Home Just In Cloud marketplaces sales to hit US$45 billion by 2025

Cloud marketplaces sales to hit US$45 billion by 2025

by CIO AXIS

Canalys estimates that cloud marketplaces will grow to over US$45 billion by 2025, representing an 84% CAGR.

Cloud marketplaces are accelerating as a route to market for technology, led by hyperscale cloud vendors such as Alibaba, Amazon Web Services, Microsoft, Google and Salesforce, which are pouring billions of development dollars into the sector.

“The marketplace route to market is on fire and cannot be ignored by any channel leader,” said Canalys Chief Analyst, Jay McBain.

“Marketplaces grew more in the first three months of the pandemic than in the previous decade and have just kept growing,” he added.

Some software vendors that are active on marketplaces, in particular cybersecurity vendors, are publicly reporting as much as 600% year-on-year growth via this channel, according to McBain.

In addition, the hyperscalers are now reporting growing numbers of billion-dollar customer commitments through enterprise cloud consumption credits, which cover more than just software.

The large cloud marketplaces have lowered fees from upwards of 20% down to 3%, enabling vendors to fund multi-partner offers inside the transaction.

Private equity is funding billions more into marketplace development firms such as AppDirect, Mirakl, Vendasta and CloudBlue to enable hundreds of niche marketplaces across different buyers, industries, geographies, customer segments, product areas and business models.

“By 2025, Canalys conservatively forecasts that almost a third of marketplace procurement will be done via channel partners on behalf of their end customers,” said Canalys Chief Analyst, Alastair Edwards.

“The rise of this route to market represents a threat to both resellers and two-tier distribution. But as more complex technologies are consumed via marketplaces, end customers are also turning to trusted partners to help them discover, procure and manage marketplace purchases. The hyperscalers are increasingly recognizing the value of channel partners, allowing them to create customized vendor offers for end-customers, and supporting the flow of channel margins through their marketplaces. Hyperscalers’ cloud marketplaces are becoming a growing force in global IT distribution as a result.”

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