Jake Swenson is VP of Commercial Marketplace at Microsoft, which means that he’s responsible for product management and engineering for the Microsoft commercial marketplace. His overarching aim is to dramatically simplify the way B2B technology is bought and sold, a mission that sees Swenson driving marketplace strategy, delivery, GTM, and operations.
He joined Vince Menzione on the Ultimate Guide to Partnering podcast episode 136, How can partners achieve their greatest results through marketplaces? In it, he shares his insights around the role of marketplaces in building successful partnerships and meeting the needs of modern customers.
Customers value the convenience, trust, and purchase power offered by marketplaces.
When asked why modern customers want to use marketplaces, Swenson cites three main reasons why customers choose to make B2B purchases via marketplaces.
The convenience factor equates to a simplified, modern procurement process, which Swenson describes as having a single place to be able to research, find, try, and purchase solutions. In one digital experience, Microsoft customers can browse and buy solutions from vetted providers, and pay for everything in a single bill.
The products, solutions, and services customers browse are all certified by Microsoft, so customers know that what they’re buying is of a high quality. In addition, solutions provided by Microsoft’s accredited partners are guaranteed to integrate well with the customer’s existing tech stack. Ratings, reviews, and other user-generated content also help customers make the right purchase decisions.
- Purchase power
Many customers using the Microsoft marketplace have a Microsoft Azure Consumption commitment (MAC agreement). The marketplace has many solutions, even from third parties, that allow customers to draw down against that commitment, so customers are able to spend those committed dollars on first-party or authorized third-party solutions. (That’s also a great incentive for partners to sell via the marketplace.)
Marketplaces can help you build a thriving online community.
I would add here that marketplaces can be a great tool for building community around your brand and products, for both your partners and your customers. In a recent post, Surprising marketplace benefits for your internal team, partners, and customers, I spoke about how using your marketplace to communicate and achieve a purpose allows you to tap into communities of users who likewise identify with that mission and purpose. As Swenson mentioned, customers value the level of trust marketplaces offer, which further helps to nurture a budding community. Finally, B2B marketplaces that encourage collaboration between partners and customers create fertile ground for community building. Nurturing a community of passionate, engaged users is a great way to grow your tech company.
Partners value the reach offered by marketplaces.
An obvious benefit of choosing to sell apps or services via a vendor’s marketplace is being able to instantly get in front of thousands of new customers, with the added benefit of carrying the vendor’s stamp of approval. Co-selling opportunities are also a huge incentive for partners to join a marketplace.
Marketplaces have become essential for building successful partnerships and driving ecosystem growth.
Swenson explains that it’s in Microsoft’s best interests to attract partners to their marketplace and to offer co-branding and co-selling opportunities, because what’s good for their partners, is good for their ecosystem, is good for Microsoft. Their marketplace supports their GTM strategy and enables them to scale their digital selling operations. It also supports their sales force in helping customers find more solutions and draw down on their consumption agreements.
I 100% agree with Swenson, and believe that marketplaces are the engine rooms of ecosystems. Check out my previous post for a detailed look at how you can use a marketplace to grow your own partner ecosystem. In it, I talk about focusing on providing customer-centric product integrations, creating product and service bundles designed to meet customers’ needs in a holistic fashion, and the importance of using a marketplace specifically designed to sell B2B tech and services.
What’s more, inviting your partners into a B2B-specific, commerce-enabled marketplace provides them with a super-slick sales channel geared to remove friction and accelerate sales. This furnishes them with a new revenue stream and acts as a huge incentive, thereby attracting and retaining quality partners.
Marketplaces play a key role in removing the friction from B2B transactions.
In the B2C environment, the buying process is largely frictionless. It’s quick and easy to pull out your phone and in just a few taps, order a product that will arrive that same day. That digital convenience doesn’t yet exist in the B2B world, and marketplaces will play the role of creating that kind of convenience for B2B purchases.
“There’s a vast variety of industries that need these digital technologies, and vendors and publishers are going to continue to emerge to meet those varied needs,” says Swenson. “The role of marketplaces is to matchmake to customer demand and take all of the transactional friction we possibly can out of the system.