of focus but other public clouds like Oracle, IBM, Alibaba, etc. offer products that might be a great fit for your solutions because of technology stack, co-selling requirements and regional access.

08. 

Don’t Forget Verticals

Not all public cloud vendors are created equally when it comes to verticals. For example, retailers may find it difficult to work with AWS because of the competition they see with its parent company. If you are Advertising and Marketing focused, GCP has a direct connection with the CMO in most enterprises because of Google Search. The top five verticals in cloud are Healthcare, Finance, Education, Automotive and Manufacturing, but this is an ever-changing landscape.

09. 

Messaging and Positioning

Messaging and positioning for customers is different than to partners and cloud vendors. ISV’s must have three sets of messaging and positioning:

  • Customer – This is your standard, what’s in it for the customer but you must be careful in a multi-cloud world to not bring another cloud vendor into one cloud vendors account, particularly if it’s a Cosell.
  • Cloud Vendor – What’s in it for the cloud vendors’ sellers from a customer value and sales commission perspective. How do they make money recommending your solution? How much drag do you have underlying cloud infrastructure?
  • Partner – What’s in it for the SI or Consulting Partner from an overall value perspective. How do they make money recommending your solution? How much drag do they receive by way of cloud services and reselling cloud infrastructure?

10. 

Think Globally

The public cloud marketplaces are global; you need to act global. My company supports customers in 29  countries because of the cloud vendor marketplaces. It’s large scale international leverage, take advantage.

The cloud era is a new and exciting chapter in our industry. If you aren’t on the cloud train, you will be missing out. The cloud business is growing at a faster rate by eating most on-premise solutions. With all disruption comes opportunity. Carpe Diem!

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