Why the print industry must be open to cloud marketplace opportunities

July 27, 2021
Article, Infographics, Research, Trends

As more businesses embrace the cloud to leverage the benefits of highly scalable, on-demand resources, B2B procurement is also shifting away from traditional sales methods to online channels. Online cloud marketplaces offer a significant opportunity for print manufacturers, ISVs and channel partners to extend reach to a broader customer base.  According to Quocirca’s The Rise of Cloud Marketplaces Study, 76% of organisations are already using cloud marketplaces such as those on AWS, Azure and Google Cloud Platform (GCP) to procure and provision cloud solutions. 

 The changing B2B buyer

Even before the COVID-19 pandemic, B2B procurement was changing. B2B buyers now expect a personalised and frictionless buying experience favouring virtual interactions over in-person sales interactions, particularly as Millennials become more involved in the technology buying process.

Amazon Business in particular has been hugely popular. Launched in 2015, more than five million businesses now use it, including multinationals with thousands of employees able to log in through a single account. Its sales reached an impressive $25 billion in 2020, more than half of that netted by third-party sellers using the platform. That underlines how important it is for vendors to get their offerings listed on relevant marketplaces.

Quocirca’s study revealed that, over the past year, 54% of IT buyers had purchased office printers through an online marketplace. Interestingly 37% had used them to buy printers designed for home use. This has been driven by the pandemic, and the sudden increase in working from home it precipitated.

Meanwhile cloud adoption continues to increase, spurred by businesses accelerating their digital transformation over the past year. Quocirca’s research reveals that, in the next two years, almost half (46%) of organisations expect their IT environment to be running fully in the cloud, up from just 15% today.

As a consequence, B2B procurement is shifting from the traditional models that aligned with the on-premise environment to the dynamic world of the cloud. In Quocirca’s Cloud Marketplace study, 76% of respondents indicated that they already use online cloud marketplaces (such as AWS, Azure and GCP), with 55% using online B2B marketplaces such as Amazon Business. Just 30% use direct sales and 25% indicated they use a formal tender/RFP process.

The increase in cloud adoption along with the online preference amongst B2B buyers is creating a rise in the use of online cloud marketplaces for the procurement of cloud products and services.

 The rise of the cloud marketplace

A cloud marketplace is an online store that enables ISVs to market, distribute, deploy and manage their products and services. Cloud marketplaces allow companies to find and view different products and solutions and compare pricing, while offering shorter buying cycles, automated billing and invoicing, along with greater transparency and free software trials. Marketplaces offer buyers a wider choice as they aggregate products from a wide range of third-party providers. For enterprise cloud buyers, marketplaces also enable cloud-committed spend to be drawn down – such as via the AWS enterprise discount program or committed use discounts with GCP.

Examples include the AWS, Azure and Google Cloud Platform (GCP) marketplaces. Microsoft also has the AppSource marketplace which includes business and industry solutions, such as apps that integrate into Microsoft 365, Dynamics 365, and Power Platform services. These hyperscalers are all actively building and growing their marketplaces. For instance, the AWS Marketplace offers more than 10,000 listings across 50 categories with over 310,000 active customers on the platform.

According to Quocirca’s Cloud Marketplace Study, the most popular cloud marketplace is the Azure Marketplace, used by 60% of respondents, followed by 51% using the AWS Marketplace and 42% using the GCP Marketplace.

As well as the public cloud marketplaces, vendor marketplaces are available from vendors such as Oracle, Salesforce, Lenovo and HPE alongside independent marketplaces from distributors such as Ingram Micro.

Increasingly, cloud marketplaces also offer consulting or professional services provision, enabling channel partners to engage directly with marketplace customers. For example, in December 2020, the AWS marketplace opened its platform to professional services. This enables customers to not only find and buy third-party software but also the professional services needed to support the full lifecycle of those products, including planning, deployment and support.  AWS also offers a Consulting Partner Private Offers (CPPO) programme, enabling customers to access a channel partner directly, while gaining the benefits of simplified procurement through the AWS marketplace.

Growing preference for procurement of print solutions via cloud marketplaces

Quocirca’s research reveals that 62% of organisations prefer to purchase cloud printing or document workflow solutions through a cloud marketplace, with less than half favouring MSPs, IT channel partners or direct from the vendor. Larger organisations are most likely to prefer a direct vendor approach (55%) compared to 38% of smaller organisations. The US is much more positive about the use of cloud marketplaces (71%), as are smaller organisations with 500-999 employees (68%).

This trend looks set to continue, with 82% saying they are likely to purchase through a cloud marketplace in the next two years (44% say they are very likely and 38% are somewhat likely). The US is well ahead, with 63% saying they are very likely to, compared to just 25% in the UK. Organisations with 500-999 employees show a greater interest – 51% are very likely to use cloud marketplaces for print solutions compared to 36% of larger enterprises.

Overall, the preference for – and greater adoption of – cloud marketplaces among smaller organisations may be reflective of the historical procurement processes embedded in larger organisations, where it may be harder for buyers to break out of approved channels. Nevertheless it is likely that, over time, larger organisations will also pivot to marketplaces, especially as they increase their cloud commitment.

Opportunities for the print value chain

Industry players across the value chain can all benefit from exposure on cloud marketplaces. Today, some ISVs are participating in such marketplaces – examples include PrinterLogic, which is a certified AWS Digital Workplace Competency Partner, and cloud printing solutions from PaperCut, Printix, UniPrint Infinity are listed on the Azure Marketplace.  However, there are broader opportunities for MPS providers and channel partners to build professional or custom offerings.

•  ISVs: For ISVs, marketplaces can extend their reach into a wider market that would not typically be possible through traditional sales channels. As part of the relationship with any cloud giant, a customer will have a committed cloud budget they need to spend on marketplace solutions, making it easier for ISVs to reach more buyers and even develop new custom or packaged solutions.
• Print manufacturers: Traditional OEMs should evaluate the cloud marketplace model as a way to build visibility for their cloud print services offerings. Although marketplaces may seem to be more suited to software vendors, traditional IT hardware vendors are already participating in cloud marketplaces. Cisco, for instance, is offering its products and services on several cloud marketplaces including the AWS marketplace. Print manufacturers should take note and consider how they can participate in the cloud marketplace or even develop their own cloud marketplace that builds on their existing partner ecosystem.
• MPS providers and channel partners: Channel partners such as MPS providers should consider cloud marketplaces as a way to offer a range of services – whether it is entry level services or assessments (think cloud maturity assessments, print security, or document assessments) or integration services for larger enterprise MPS engagements.

Building relevance

As the office print industry looks to recover and remain relevant in the cloud-centric, post-pandemic world, manufacturers, ISVs and channel partners should look at how they can participate in the cloud marketplace ecosystem.

As a first step, OEMs must strategically collaborate and partner with hyperscale provider marketplaces such as Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform (GCP). Beyond that there are opportunities to build print specific marketplaces.

Ultimately, cloud marketplaces can provide an opportunity for vendors across the value chain and means that MPS providers, ISVs and channel partners should collaborate to take advantage and expand reach and discover new revenue opportunities.

Quocirca’s The Rise of Cloud Marketplaces Report is an in-depth study of the emerging cloud marketplace opportunity. It discusses the pros and cons of marketplaces from both a customer and supplier perspective and the potential impact on the traditional print channel. It draws on a research study of 202 organisations in the UK and US, conducted in June 2021. See the infographic for a summary of findings