Hyperscalers, ISVs, and AI: Shaping the Future of B2B Software Distribution

This chapter provides a historical overview of how cloud marketplaces evolved from a largely uncontested market to a critical sales channel for B2B software. It explores the early challenges faced by pioneers like Tackle.io, including the lack of APIs and the need for creative engineering to automate complex commerce workflows. The chapter highlights the pivotal shift in the market, driven by the digital transformation of B2B procurement and the changing behavior of buyers who now demand the benefits of purchasing through these platforms. It also details the early days of experimentation, showing how the company’s initial focus on AWS was a critical first step in building a repeatable and scalable business model.

This section breaks down the four core components of a successful go-to-market strategy in the cloud era. It details the importance of a data system for identifying buyer intent, the necessity of co-sell automation to connect ISV and cloud provider sellers, and the complexities of marketplace automation for managing diverse business models. The chapter also emphasizes the value of a unified user experience, particularly through integrations with systems like Salesforce, which puts these capabilities directly in reps' hands. It explains how these pillars address the needs of multiple personas within an organization. They can be applied to different stages of a company’s growth, from early-stage startups to at-scale enterprises.

This chapter looks to the future, exploring the powerful teamwork between AI and hyperscale platforms in shaping B2B software distribution. It discusses how hyperscalers are extending their marketplace and co-sell models to a broader range of partner types, including MSPs and SIs, to create a more robust "last mile" distribution. The chapter also examines the transformative role of AI, speculating on new distribution models and the "decomposition of marketplaces," which allows for embedding purchase functionality on a company's website while still leveraging the cloud’s infrastructure. It emphasizes that the future will be defined by the ability to integrate multiple solutions into single purchases and digitize the system integration experience.