Procuring Third-Party Software via Hyperscaler Marketplace

Today you’d be hard pressed to find a company with $0 in cloud compute spend.   More likely than not, that spend goes to one of the hyperscalers: Microsoft Azure, Amazon Web Services, and Google Cloud Platform.  Companies of all sizes in all industries leverage public cloud services to entirely outsource or supplement their IT infrastructure. 

According to Gartner, global IT spend in 2024 was $5.1T, forecasted to grow to $5.6T in 2025.  Of total global IT spend, $595B was spent on public cloud in 2024, forecasted to grow to $723B in 2025. That amounts to a total projected IT spend growth of 9.8% and projected public cloud spend growth of 21.5%.

What does this mean?  More dollars are being spent on public cloud services and it is  increasing at an accelerating rate.

In recent years we’ve seen a welcome shift in the offerings of the hyperscalers with the availability of third party solutions, developed by vendors like IBM, Trend Micro, and the like.  What’s even more exciting is the ability to leverage your committed spend to pay for services via the marketplace.

Committed spend agreements are entered into with the hyperscalers by agreeing upfront to spend a fixed amount of money on cloud services in exchange for discounts on those services.  As one would expect, the more you commit to spend, the larger the discount.  One way to push up your spend is to use your committed dollars in the marketplace on solutions from other vendors.  Typically a business can allocate about 10% of their spend in the marketplace.  This means that if your commitment is $1MM, you can spend $100K in the marketplace.

This mechanism for transacting represents a win for all parties.  Customers can increase their commitments to realize more savings on cloud services.  Simply shifting where you purchase saves you money.  Software vendors are able to realize additional revenue when their solutions are deployed via the cloud marketplace, expanding their market.  And the biggest benefit, resellers can extend offers including third party software and services to their customers.

In today’s world where the support you receive from your software purchase is just as important as the software itself, the ability to work with resellers via hyperscaler marketplace is a game changer.