Enterprise IT vendors tend to have vast partner ecosystems and aggressive strategies to monetize those relationships. One example is the “marketplace” – a single point of entry where customers can easily purchase from multiple solution providers.
The marketplaces hosted by Google Cloud and AWS continue to grow and have an influential effect across the broader cloud provider landscape. UBS estimates the AWS marketplace could be delivering $1 billion to $2 billion in revenue to Amazon. Meanwhile, as of mid-2021, the Google Cloud marketplace offered ~4,600 products and services and continues to grow at a healthy clip.
Different Approaches to Credit for Enterprise Buyers in the Google Cloud vs. AWS Marketplace
One advantage of marketplace purchasing for large enterprises is that Google and AWS allow dollars spent within the marketplace to count towards a customer’s annual spend commitment volumes. In the Google Cloud marketplace, dollars spent within the marketplace are applied on a 1:1 basis against spend commit. AWS, on the other hand, only offers a 50 percent credit for spend within their marketplace.
From a discounting perspective, NPI has observed Google to be somewhat flexible in the discounts it offers for term versus annual spend commitments. This is good news for customers whose spend may ebb and flow over the duration of their contract term, but still meets term commitment thresholds. AWS behaves a little differently. While offering less credit towards your spend commitment, AWS tends to base discounting on annual committed spend rather than term. A large committed spend volume that remains flat in a year-over-year situation would typically earn the same levels of discounting.
Marketplace Purchasing Advice – Understand AWS and Google’s Motivations Before You Proceed
The marketplaces continue to add more and more “traditional” vendors under their tents, with pricing that rivals the legacy channel. Both the vendors selling their wares in the marketplace and the cloud marketplace hosts like AWS and Google have been aggressively pushing customers to purchase via this new method.
But there are some drawbacks that customers need to be aware of as marketplace hosts leverage their marketplaces differently and in alignment with their unique motivations. Comparing the Google Cloud vs. AWS marketplace isn’t an apples-to-apples comparison. A thorough understanding of the motivations and costs for all players is advised. Another consideration is if and/or how licensing and terms of service change when purchasing through a marketplace versus directly from the vendor.
A solid deal (including pricing) today may ultimately cause future headaches if not carefully planned.
Interested in learning more about the pros and cons of cloud marketplace purchasing, and how to get the best deal? NPI can help.
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