Private offers in hyperscaler marketplaces

There is a lot of buzz these days around hyperscalers and the availability of what they are calling private offers in their marketplaces. The reasons are that marketplaces have finally evolved to offer a “best of all possible worlds” approach:

• Flexibility, consolidated billing, and better use of credits for customers who transact through the marketplaces.
• Direct involvement of a customer’s preferred partner, who often provides additional products and services.
• Ongoing technical support from the independent software vendors (ISV) who published that marketplace solution.

The marketplace motion of today has a lot of value for customers and partners alike. Very simply, the customer requests (and negotiates) an individual, “private,” offer from the ISV and partner. This is no different than today’s motion, except at the very end — i.e., the transaction stage — the customized offer is built in, and offered via, the chosen hyperscaler’s marketplace. 

What are these offers? How do they work? And how do you benefit? This blog post will try to shed some light on what’s driving today’s cloud marketplaces and how it can impact you.

First, a bit about marketplaces

All three major hyperscalers (an emerging term for what were commonly known as cloud providers) — AWS, Microsoft, and Google — have always had a strong online presence, so it was logical for them to build consumer-facing marketplaces that offer customers pre-vetted software, tools, and services. These marketplace solutions are readily available and seamlessly integrated with that particular hyperscaler’s platform. Marketplaces serve a number of purposes:

• A place to promote that hyperscaler’s various paid-for cloud services.
• A place to connect to knowledge centers and resources around everything cloud.
• A place to acquire licenses, free trials, and test drives.
• A place to find and license professional services such as assessments.
• A place to compare various solutions.
• A “frictionless commerce” marketplace — customers can license anything, anytime, provided it’s listed on that marketplace.

Barracuda was an early adopter of these cloud marketplaces and has published solutions in the marketplaces of all three major hyperscalers, so the marketplace motion and evolution has been embraced in the solutions we offer there today.

Hyperscalers and ISVs

Hyperscalers were quick to embrace ISVs on their marketplaces. From the beginning, ISVs filled numerous holes in early native cloud solutions. As the cloud has gone mainstream, ISV solutions became more relevant. Hyperscalers quickly realized that their customers often had favored solutions, weren’t “one-vendor” shops, and wanted that freedom of choice between vendors and solutions. Because ISVs are typically specialists, their solutions are generally more extensive and satisfy customer needs that the more basic hyperscaler solutions could not.  So, ISV (aka third-party) solutions got a prominent place in all hyperscaler marketplaces.

Hyperscalers extended their enterprise agreements (pre-negotiated minimum time-delimited spend commitments) to cover third-party (ISV) solutions — i.e., customers could use committed spend for any solutions offered in their marketplaces. Because these commitments are time-delimited, it’s “use it or lose it.” Marketplace transactions helped customers consume — and often increase — those commitments. They could also get features like monthly billing, which is less common among third-party solutions.

For the hyperscalers, this also provided a subtle “lock” on their customers:  Hyperscaler-specific commitments meant customers would naturally look at that hyperscaler’s solutions first and keep the customer in their store, regardless of what solutions they’re licensing.

Private Offers: Marketplaces vis-à-vis partners

By their nature, marketplaces were built with the vision of e-commerce — i.e., direct engagement between customer and hyperscaler. Think of it as Amazon for IT (after all, they started it). Amazon’s implementation of e-commerce has revolutionized not just how retail operates, but how customers think about shopping and purchasing a whole range of goods. 

Cloud products are obviously software (nothing physical involved), so one would think it’s natural for customers to want to go directly to the source to purchase software. But it doesn’t work that way for a plethora of reasons: 

• Very few IT decisions are “spur-of-the-moment.”  (Even critical items still often require a project, budgeting, etc.)
• Very few IT and security professionals run their shops unaided. Security consultants, MSPs and MSSPs, project consultants, and cloud architects are just some of the partners routinely engaged.
• Many ISVs were either highly reliant on partners or, like Barracuda, totally channel focused. 

The Private Offer, as originally conceived, didn’t fit the reality — something more flexible was needed.

• It needed to accommodate new partners, such as those who focus on security and managing their customers’ infrastructure and solutions.
• It needed to include distribution, as customers and partners alike are looking to shrink their pool of vendor relationships. Distributors often function as aggregators and are more inclined to want a revenue share or commission versus buying and reselling software.
• It needed a means to include solutions, services, and even multiple providers in a single, combined motion.  

Enter the private offer and multi-party offers for ISVs

As cloud went more mainstream, so did the need for cloud procurement to match the expectations customers already had for IT solutions. They wanted the ability to negotiate terms and prices with for third-party (ISV) solutions, and they wanted their preferred dealer involved, offering additional services and often turnkey management. How would marketplaces play in this environment?

Quickly building on the mechanics of private offers, the three hyperscalers began building and rolling out what became known as multi-party private offers to include that critical partner element. What a multi-party private offer is, essentially, is a private offer built for a partner who adds their own margin, services, etc., onto the offer and then delivers it to the customer via the customer’s cloud portal. This preserves the partner-to-customer relationship, includes the channel and the ISV, and transacts through the hyperscaler’s marketplace.

Benefits to customers for multi-party private offers

There are several reasons why a customer might prefer to do business with a channel partner rather than directly with the vendor or marketplace.

• Expertise and guidance: Resellers often specialize in specific industries or product categories and might be able to offer custom recommendations based on their knowledge of the customer’s business needs.
• Bundled solutions: Resellers can combine products from different vendors and support integrations between a vendor and a proprietary or other line-of-business application.
• Additional services: Services like installation, configuration, training, and ongoing support are often provided by both vendors and resellers. However, the reseller may be more flexible in how these options are offered to customers.

For many of these customers, the multi-party private offer provides a “best of all possible worlds.” They can transact how and where they want to transact, and they can take advantage of the benefits marketplaces provide, including leveraging committed marketplace spend, yet retain their existing partner relationships.

All Barracuda hyperscaler solutions are eligible for private offers. Channel partners can participate in multi-party private offers for their clients simply by partnering with the solution provider (i.e., Barracuda).

Ideally, trusted partners steer their customers toward the solutions that will best fit their needs, but there are still choices the end user needs to make:

1. Identify the issue or issues they’re trying to solve. This ultimately determines which solutions best fit your needs. Barracuda solutions fiercely defend data, applications, networks, and email. Our comprehensive cybersecurity platform protects organizations from all major attack vectors.
2. Identify which hyperscaler you use or would like to use for these solutions. While Barracuda products provide a consistent user interface, the behind-the-scenes integration is tailored to each hyperscaler.
3. Work with your current Barracuda partner to inquire about a private offer. If you’re unsure of finding the right partner to solve your specific challenges, Barracuda can find one for you. And if your preferred partner isn’t yet a hyperscaler partner, Barracuda can help them with that process as well.

With these multi-party private offers, the cloud marketplaces have truly evolved into a perfect solution for many customers:

• Customers gain increased purchasing flexibility, including leveraging already-committed cloud spend.
• Trusted partners remain key to delivering the solution and can provide the additional services customers want. 
• As a third-party ISV, Barracuda can continue providing solution enhancements and our award-winning technical support.

Want more information? For starters, check out our solutions in the marketplaces. Many even include a link to request details about a private offer for that solution. Barracuda’s sales team routinely builds private offers with partners for their customers, and we’re happy to help get those partners who aren’t hyperscaler partners engaged with AWS, Google, and Microsoft.

Find out more about what Barracuda has to offer in the different marketplaces:

• Barracuda solutions for AWS
• Barracuda solutions for Google Cloud Platform (GCP)
• Barracuda solutions for Microsoft Azure