Written by Mark McDaid, Head of Alliances and GTM at SEP2.
Connect on LinkedIn.
spoiler alert… it’s both!
Background
At SEP2 we are always looking for ways to make things easier for our customers. This could be the solutions and services that we offer, the way we communicate or – in this case – through procurement.
SEP2 are a cyber security specialist managed security service provider (MSSP), which means that since 2016 we have transacted in what you would call the ‘traditional’ model. The vast majority of our vendor partners have 2-tier sales models, which means that a distributor sits in-between the vendor and the partner (us).
In recent years SEP2 have developed an extremely strong relationship with Google Cloud. In addition to basing our WINGMAN MDR service on Google SecOps technology, we are also proud to call ourselves an end-to-end Google Cloud Security Service Provider, covering everything from the SecOps platform, Google Threat Intelligence, Security Command Center Enterprise (SCCE) and Chrome Enterprise Browser. Through this strong relationship we have been exposed to the benefits of marketplace transactions much earlier than most other organisations in our space, and for the last few years we have been utilising the traditional model of 2-tier procurement, alongside being a fully-fledged ISV on Google Cloud Marketplace.
A recent Forrester report stated that channel partners selling via AWS Marketplace can close deals up to 50% faster than via the traditional procurement routes.
Canalys predicts that global sales of third-party vendor software and services through cloud marketplaces will hit $45b by 2025, up 84% over 5 years.
What is a Cloud Marketplace and What are the Benefits?
A cloud marketplace is an online platform designed to allow organisations to centrally and seamlessly procure software and cloud-related offerings. The main cloud marketplace providers are AWS Marketplace, Google Cloud Marketplace and Azure.
As well as purchasing solutions, customers can also use the three leading cloud marketplace platform to discover, trial and purchase software, services and solutions from listed ISV’s (Independent Software Vendors).
That’s where we come in!
The main benefits for customers using a cloud marketplace are that it is a very streamlined and convenient way to purchase software and services. In addition:
- Cloud marketplaces have the functionality to provide trial licenses to allow a customer to move from test to a production environment seamlessly
- Terms and conditions, supplier agreements and legal language is pre-agreed as part of the ISV onboarding and so is built into the marketplace agreement
- Billing is simply added to the existing cloud account and can be consumed in a way that best fits the customer
- Committed spend for the cloud providers can typically be drawn-down which can result in the client gaining additional benefits (specifically cost-consolidation/economies of scale) by bringing their software spend into one place
How Can SEP2 Help?
At SEP2 our priority is to be a trusted advisor to all our customers and prospects. We are able to transact via all three major marketplace platforms and so have put ourselves in a position where we can therefore meet the customers where they are. We have gained a significant amount of expertise in this space and can comfortably provide guidance on the best available options for a customer when it comes to procurement of specific solutions and services.
Where Does This Leave Distributors?
Distribution partners that truly add value and are willing (and able) to adapt their go-to-market strategies to align with the adoption of cloud marketplace will win big and maximise this new opportunity. Those that don’t will find it exceedingly difficult to justify their place in the channel eco-system.
There are some fantastic, very successful distribution partners out there (we are lucky enough to work with some of them) and the reason they have been so successful and have stood the test of time is because they have pivoted with the market and demonstrated their ability to add value in an ever-changing market.
Cyber security solutions can be extremely complex, and having a partner that can provide expert guidance around solution design, ship hardware to multiple locations around the globe, offer solutions made up of multiple vendor technologies and provide payment terms and schedules that meet a customer’s bespoke requirements is still incredibly valuable and will remain a key route to market for a large number of vendors and MSSP’s alike.
We are also very lucky to work with one or two distribution partners that specialise in bringing new technology to market and specifically to the UKI region. This is invaluable and not something that we typically see from cloud providers, as they tend to focus on more established vendors due to their desire to drive increased cloud consumption and leverage marketplace listing fees.…. although the meteoric rise of Wiz on the back of their relationship with AWS might be the exception to this or the start of something new in this space but that’s a subject deserving of an article to itself!
To reinforce this theory, we have recently seen the adoption of DSOR (Designated seller/signature of record) for AWS and something similar for Google Cloud Marketplace, which allows distribution partners to facilitate deals via the cloud marketplace. This agreement is mutually beneficial as it allows AWS to access the thousands of channel partners around the world currently being managed by traditional distributors and allows the distribution partners to secure their role in the cloud marketplace economy. I think this kind of collaboration is something we are likely to see more of in 2025.
Summary
In summary, at SEP2 we believe that leaning into the functionality, convenience and flexibility afforded by cloud marketplaces is going to make our customers’ lives easier It’s therefore an absolute priority for everyone driving the strategy at SEP2, and the main reason we are already listed on all three major marketplaces as an approved ISV or channel partner. However, as long as distributors are truly adding value, they still have a strong opportunity for growth and differentiation with MSSP’s and end users in today’s market.
Want to know more? Get in touch with the SEP2 team today!
Follow us on LinkedIn to keep up to date with SEP2 news and updates.
