Microsoft, Google and AWS have the largest cloud marketplaces. What differentiates these three cloud marketplaces?

The market share for cloud marketplaces mimics the cloud market share pretty closely. That’s the easiest corollary to draw between them. They all have different incentives. They all have slightly different formulas.

Today, AWS has slightly higher fees because they have the most market share, but they also have the most [volume] flowing through. They have the most mature co-sell process. So from a value standpoint, the perception is there is value for the fees exchange.

Microsoft and Google last year changed their fee structure to be more competitive and more aggressive, where they lowered the fees from a Marketplace standpoint, in order to go on the offensive to capture share.

They all pay salespeople in different ways with different percentages for these enterprise agreements. In general, we continue to see all three of them are winning. They’re all growing with the ecosystem.

For all the platform providers, it’s how do they drive core service consumption? They want to be able to have a third-party product that complements their first-party core service. The combination of those gives the buyer the best outcome possible. So there’s multiple benefits. The fees are one benefit, but driving consumption is another benefit for each of them.

Can you explain what these fees are?

It’s a transaction fee. So it’s different than a royalty structure. Some other marketplaces have a royalty-based structure—like Salesforce AppExchange—where if dollars flow through the marketplace, there’s a royalty associated with your product because it’s listed in AppExchange.

The hyperscalers [AWS, Google, Microsoft] take a different approach to that, where really you’re only paying a fee if you’re executing on that transaction in marketplace and using the cloud budget dollars.