AWS Marketplace Sets New Fee Structure; ‘A Big Deal’ For Partners, Says Ruba Borno

‘We’re announcing a flat fee structure of 3 percent [for AWS Marketplace]. In some cases, if the customer or the partner has a large private pricing agreement with AWS, it’s even lower,’ Ruba Borno, AWS global channel chief, tells CRN.

Amazon Web Services is continuing to refine its AWS Marketplace, unveiling at AWS re:Invent 2023 today that the cloud giant is lowering the fee structure to three percent for partners selling solutions on the online marketplace.

“We’re lowering the fee structure for AWS Marketplace—it’s a big deal,” Ruba Borno, AWS global channel chief, told CRN. “We’re announcing a flat fee structure of 3 percent. In some cases, if the partner makes a large private offer, it’s even lower.”

The AWS Marketplace listing fee change goes into effect Jan. 5, 2024.

“We’re transforming the pricing structure to help more partners get value out of the AWS Marketplace,” said Borno, vice president and head of worldwide channels and alliances for AWS. “We want to reach more customers through the AWS Marketplace. We want to make it easier for them to find industry solutions and use cases that meet their specific needs with our partners. I want partners to make sure that they are working with AWS in a co-sell fashion, especially through the AWS Marketplace, because we’re continuing to invest in that to help them grow and reach more customers.”

The AWS Marketplace currently has over 15,000 transactable listings from more than 3,500 ISVs, 300 data providers and 1,300 AWS channel partners. There are now more than 330,000 active AWS Marketplace subscribers across 30 regions.

‘Dawn Of A New Day’

Justin Copie, CEO of Innovative Solutions, said with AWS’ new fee structure, as well as new features and updates constantly being added this year, Marketplace will drive revenue and customer growth for channel partners.

“In the past, we haven’t had that opportunity to transact as easily and as cost effectively as we wanted to in the Marketplace,” said Copie, head of the Rochester, N.Y.-based AWS Premier partner. “Over the last six months, we have watched update after update come through. … I’m not exaggerating. The dawn of a new day is finally here.”

Copie said the AWS Marketplace will now enable his company to “take my entire portfolio of service offerings” of managed services and private offers to the Marketplace which will provide “a highly efficient and scalable way” to get Innovative products to more customers faster.

“The second thing that the Marketplace is going to do for us immediately is give me an opportunity to sell things at a higher volume to customers without ever transacting with a sales rep,” said Copie. “Customers want that for certain things. There are very transactional things that customers should be able to buy easily, like managed services or our assessments. We know how do to an assessment and the customer knows what they’re going to get in the end. Marketplace is perfect place to buy things like that.”

Copie said sales reps will always be needed to help usher customers through sales cycles, sell custom solutions and to provide more complex offerings.

“My sales team are out there in front of customers and explaining the benefits of an offering. They’re helping customers navigate that decision-making lifecycle,” Copie said. “The reality is, more than half of the things that we sell to customers today, I don’t need a sales rep for. I don’t need a sales team to sell it.”

AWS Marketplace ROI And Benefits

A 2023 Forrester study on the AWS Marketplace found that partners leveraging the online marketplace are seeing a more than 200 percent return on investment (ROI), deal closing at a 50 percent faster rate, and an increase of deal sizes by 4x to 5x.

Additionally, partners reported to Forrester that AWS Marketplace professional services gross margins ranged from 25 percent to 45 percent.

“The AWS Marketplace is helping our system integrator partners find new customers and helping them solve their massive challenges,” said AWS’ Borno. “We’re seeing the number of system integrators putting their solutions on the AWS Marketplace increase, including vertical specific solutions. We’re continuing to see a flywheel effect: more customers and more partners that are on the AWS Marketplace.”

Borno said the AWS Marketplace team has doubled the number of launches in 2023 compared to 2022. The cloud giant has added new features, integrations and APIs into the Marketplace this year with no plans of slowing down in 2024.

“We’re going to continue to invest in this self-service capability to help customers find the right partner on their own,” said Borno. “Next year, we’re going to continue to see improvements.”