Mastering Cloud Marketplaces: Winning Strategies for a Shifting Distribution Landscape

Cloud marketplaces have evolved from simple procurement portals into the most powerful distribution channels in modern enterprise software, demanding a deliberate strategy for vendor growth. The shift from traditional distribution to hyperscaler-operated platforms has redefined how software companies reach customers, close deals, and scale their businesses.

The digital economy has transformed how software reaches its buyers. Traditional channels built around resellers and distributors no longer carry the same weight. Cloud marketplaces now serve as the primary gateway for enterprise software procurement. They connect thousands of vendors with millions of buyers through streamlined, commitment-backed purchasing workflows.

This transformation is not merely a channel shift. It represents a fundamental reorganization of power in the technology value chain. Hyperscalers have assumed control over customer relationships, billing infrastructure, and procurement workflows. Understanding how to navigate cloud marketplaces is now a strategic imperative for every software company seeking sustainable growth.

Are Cloud Marketplaces Discovery Engines or Transaction Vehicles?

A fundamental question for vendors entering cloud marketplaces is whether these platforms serve primarily as discovery engines or transaction vehicles. The answer is nuanced. While some organic discovery occurs, relying on it alone for customer acquisition is rarely sufficient.

Most successful vendors drive customer engagement outside the platform first. They then guide buyers back to cloud marketplaces for procurement. This approach is known as the co-sell motion. It leverages the buying preferences of enterprise organizations that maintain existing spending commitments with hyperscalers.

Initially, these platforms functioned predominantly as procurement transaction vehicles. They simplified the buying process for large enterprises with established cloud contracts. However, hyperscalers are actively working to create a flywheel effect. The goal is to foster both discovery and recurring transactions within a single ecosystem.

The overarching principle remains customer-centric. Vendors should prioritize the platform where their existing customer base is most active. This alignment ensures that marketplace efforts match actual demand. Active engagement and strategic guidance of customers remain crucial for converting interest into closed deals.

How Should Vendors Prepare for Cloud Marketplace Entry?

The transition from traditional distribution to cloud marketplaces requires a thorough re-evaluation of vendor readiness. Historically, hardware providers relied on complex networks of resellers and distributors to extend their reach. These intermediaries provided infrastructure, recruitment, and training support.

The advent of software-as-a-service changed this equation dramatically. The traditional value of distributors in storing license keys and managing physical logistics diminished. Cloud marketplaces have effectively become the new SaaS distributors. They handle billing, deployment, and compliance in a single transaction.

Vendors should consider establishing a presence on cloud marketplaces from an early stage. At minimum, a listing on the platform where the product is built provides foundational visibility. There are generally no significant barriers to entry. However, achieving meaningful traction requires deliberate effort comparable to building any other sales channel.

• Define your motion. Decide whether a product-led growth approach or a co-sell motion aligns better with your target buyers and sales cycle.
• Align with customer platforms. Identify which hyperscaler your target customers use most frequently and prioritize that storefront first.
• Invest in readiness. Build technical integrations, create marketplace-specific marketing assets, and train your sales team on platform mechanics.
• Leverage spending commitments. Position your offering so buyers can draw down existing cloud commitments to accelerate procurement cycles.
• Plan for multi-platform expansion. Once established on one storefront, evaluate whether listing on additional cloud marketplaces increases reach meaningfully.

Why Are Hyperscalers Displacing Traditional Distributors?

The rise of cloud marketplaces has dramatically shifted power dynamics within the technology value chain. Historically, distributors held significant influence through their access to enterprise procurement departments and extensive reseller networks. They controlled both buying power from vendors and selling power to partners.

This paradigm is changing rapidly. Hyperscalers are building large sales organizations and establishing direct buying relationships with major corporations. This direct engagement, combined with the mechanism of cloud commitments, gives hyperscalers immense leverage over the entire distribution chain.

The shift is not theoretical. Major technology companies are voting with their actions. Salesforce, a company with its own well-established AppExchange and a multi-billion dollar ecosystem, has begun transacting billions through the AWS storefront. When a company with its own distribution platform chooses to sell through cloud marketplaces, it underscores the irresistible gravitational pull of hyperscaler ecosystems.

While traditional distributors retain value in niche areas such as partner training and regional market access, the core control over customer relationships and transactional flow increasingly resides with the operators of cloud marketplaces.

What Role Does the Co-Sell Motion Play in Marketplace Success?

The co-sell motion is the engine that drives most enterprise transactions on cloud marketplaces. Rather than waiting for buyers to discover products organically, vendors engage prospects through their own sales channels. They then direct those buyers to complete procurement through the marketplace.

This approach works because enterprise buyers benefit from using cloud marketplaces for procurement. They can apply existing spending commitments, simplify vendor management, and consolidate invoicing. The storefront becomes the transaction layer rather than the discovery layer.

Successful co-sell motions require alignment between the vendor's sales team and the hyperscaler's account managers. Building these relationships takes time and consistent effort. Vendors who invest in co-sell enablement typically see faster deal cycles and higher win rates on cloud marketplaces.

How Are Cloud Marketplaces Reshaping the Competitive Landscape?

The market capitalization growth of the big three hyperscalers validates the concentration of power in these platforms. Their dominant position relative to the broader SaaS industry continues to strengthen. Cloud marketplaces are not just distribution channels. They are becoming the infrastructure layer through which modern commerce operates.

This consolidation creates both opportunities and risks for vendors. Those who establish strong positions on cloud marketplaces gain access to unparalleled buyer reach. Those who delay risk losing ground to competitors who have already optimized their marketplace presence and co-sell relationships.

The competitive implications extend beyond individual vendors. Entire categories of software are being reshaped by the dynamics of platform-based distribution. AI-powered solutions represent the fastest-growing segment on Cloud Marketplaces. Vendors with native AI capabilities are finding accelerated adoption through these channels.

What Does the Future Hold for Marketplace-Driven Distribution?

The trajectory of cloud marketplaces points toward continued consolidation and sophistication. Hyperscalers will strengthen their positions as the primary distribution channels for enterprise software. Private offers, custom pricing, and multi-year commitments will become standard capabilities.

The relationship between traditional distributors and cloud marketplaces will continue to evolve. Rather than complete displacement, a more integrated model is emerging. Hyperscalers are collaborating with channel partners to leverage complementary strengths in training, regional coverage, and specialized support.

For vendors, the strategic imperative is clear. Mastering cloud marketplaces is no longer optional. It requires deliberate investment in platform readiness, co-sell enablement, and customer alignment. Organizations that execute this strategy effectively will secure their position in the future of digital distribution.

About the author

Sugata Sanyal

Sugata loves solving complex industry problems in a way that creates hundreds of new jobs and opportunities. Over the past three decades, Sugata has worked in three large Fortune 100 organizations – Honeywell, Philips, and Dell SonicWALL – learning how to put together global teams that can work together to help customers win, create a wealth of new opportunities, and do amazing things. Sugata founded ZINFI with the mission of solving the entire challenge of marketing and selling, both directly and indirectly, through the channel. Over the past several years, his leadership on the ZINFI team has built a highly customer-focused global organization that constantly innovates and always asks how it can do better and deliver more for less.