From a billing mechanism to a sales channel: Nadav Tzuker on the evolution of cloud marketplaces

Within a mere four years of its existence, Wiz grew into a >$350 million ARR business, saw its valuation increase to a staggering $10 billion, and was acquired by Google for $32 billion. 

In much less time than that, the company had already been named “AWS Marketplace Partner of the Year – EMEA, 2023” and “Microsoft Commercial Marketplace Partner of the Year, 2024,” making them a true cloud marketplace wiz (see what we did there?). 

In our conversation with Nadav Tzuker, their alliance and partnerships expert, it became clear that cloud marketplaces are fundamental to their revenue and partnerships strategy.

"Cloud marketplaces are inevitable. Companies have to adopt a go-to-market strategy with cloud marketplaces; they need to have listings, and they have to know how to operate them because customers are asking for cloud as a procurement channel. More and more companies are signing commitment agreements with cloud providers today. And these accounts will become your future customers." "

Nadav Tzuker

Senior Product Partnerships Manager  |  Wiz

Hyperscaler marketplaces have grown into full-fledged sales channels, and Wiz’s intense focus on marketplace strategy reflects that shift. Nadav shared several key insights about this evolution. Read on to know.

TL;DR

As Nadav Tzuker shares, cloud marketplaces have rapidly evolved from simple billing tools into one of the fastest-growing revenue channels in B2B SaaS. 

They now streamline procurement for buyers and accelerate sales for ISVs by handling billing, enabling co-sell, and supporting complex deal structures. 

As adoption surges, companies that treat marketplaces as a core GTM channel, investing in partnerships, private offers, and operational readiness, will outperform those that treat them as just another listing.

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How did cloud marketplaces grow into a leading billing mechanism?

Here’s a question you might be asking. Why should a business move resources from traditional sales channels into cloud marketplaces?

To this, Nadav’s answer is, “Why not?”

In his opinion, cloud marketplaces present no downsides. Even in their most rudimentary form, they are a complete billing mechanism.

"It's starting to become the second-largest billing mechanism, trending to become the largest billing mechanism in the short term, in today’s SaaS B2B world."

Here’s a breakdown of the different phases of growth of cloud marketplaces:

What began as a way for cloud service providers to let customers buy their services in one place has evolved into a sophisticated platform. 

Third-party software providers now reach broader markets and use established cloud infrastructures. They also boost sales by letting cloud providers handle the heavy lifting of billing, invoicing, and collections.

Bonus Resource: A Complete Guide To Cloud GTM

How did cloud marketplaces evolve to meet customer needs?

Modern cloud marketplaces have evolved far beyond their initial promise of quick deployments and simple hands-off billing.. 

Today, they are mature channels supporting complex buyer and seller-side requirements. To get here, they started by identifying (and solving) the core issues that plague buyers and sellers. 

For example, customers need procurement to be simple and smooth instead of tedious and cumbersome. At the same time, they also need security and insurance against lapses in compliance.

The easiest way for them to buy is:

• Utilize a wallet already earmarked as a business expense
• Procure it from a network of organizations or providers they trust

On the other hand, for a new channel to work for sellers, it needs to support all their existing sales motions, partnerships, and pricing methods. To drive adoption, marketplaces needed to support, not challenge, the way independent software vendor (ISV) sales and alliances teams worked.

Here’s a quick summary of buyer and sellers needs that cloud marketplaces solved with a focused approach, leading to growing adoption:

Ultimately, cloud marketplaces now sit in the middle of a complex commercial ecosystem involving buyers, sellers, partners, and the technology to support and enable a seamless exchange for all.

Did You Know: Cloud marketplaces reduce buyers’ effort in procurement by 75%, and help ISVs sell 50% faster.

Also Read:How cloud marketplaces are changing the way companies buy software

How to match your go-to-market strategy to an evolving cloud marketplace 

Cloud marketplace innovation is a self-fulfilling cycle. As platforms improve their features and commercial capabilities, more businesses use them to buy and sell software. This rising interest in cloud marketplaces, in turn, keeps cloud providers invested in devising more ways to make sure they support all sales and procurement edge cases.

“Today, you have way more knowledge, way more resources, and way more enablement,” says Nadav. In turn, it requires ISVs to apply a more concerted approach to how they use marketplaces.

“The core premise, which I believe should be reiterated, is that companies need to adopt a cloud go-to-market strategy as early as possible … you can’t expect multiple requests for purchase just because you have set up your cloud marketplace listing. Instead, you want to master cloud marketplaces as a revenue channel. You want to understand the business value it brings for your customers – especially the ones with cloud commits.”

So how do you adapt your marketplace strategy?

• First of all, set up private and reseller offers so your entire network of distributors helps expand your reach and leads inflow
• Once lead-generation is up and running, focus on deal conversions.

Nadav recommends that businesses start with AE-led sales and gradually invest incremental time and resources in partnering with hyperscalers. 

This partnership helps drive conversions since your end-customers inherently trust their CSPs (AWS, Azure, or GCP) and will prefer your solution if it comes recommended or endorsed by them.

The final piece of the puzzle is figuring out the right operational setup for your cloud GTM team. Here’s Nadav’s recommendation:

"You want to build an entire operation to support private offers. When a customer expresses their intent to procure your solution through the AWS marketplace, it should take two hours, not two weeks, to support their request, leverage the right relationships, and convert that deal. You also want to create win-wires for sustained relationships and open up future possibilities with the cloud provider’s marketplaces team."

This is critical because, as Nadav stresses, cloud marketplaces aren’t a linear channel. If anything, cloud channel relationships are at least a triangle. “You have the cloud partners, your resell partners, and ultimately, your customer. So, you must know how to leverage the multiple programs and facilities – like CPPOs for AWS or MPOs at Microsoft – to be able to drive deals efficiently.”

This is critical because, according to Nadav, cloud marketplaces aren’t a linear channel. If anything, cloud channel relationships are at least a triangle. “You have the cloud partners, your resell partners, and ultimately, your customer. So, you must know how to leverage the multiple programs and facilities – like CPPOs for AWS or MPOs at Microsoft – to be able to drive deals efficiently.”

Watch the complete podcast here

Where do cloud marketplaces go from here?

Nadav believes that the current state of cloud marketplaces' growth as the fastest-growing revenue channel for businesses is only the beginning.

“At a certain point, it will be inevitable. The earlier you enter marketplaces both as an ISV and as a procurer yourself, the better the processes become when the entire ecosystem matures further.”

Today, 51% of CSP customers also use their marketplace to buy or sell software. As more businesses join the cloud marketplace, the window of opportunity to be true disruptors in the channel is also diminishing.

What will separate ISV leaders from laggards is their ability to build strong channel relationships with hyperscalers and their field selling teams, resolve customer pains through co-built, co-marketed solutions, and maintain a marketplace presence that automatically supports new features and backend updates as soon as the cloud partner rolls them out.

If you need help setting up your cloud sales motion, speak with an expert at Clazar today.

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Top FAQ's

1. What makes cloud marketplaces an attractive sales channel for ISVs?

ISVs (Independent Software Vendors) benefit from:

• Faster sales cycle
• Reduced procurement friction for customers
• Outsourced billing and invoicing
• Greater visibility through hyperscaler field teams

Marketplaces allow ISVs to tap into customers’ existing committed cloud spend, making purchasing decisions easier and faster.

2. Why do enterprise buyers prefer purchasing through cloud marketplaces?

Enterprises adopt cloud marketplaces to streamline procurement, reduce administrative overhead, and leverage their pre-committed cloud budgets. Marketplaces also ensure compliance, vendor verification, and simplified billing under one provider, making them a low-risk, convenient procurement route.

3. How do cloud marketplaces reduce procurement effort?

Cloud marketplaces automate billing, contracting, compliance checks, and invoicing. This can reduce procurement time by up to 75%, especially for repeat or renewal transactions where internal approvals are already aligned with CSP guidelines.

4. What impact do cloud marketplaces have on sales cycles?

ISVs typically experience up to 50% faster sales cycles on marketplaces. This happens because customers can leverage existing budgets, procurement runs through a single verified channel, and CSPs often co-sell or endorse solutions listed on their marketplaces.

5. How can an ISV adapt its go-to-market strategy to make the most of what cloud marketplaces offer?

To make the most of cloud marketplaces, an Independent Software Vendor (ISV) must transition from a traditional go-to-market (GTM) approach to a Cloud GTM strategy. These are the main pillars of this strategy:

• Align with cloud-driver buyer personas and identify committed cloud spends
• Implement cloud-first pricing and packaging in your solutions
• Develop strong co-sell motions with cloud partners
• Integrate systems like CRMs and other operational tools to automate manual processes
• Train and enable your sales teams

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