Navigating the tectonic shifts in buying behavior with Vince Menzione

Trunal Bhanse (00:01.858)

Welcome to the Clazar podcast, everyone. It is here where we have conversations about the present and the future of SaaS GTM with some of its most recognized leaders. And today, we have a very special episode with a guest and a friend who is one of the biggest champions of partnerships community, Vince Menzione. Vince, welcome to the show.

Vince Menzione (00:21.826)

Trunal, so great to see you, my friend. And thank you so much for having me today.

Trunal Bhanse (00:26.802)

Thank you so much as well. Vince is no stranger to this audience. He doesn't need an introduction, but here it goes. Here, he's the founder and CEO of Ultimate Partner, a learning platform dedicated to enabling partners and achieve cloud GTM and ecosystem growth. Vince is the producer and the host of Ultimate Guide to Partnering Podcast which has over 200 extremely high quality conversations with experts, advisors, and practitioners as well. Vince founded UPX after a long and illustrious stint at Microsoft, where he led partner sales and strategy. We'll hear more about Vince's incredible career in his own words. So Vince, what I'm gonna do is I'm gonna jump straight into it and let's start, yeah, let's start by talking about your career.

You are definitely in an elite group of people who have witnessed the change in tech behavior over multiple GTM lenses and over multiple years. Could you tell us a little bit about your career transition, how you saw the landscape changing along the way, and specifically, what did you notice about the procurement and customer behavior that served as a disruptor to how things have been done?

Vince Menzione (01:41.87)

Thank you for that introduction. You know, I've described my career as four successful business transformations. I carried a bag way back. I understood intuitively that partnerships helped me be more successful faster and built ecosystems going back to before Microsoft and then at the Microsoft time. So I've been on both sides of the equation, both at the partner, both at the hyperscale level. We talked about transformation going back 20 years ago, right? We've been in public clouds now for at least 15 to 18 years.

But it's really been, I would say the last few years, what I refer to as the tectonic shifts. COVID really accelerated things. Satya Nadella said we saw two years of transformation in two months. I'd say we saw several years of transformation in several months. Our lives changed radically and we needed to deploy and utilize technology like we never did before. Healthcare went from a 5 % usage with remote healthcare management to almost a hundred percent.

Education changed. Our buying behaviors changed radically. We'd we'd tap our phone three times and boxes would show up that same day. That changed our lives dramatically. It also changed our buying behavior. And because of that, maybe that was that isolation and that acceleration of technology that, that accompanied what happened with COVID that we've seen these tectonic shifts. We've seen the changes in buying behavior with a millennial generation is now the new persona, 75% of which don't want to speak to another human being.

They're going to rely on their trusted advisors, that circle of seven or eight seats at the table that are helping influence those technology buying decisions as if I was going out and buying a vehicle, right? And I was going to ask all my friends about what they thought about that vehicle. Same thing is now happening in technology. We've seen this change in the hyperscalers. You know, we'll talk about Microsoft, we'll talk about the transition and how co -selling has become more effective. But the role of the hyperscalers

I mean, it's incredible what's happened, the investment levels that are happening now. We'll talk about why that's happening, but that didn't exist up until about five years ago or more. And then also this do more with less because what accompanied the COVID investments was also a pullback, which meant that organizations needed to thin out their costs and OPEX. And so we now all have to do more with less and that's requiring organizations to think differently about their own partnering strategies. You can't be lazy about it.

Everybody needs to lean in there. So we've seen all of this happening, this radical rapid transformation, these tectonic shifts have been happening. And we've been chronicling a lot of that, as you know, through the podcast, over 230 episodes now. Thank you for the compliment about the quality. We believe it's the ultimate guide to partnering. And we try to live up to that brand and try to have the best episodes, the best guests on our podcast.

Trunal Bhanse (04:33.33)

The ultimate guide for sure. I've had the privilege to be on your podcast as well and appreciate the opportunity to speak to your audience. It's a fantastic group of people for sure. So now you talked about the tectonic shifts, right? And I couldn't agree more, Vince. I've been in the industry for years now and I've seen this literally with my own very eyes, albeit from a different engineering and a product lens. But especially now in the time of economic fragility in SaaS.

The influence of value and price on a purchase decision is very strong, but the new demographic of software buyers are equally influenced by factors like, know, integrability, quick ability to deploy, and a few other things, right? Like, you know, as our friend, you know, Jay McBain speaks about, where he talks about all of these things that are being important. Now that's a lot of areas for a seller to deliver on. How do you think cloud marketplaces are helping level the playing field for ISV sellers?

Vince Menzione (05:34.072)

Well, certainly it's access, right? It's access to markets that they know they didn't have access to before. It's allowing organizations that didn't have the scale and size of the large independent software vendors, the large SaaS companies or ISVs with the large selling organizations to, because maybe they are a unicorn or they have some unique capabilities or they have access in ways that the large players have as well. So it is changing the game from that perspective.

And if you understand how to be successful and apply those principles, you have a chance to rise above and be in a league where the big ones are, maybe even beyond that. And what I see too is some of the smaller digital native organizations are much more agile and willing to lean in in ways that some of the larger SaaS or ISV organizations maybe are not. They're much more conservative in their approach.

Or maybe they're bureaucratic in the way that they operate. And I've seen this operate over these last couple of years, in fact, in a big way.

Trunal Bhanse (06:38.92)

Yeah, for sure. And that brings me to the next slightly related topic. I was reading an article online yesterday by SaaStr that stated that the median year over year growth for public SaaS companies has fallen below 20 % mark for the first time in a number of years. Now leaders in the traditional B2B SaaS categories like Salesforce are projecting single digit growth numbers. At the same time, the cloud and AI categories are bucking this trend and with businesses like Databricks projecting growth rates of like 50%. Now, how do you think the marketplaces are helping SaaS businesses ride this AI cloud slash data wave?

Vince  Menzione (07:19.758)

Well, a few things here to unpack, right? There's a lot of to unpack in terms of what are the symptoms, well, we know what the symptoms are, but what are the causes of those symptoms? A few things I would say. One is that these ISVs, first of all, if you're not on the cloud, need to be, marketplaces you need to be, because it gives you this access, right? There are $360, $370 billion in durable cloud budgets amongst the three hyperscalers. And access to those sellers, which is the promise, is critical, but also access to those commitments, those large commitments, because these commitments are now being made at the C -suite level. They're being made at the board level of these organizations. And so even having the permission to access that market, you need to be on those marketplaces. You need to have and effectively drive into that in a big way. We're also seeing too, I think there's a lot of noise out there. I think that we've had an overindex on SaaS over few years. And what you're starting to see too is I believe you're going to see a consolidation. I believe that some of the larger organizations, you almost saw this with a recent acquisition that Google was going to make of an ISV, where because of a lot of factors, one of which is customers can only consume so much SaaS, right? And how many point solutions can you have? And then how many vulnerabilities around those point solutions? We start thinking and layering in the security threats that we're seeing at the at the global level, right? From these global actors and bad actors out in the world, that organizations are gonna wanna limit that. And I believe over a period of time, you're gonna see a consolidation. You're gonna see maybe, I would say maybe 10 to 12 big players in the world, and you're see consolidations of organizations. So is it a good time maybe to have your organization acquired? Maybe.

But we're seeing even in our space, right? We've seen some consolidation of tech companies in our tech stack layer, our partner tech stack layer. And I think you're going to see this across the SaaS world. Because again, you can just have so many players in a particular market, customer confusion, just the mind share that they have in terms of addressing it. there's just, in fact, if you're at the hyperscale level, just so many partners that you can have and that you could recommend to customers. You're going to be ineffective at a certain point. So think there's a saturation element here as well.

Trunal Bhanse (09:46.256)

Absolutely. And this is such a good point because as our friend, Jay McBean calls it, he coined this term, the decade of the ecosystem. I want to bring you to that topic a little bit because I think there's some synergies between how much saturation there is in the market and how much fatigue exists for a buyer to go out there and figure out which tool I should buy, why, and stuff like that. There's no longer that the single point of influence on a purchase decision.

Because with the advent of so much SaaS, there's also the advent of various teams that have a say in that purchase decision. And now there are multiple decision influencers for a buyer's purchase decision. But how does that ecosystem, the term that Jcoin, actually operate in practice? And how do you find a seat at that table?

Vince Menzione (10:38.542)

That's a really great question. And the decade of the ecosystem is the term he's coined. And we're at the halfway point now, right? So we've been talking about this decade, which started in 2020 during COVID. And we'll continue maybe on beyond the decade. I think that we're in a time of ecosystem. Microsoft got this early, by the way. It recognized back when Bill Gates actually started the company that it needed all these other companies because all it was doing was licensing software.

And that needed to be run on different various forms of hardware. And then they needed to cobble in all these other elements to make a complete solution for a customer. The same, that same reality exists today in this ecosystem world. It's really at the customer level that we need to start thinking. We've been operating partnerships. There's an old term that I hate that people talk about it, vendor and channel. And that was sort of the model before, right? So, I was just on with the leaders at Cisco just today, actually had a conversation with, with Rodney Clark, who's their Chief Partner Officer and their model. They're evolving their model as well. Because they recognize that it's not just, not pushing product through a channel and trying to sell a customer anymore. The customer again, here, here they are. They have their eight seats at the table and they're relying. Let's, let's talk about security and backup and recovery as a, as a simple example. There's several components to that.

And they're going to look to the trusted organizations that are going to help them solve for that business need, that set of outcomes that they're trying to drive. They're going to pull those organizations in. It's not going to be a push anymore, right? You're not picking up the phone and you're not taking the call from the BDR or the SDR. It's now, I want to understand, I know what I need to do. I've talked to others that are doing this. I want to do the same thing. And they'll be pulling in maybe a backup and recovery and a security and an observability, a cloud, and so on. And they'll be pulling it all together for the customer. And that's what we're going to see. If we're not seeing it already, I think that's the move. And being agile, and this is where I think you're going to have a win -win out of SaaS companies, because there only could be so many solutions and so many players and seats at the table. I think the strongest will survive, the Darwinism that we expect to see. You came from some companies that clearly were market leaders.

And I think that's what we're going to see in the SaaS world. Others will, I think there'll be that shaking out over time, but no despair out there. think there's still lot of opportunity for organizations to be market leaders or even second in market. But I do think that we're going to see that. And that behavior is more of that pull. It's more driven from the customer. And it's tying into the cloud commitments that they've already made.

Trunal Bhanse (13:52.4)

Let's zoom in a little bit from the macro environment to what happens actually within an org and this is in context with the changing buyer behavior and the topic that we just discussed. With buyer preferences changing as quickly as they are, a lack of vision can really put a strain on the channel relationships. I've seen this being in practice many times where people want to start their channel motion, but it's not really aligned at the entire leadership level or you know there isn't really a vision and a strategy behind it. From your many conversations with practitioners what are ISVs doing or should do to reaffirm their commitment to their partnership as the GTM strategy evolves especially around building trust between partnerships and the direct sales functions.

Vince Menzione (14:49.496)

For now, you're speaking my language now. I espouse a set of operating principles around what makes successful partnering. And I talk about it from what I call the internal victory to the partnership victory. And there are a set of seven operating principles that we espouse. I'm not saying we're covering everything, but I think we're covering the main topics. When we talk about internal victory, you need to get your C -suite aligned. You need to have the right mindset.

Satya Nadella talks about empathy, he talks about growth mindset. Applying that type of mindset, it can be very meaningful from a financial perspective to an organization. Take Microsoft, they went from $30 a share when Satya took over to over $400 a share now. He applied growth mindset to get that organization to think differently and act differently. He took down the barriers in that organization. And I suggest that other organizations and leaders need to do that across their team.

If you're truly going to invest and be successful at partnering and ecosystems, everyone on the team needs to be on board from the CFO to the CEO and CFO to the Chief Marketing Officer, Chief Revenue Officer, product officer, support, and so on. So I think that that's got to get, you have to get that right in order to do that too. You need to have a big, bold mission for success. You need to have that vision and what are the value, what's the value that we provide to the market? You need to get very crisp and clear on that before you lock arms with other organizations and partnership. And then you need to have the executive commitment. Like the commitment's important. Not only does the C suite need it, you don't need to just agree. You have to invest. You have to put the resources and channel incentive investment. You need to think about your organization differently. Investment takes on very, very many aspects of the business. Then you're ready to lock arms. Mutual trust has to be there. If again, this is part of the mindset piece. You have to trust the process, you have to trust the other side. And that's intuitively not the way most sellers and go to market works in most organizations, right? We only trust what we do. We don't trust what the others do. So that's not always intuitive for some organizations to come into the partner strategy. And others just want a quick tactical play and they just want a quick fix. And this is a long game. You have to think about this as a long game. It's an infinite game that you have to think about with your partnership strategy. When you get to the other side, you have to be very deliberate. I find that organizations are not always deliberate. They'll say they want to do it. They even put the investments in front of it, but they don't deliver against that intentionally. And some of the things we believe in are doing, maniacal focus. You have to focus on the execution. I love OKRs because I think you need to get very crisp on your objectives, results, and milestones.

And the responsibilities across both organizations to drive it. And then we talked about that C -suite and getting your executive team, your marketing team, your sales team, you have to align your executive team with the other side. So if you're working with a hyperscaler like Microsoft, who are my executive sponsors at each level of the business? And I need to make sure I'm aligned across. It's not single threaded, it's multi -threaded across the organization. So you really have to build that model for execution. And then you execute and that's your flywheel.

You get your brand out there, you build your story, and then you start delivering results. And that's where we get into marketplaces and co -selling and building that, like, you you put the, put the stake in the ground and then you start building out various markets and success. And that, that's how we get there. Now, after you got there and your top partner, guess what happens? Things change, right? The markets change AI gets introduced. The partner changes their tactics and their strategies. You have to be agile.

You have to apply agility to this whole business model and be ready to pivot at any point in time, but still deliver against the set of results and the objectives and the vision that you had for the business.

Trunal Bhanse (18:49.016)

Absolutely. And then I'm going to bring you to the co -sell topic that you just mentioned. know, one is getting the alignment and talking about having a vision, but the vision actually eventually all boils down to what is the business goals, right? And one of the key things for business goals is co -selling. And I'm really excited about this question, Vince, because you you were at Microsoft for a long time and you were there when the whole co -sell motion was being conceptualized.

At the beginning, most ISVs would, I'm guessing, would have been resistant to the concept of having a hyperscaler, be that quote unquote middleman, or over having a direct customer relationship. Do you think that has changed over the years? And if so, for both sellers and the channel, how has that relationship evolved?

Vince Menzione (19:38.478)

So when I was at Microsoft and we first decided to do this, we did it because the other guys, the other 800 pound gorilla in the room, AWS, they didn't have the field organization that we had. And we knew that that was an asset. At that point in time, AWS hadn't built out their field organization. So we said, you know what, if we bring partners, ISVs primarily, Independence Software Vendors or SaaS Solutions, if we actually brought them in on opportunities, that's something we can do differentiated. And so we started this process. It was all spreadsheets at the time. There wasn't any automation behind any of the technology. There certainly wasn't marketplaces yet. But what we'll get on the other side of that from the ISVs, particularly ISVs that had good market share, was the question back on the other side. I got to see this from the other side when I left Microsoft, is why would I invest? Why Microsoft doesn't sell anything? They can't carry my bag. They can't describe or sell my value proposition to the customer. Why would I partner with Microsoft? There wasn't some of the compelling things that we see today. Now, what's happened over time is Microsoft also recognized it with Azure and AWS with the AWS cloud and now Google with Google cloud is that the sale needed to happen at a very high level in the organization. And in order to give the customers the best prices, they needed customers to commit to larger and larger commitments and multi -year commitments, right? It wasn't just about consuming a little bit. was about if you get from a million to 5 million or from 5 million to 10 million, 10 million to a hundred million, you're going to see this ramp up in as you consume more, because you are, you're going to move more your technology. You're going to move your data centers and your on -prem solutions. You're going to move all those to the cloud. You need to consume more. And as you get further up in the consumption, you'll get a better price from us.

So this is what the sellers, the 50 ,000 in Microsoft, the 50 ,000 at AWS and the 20 ,000 at Google. This is what they've been doing going out to these organ, which is why we have these large cloud commitments now. Right. And then AWS, the brilliant retailer that they are start applying retail practices to the cloud and come up with the idea of marketplaces. I mean, they've three year headstart in the market because they understood it.

They understood customer. I mean, Jeff Bezos principles and the way he thought about the business. And then everybody else has been playing catch up. Let's just call it what it is, right? Microsoft's played catch up. Google's played catch up. But this is what happened is we now have these large commitments and customers also going there going, Hmm, did we overcommit? Did we, are we really going to get to, are we going to get all of everything, all of our data stayed and all our application suites and everything up to the cloud as quickly as we had hoped? Well, we made a commitment to do that.

What else can we do with that? Well, we can buy SaaS software off, but we can buy services, right? So now we were seeing these large commitments almost acting as, and these cloud hyperscalers almost acting as if they're distributors of technology. And we're starting to see more of this. And this has now evolved to the point where it's brilliant, right? Last year, five ISVs got to the billion dollar mark through marketplaces.

And we'll start to, I think this year we're to see a lot more of those. We're starting to see larger and larger technology companies, organizations as big as Salesforce, as big as ServiceNow, as big as Cisco, putting integrating marketplace as part of what they're doing and how they're driving their business differently. And so we're seeing this prevalence that we're seeing around. And again, we haven't even talked about AI yet.

But this prevalence around marketplaces are effective. Co -selling is effective. And the hyperscaler because of Microsoft's going to spend $50 billion this year, just in chips and data centers, and probably similar investments across the other two. Nobody else can catch up at this point. This is like an arms race. mean, nobody else is going to. So everybody understands that their role is supportive of this large hyperscaler movement that we're seeing.

Trunal Bhanse (24:00.056)

Absolutely. And Vince, like, you you talked about how co-sell originated and how it's actually going to go in the future. One thing that I always wonder is how, like with the evolution of co-sell how is that actually affecting the GTM rules? Like, are they changing? Are they not? Do you think there is enough representation for partnerships at the exec level? Do you think there needs to be more evangelization, more education? Like, I mean, this effort right now, the podcast itself is an effort in service of that goal of evangelization, right? Do you think more of that needs to happen? Is there something you're seeing happen now? Like what's happening in your world from your vantage point?

Vince Menzione (24:43.458)

Well, I'm going to be selfish here in my answer to you. I don't think there is enough happening. and which is why we have taken Ultimate Partner to the place that we're taking it to because we don't see the hyperscalers. The hyperscalers are more now to partner. They're not doing enough to help enrich and activate the ecosystem. And that's where we come in. We're, hosting our own event because we want to get the ecosystem together. We want to get the conversations in the room to activate this, this rich ecosystem and go to market is not a one -to -one motion any longer. We talked about the decade of the ecosystem where before it was an ISV with their direct salespeople and a hyperscaler working together. That's not going to be effective in the long run. In the long run, it's going to be the 30 or 50 ,000 channel part. We used to call them channel partners. They're no longer channel partners. They're now the ecosystem and, and activating that ecosystem in support of the SaaS solutions and the SIs and bringing that holistic solution into the customer. And that's what you're seeing change. And this is why we see it's so important to play a leading role in supporting those organizations through our community, because we don't see it anyplace else. We don't see anybody else that's focusing in on the three hyperscalers to the extent that we are in order to drive that, because we do believe that this ecosystem needs enrichment. And the go -to -market and everything will grow from there. But it's all about getting that ecosystem activated.

Trunal Bhanse (26:52.2)

Alright Vince, as we are coming towards the penultimate question, it's actually a set of five questions. It's what we call quick five. And we haven't really done this on the podcast, but you gave me this idea when I came on your podcast and you asked me three questions. So I'm gonna return that favor by asking you five, okay? I'm gonna give you five questions and the only constraint that you have is you have to think on your feet and quickly give us an answer. Are you ready? Alright, let's do it.

Vince Menzione (27:17.294)

I'm ready.

Trunal Bhanse (27:19.816)

What is one skill you think partnership leaders should possess or build in the context of hyperscalar partnerships?

Vince Menzione (27:27.244)

Wow. One skill. I think that there's not, I have a lot of them I could give, right? Cause I could say we could go into empathy, which I think they need to have in their organization, but I'm going to lean on brand and marketing because I don't think that organizations, particularly tech organizations do as an effective job as they can on their brand story. And, we actually focus in on brand and story.

And that is not only like marketing and literature and all the things that we do when LinkedIn and various digital platforms, it's how you can tell your story up and down an organization, particularly for hyperscaler partners. It's being known for that one thing I like to call the shiny quarter in the bucket full of shiny quarters and being able to tell that story with every executive you meet at the hyperscaler and every salesperson and every partner person in that organization being very crisp on that and standing out. You have to get that right.

Trunal Bhanse (28:28.904)

Alright, brand and marketing. I love it. Next question. What is something partnership leaders should be directing their attention to but aren't?

Vince Menzione (28:39.81)

I think we talked a little bit about this earlier. I think that getting their own organization, right. We are focused too much on tactics. I got on a call recently with an organization that wanted some help and it was very clear that the leader in the room, the, especially the chief leader that was on the call, didn't get partnership, didn't understand partnership and just wanted a quick fix. They wanted to get their marketplace offer in market because that's going to solve everything for. And being very tactical on your execution is not going to deliver the results. And I see this in big organizations, by the way that I work with, that the team, might do the marketplace offer. They might get the co -selling piece right. They've got their systems aligned. They think they're had their teams aligned, but at the executive levels, they're not operating effectively and they need to get that piece right.

Trunal Bhanse (29:33.978)

Absolutely. All right. On the quick five, number three, what is the most surprising information, trend or practice you have heard from a podcast guest recently?

Vince Menzione (29:45.688)

Boy, this is very interesting. I touched on this a little bit earlier. It's seeing organizations that I didn't believe or think would move to Marketplace Strategy. And I mentioned the name of an organization without divulging any of their information here. But some of these organizations would not be the typical organizations. We talk about SaaS software companies, organizations outside of what you would consider a SaaS software company that had decided that they are going to embrace marketplace and hyperscaler motions, co -selling motion in a much bigger way and getting co -selling right and moving from the traditional channel model. And that to me is very surprising.

Trunal Bhanse (30:30.584)

Very interesting. All right. Who's a guest you would love to have on your podcast next?

Vince Menzione (30:37.602)

This is easy. I've said this probably multiple times. I would love to have Satya Nadella on the podcast. I mean, he's my ideal guest given the persona of the podcast. I got to be in the room with Satya, but this was way before I started the podcast. And that will be when we get him on the podcast, which we will at some point, would be the ultimate guest.

Trunal Bhanse (30:44.625)

Awesome. All right, the last one. What's the first resource you would recommend to a partnership leader in the exploratory phase of Cloud GTM today?

Vince Menzione (31:09.836)

Well, I'm going to be selfish here for now. Come join Ultimate Partner Experience. Come join our new community. It is a new community. We're not as big as other communities, but we are creating the community that I didn't see when I left Microsoft. I wanted to see, I thought I was going to see all the great leaders, the executives that I was talking to when I was at Microsoft. I thought they were all going to be together as a group and they had their own place or their own watering hole where they went. And I didn't see it. I still don't see it.

And so that's the community we're creating. We're executives and leaders in this space and, and, and, and, largely their teams of leaders that all come together and are very hyperscaler focused. We want to be, we want to be seen as the partner advisory council that's independent of the three hyperscalers. That's how we see ourselves.

Trunal Bhanse (31:59.922)

That's awesome. And I couldn't recommend that more or enough. Like I'm a part of the community. It's been fantastic. And what's also been fantastic is Vince having you on the podcast. Thank you so much for spending the time with us and sharing your wisdom with the audience. I'm sure there's so many nuggets that we can learn from, but super appreciate you spending the time.

‍Vince Menzione (32:10.761)

Thank you. Well, and I do want to make that one plug that we talked about a little bit earlier. So October 22nd and 23rd, you're going to be in Dallas with us. We are hosting the Ultimate Partner Live executive summit. Dallas, Texas. We have an incredible facility. This is a state of the art. Millions of dollars went into this facility. So we're not in a small hotel conference room and old shag carpet and drapes and that kind of thing.

This facility has got a 36 foot high digital wall. It's a television studio. So not only are we going to be in the room with all these amazing technology leaders like yourself, but we're also going to live stream the entire event. It's going to be the happening of the ecosystem this year. And we're really excited about it.

Trunal Bhanse (33:06.504)

That's awesome. I'm really excited about it as well and I'll see you in Dallas.

Vince Menzione (33:10.508)

Looking forward to it, my friend. Thank you so much for having me.

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