Ultimate Guide to Partnering®

Join Lori Borg, Vice President of Microsoft America’s Go-to-Market, as she shares her evolution from a Microsoft partner to a pivotal executive. She emphasizes the necessity of technical intensity and agility in navigating today’s tech landscape. Lori dives into the vital role of AI in partnerships, stressing how it can drive growth and innovation. With insights on fostering a culture of adaptability and collaboration, she highlights the importance of strategic alignment among partners to succeed within the Microsoft ecosystem.

Recorded Live at Ultimate Partner LIVE in Redmond, WA Unlock the secrets to explosive growth in the digital landscape!  Subscribe to our Newsletter: https://theultimatepartner.com/ebook-subscribe/ Check Out UPX: https://theultimatepartner.com/experience/ Is your business ready for 2026? Welcome back to the Ultimate Guide to Partnering® Podcast. Join industry leaders John Janke of Tackle.io and Shane Wilson of Cohesity as they delve into the transformative power of cloud marketplaces. This engaging discussion explores the evolution of marketplace adoption, from its early pioneering days to its current status as a multi-billion dollar opportunity. Discover how buyer behavior is shifting, the increasing importance of channel partners, and the strategies that winning ISVs are employing to achieve unprecedented scale in the cloud go-to-market. We’re curating the very best of these moments—fireside chats, expert panels, and executive insights—so you can stay ahead of the curve and fully aligned to where Microsoft and the industry are heading. And this is just the beginning.More sessions. More voices. More of what you need to know. If you’re not yet part of the UPX Community, now’s the time to join us. Access exclusive content, events, and strategies that keep you in front of what’s next. Thanks for being on this journey with us.— Vince https://youtu.be/kydm0sEq6ac?si=XbuyStK3opiB-i6e KEY TAKEAWAYS: The cloud marketplace has evolved from a niche concept to a multi-billion dollar ecosystem, with projections to reach $100 billion by 2026. Buyer behavior is shifting, with a significant increase in buyers utilizing cloud marketplaces for procurement across all software and partner types. The role of channel partners is becoming increasingly critical, with marketplace strategies shifting from ISVs to channel partners who own the buyer relationship. Successful ISVs are integrating marketplace and co-sell motions into a unified company-wide cloud go-to-market strategy, encompassing sales, product, rev ops, and marketing. The concept of “storefront evolution” is emerging, where buyers discover products in new places beyond traditional marketplaces, leading to more specific solutions and bundles. Consistency in strategy, execution, and celebrating wins is paramount for navigating the evolving cloud marketplace landscape and achieving long-term success. If you’re ready to lead through change, elevate your business, and achieve extraordinary outcomes through the power of partnership—this is your community. At Ultimate Partner® we want leaders like you to join us in the Ultimate Partner Experience – where transformation begins. https://youtu.be/s33fltuizEo Key Tags: Cloud go-to-market, cloud marketplace, ISV, channel partners, co-selling, procurement, software sales, digital transformation, B2B software, multi-party offers, ecosystem, strategic partnerships, revenue growth, sales motion, alliances, rev ops, marketplace operations, product-led growth, SMB, enterprise, storefronts, cyber resiliency, Microsoft partnership, NetApp, Amazon, CrowdStrike, Salesforce, Workday, ServiceNow, Wiz, PAX8, Ingram Micro. Transcript: [00:00:00] John Janke: Another big, and this I think trend will be next year. It’s happening right now, but it’s still really early, is this idea of evolution of storefront. So if you want to change buyer behavior, you have to meet buyers where they show up. [00:00:14] Intro: We believe this time is like no other. We believe we refer to these as the tectonic shifts, all the hyperscalers in the world, if you add them all together, managed services will be one and a half times larger [00:00:26] Vince Menzione: because it is the customer buying behavior that has created the need for all of us to rethink our models [00:00:33] Intro: until we have data quality, the effectiveness of AI cannot be realized, and effectiveness of the partnerships cannot be realized. Can you figure out first, what your purpose is and how Microsoft can support your purpose and how you can support Microsoft purpose? Now we have a partnership. It’s the ultimate partnership. [00:00:52] Vince Menzione: Welcome to The Ultimate Guide to Partnering. I’m Vince Menzi, own your host, and my mission is to help leaders like you. Achieve your greatest results through successful partnering. We just came off Ultimate Partner Live at Microsoft’s Redmond campus, our most powerful event. Yet, over two days, we gathered top leaders to tackle the real shifts shaping our industry. If you weren’t in the room, this episode on marketplaces featuring John Yanke, the CEO of Tackle. And Shane Wilson from Cohesity brings us right to the edge of what’s next. Let’s dive in and we’re gonna have some other leaders in the room to talk about marketplace. Uh, in fact, we’re very pri privileged to have both. I. As sponsors, but also really partners in driving the success working with the Marketplace organization. Some of the top organizations that understand Marketplace better than anyone, they’ve been at it the longest. I’m privileged to have John Yanke, the who’s been a great friend, a great supporter of Ultimate Partner, the CEO of Tackle io, and Shane Wilson from Cohesity, who’s also been around this partner partnering, co-selling. Marketplace world that we, we know and love so much. So great to see you again my friend. Good to you. Great to see you, Shane. James, how you doing? Thank you. Good to have you both on stage today. So is the world to have you make the trip and to support us. Good to be here. So great to have Cy on stage too, right? So I know you’ve been around, uh, John, you’ve been around this marketplace thing. We’ve been calling it the marketplace moment for some time. Shane, I know you as well from the ISV side, so I thought maybe we take a moment to have you both introduce yourselves. Maybe just spend a moment. I did a little bit, babe. Didn’t do it justice. Maybe a little bit of your background and Sure. And what you all do and, and why you’re here today. [00:02:36] John Janke: Uh, hey everybody, great to see so many friends, familiar faces. Uh, Vince, thank you for all the work putting this event on. I think it’s, uh, tremendous to be able to focus on Microsoft and everything they have going on. So, I’m John Yanke. I’m CEO of Tackle. I’ve been with Tackle since the beginning. We started the company in 2016 with the idea that the clouds would change the way that software was sold and marketplace represented the initiation point of that. That was long before. Really anyone was buying that way. Anyone was selling that way. We were working with some of the 2016 and there were some really early adopters who kind of saw the world the same way and were struggling to figure it out, and we just happened to be able to meet some of those large partners back then and help them find a way to. Launch their businesses and not only launch, but sell and sell repeatedly and then integrate that selling motion into their system. So, uh, I’m a lifelong se. I grew up in se, which is like my default persona. So if you encounter me like either at a customer or at an event, I tend to be just super curious. I call myself a nerdy cloud go to market guy, which kind of route goes back to my se heritage and uh, I mean tackle. We really live to serve the ecosystem and, you know, support not only ics, ICS channel partners as as the marketplace moments. I think it’s been a lot of moments, a lot of moments, you know, the time series of moments is, uh, interesting to see how it’s evolved. But, uh, it’s, it’s not just for ISVs. It’s really all partner types will go to market this new way, and it’s not just about one partner. Working with Microsoft, it’ll be about all the different partners and how they come together and how solutions get integrated together and just how we make that whole process easier. And AI is like obviously dramatically increasing the quantity of software. So yeah. [00:04:26] Vince Menzione: And I have some questions for you as well about what you’ve seen along the way. So we. I know, I know you’ve done some research on this, but super, super. I do wanna give Shane a moment to talk about his background and why he’s up here on stage as well. ’cause you’ve been at this a long time, Mike. We’ve known each other for a number of years. [00:04:39] Shane Wilson: Yeah. Thanks Vince. It’s, uh, nice to see you in town. I’m glad you’re doing, you’re doing well. Thank you. Yeah, thank you. [00:04:44] Vince Menzione: It’s, uh, getting much better. Much better. [00:04:45] Shane Wilson: Yeah. Yeah. So, Shane Wilson, for those who I haven’t had the chance to meet yet, uh, I run, um, Cohesity’s Cloud, cloud business, and, um. Yeah, like John, I’ve been at this for kind of since the beginning of the marketplace, co-sell, sell with, you know, motion, call it like 13 years ago maybe. Um, you know, I got my start sort of working with Clouds, ISVs at NetApp actually. And, um, I was just chatting with John backstage about this, but we were trying to figure out how to put NetApp into the cloud with Amazon and with Microsoft and, and everybody really. Um, and that was more of a, a build with motion of how we’re gonna partner with. Ias PAs and do something new in the market that’s meaningful for customers and for partners. And um, but since then, co-selling marketplace has become a major motion. Right. And so I’ve spent my time post that at a bunch of ISVs, as small as, um, you know, a 50 person, 40 mil, a CB company, um, up to up to, you know, 10,000 plus. I was gonna say some of the largest [00:05:42] Vince Menzione: up there as well. Yeah, yeah. [00:05:43] Shane Wilson: Yeah. So I’ve been fortunate to work with a lot of, uh, great partners and, you know, had the experience of. Trying things and failing and then trying things and winning huge multiple partner of the year awards and all that with the different clouds. And with Microsoft in particular, I’m really passionate about, um, the partnership potential and really the, uh, the selling potential in the field because Microsoft has such a leadership position when it comes to co-selling, engaging with, with ISVs and all partner types, and really helping people evolve how software is bond sold. So. Well, [00:06:14] Vince Menzione: so great to have both of your perspectives and expertise, John. So 2016, like marketplace wasn’t even a thing, in my opinion. Right? It was just really, you, you, you clipped it right at the very beginning. You started off early. Uh, I wanna talk to you about like what you’ve seen, and I know that you spent an inordinate amount of time on the. Understanding what’s going on in the marketplace. And I come to you every year and ask like, what’s happening? What’s changing? I know you, you’ll have, we’ll talk a little bit more about your event that’s coming up. I’d love to get your perspective. We’ve talked about this a hundred billion dollar moment that was, that is, uh, still playing for 2026. Uh, a lot of, uh, ingestion, I would say a lot of organizations getting past that 1 billion Mark. Love to get your perspective on what you’re seeing right now in the marketplace and, and what partners in this room and others need to understand and how they need to embrace it differently. [00:07:03] John Janke: Yeah, it’s been, I mean, it’s been really interesting. We started in 2019 to write research on cloud. Back then it was just marketplace cloud go to market as a term wasn’t pioneered yet. Uh, and we did that because no analysts were covering the space. Yeah. And you know, back then the thing we would hear from partners was like, how big is this thing? Like how like are people selling? Is buyer behavior changing? Are partners thinking about this? And we really tried to. Think about what research we could do that would just help. At that time, mostly ISVs build their justification to create these routes to market. And, uh, we’ve done that. We published the state of cloud Go to market report every year. It’s a really fun research report. People are like, oh, who do you have? Write that. I mean, it’s my co-founders and I write it. Uh, we, we create the survey. We listen to our customers and what they wanna talk about. So if you ever are like, Hey, we’d really love to hear about these trends, please tell me ’cause we’ll, uh, weave them into state of cloud, go to market. And back then it was. Very little dollars were flowing like we were, this was probably, we were in maybe hundreds of millions of dollars were flowing through the cloud marketplaces back in 19. Um, and we played it forward just based upon a lot of different research and, and you start to think about the trillion dollars of B2B software sold, let alone the other trillion dollars of. B2B software sold to the SMB, which is different. Uh, all of that starting to migrate to the cloud. Similar to how infrastructure, like you think back to 2006 or 2007 when the primitives of cloud were created, people are like under, you said the underestimate overestimate in two years, underestimate in 10 years like that, that was kind of the scenario. With, with marketplace back then. Um, and I think a couple years later, we built this a hundred billion dollar prediction for 2026, and it was bold at the time and a lot of people were like, that’s crazy. But when you go back to that $2 trillion of software, it’s really only 5% of software migrating to the clouds and all data points signal that that’s coming through. And there were a handful. Of linchpin moments to enable that volume of dollar shift to start to happen. And I think for a lot of years it was the pioneers who were creating this new movement. And I put Shane in that pioneer category, uh, both with small and medium and large companies pushing the envelope. Uh, like changed the way that you sold along the way and your company sold? Uh, it, it was that pioneer moment, but along the way, that pioneer moment led to larger companies acknowledging the shift and starting to say, wow, something’s happening here. Uh, and as those larger companies started to. Embrace the shift that led to even larger companies and, and I think the thing for me over the last two years, we’ve seen this huge shift from this is not just about cloud technical categories. This is a change in procurement and it’s across all software and partner types. Yeah. So, and there were some big moments. I remember like thinking back in 2018, what would be. A, a, a bellwether moment for the industry. It’s like when the largest software companies in the world start to sell this way. And CrowdStrike was a long time customer tackle. Yeah. We worked with them and they were always the one who kind of set the standard and then someone like Salesforce shows up and Workday shows up and ServiceNow shows up and you’re like, whoa, something’s changing. Uh, not only are they. Monstrous companies with huge ecosystems and large go-to-market systems, but they saw this movement as a way to continue to grow. Yeah. And they were business applications. They weren’t like security, DevOps, storage, infrastructure, so that business applications, large companies showing up. And then I think the multi. Partner, like the evolution of channel has been a huge, and we’ve talked about this consistently over the last few years, but it’s still like the, the quantity of dollars now flowing through channel, with marketplace is, it’s huge. Is staggering. It’s growing faster than direct, which I think is a, a big thing. Um. And it’s still early. Like I think it’s like there are, there are, and there was a recent, a channel partner recently announced they processed a billion dollars through Marketplace, which was I think the first time a partner talked about that the same way a lot of software companies do. And it wasn’t [00:11:15] Vince Menzione: the largest reseller partner out there that did it, right. It was a company that was a little bit smaller, but a little bit more agile and nimble in terms of the way approach to it. So [00:11:23] John Janke: that, that’s a, a second part. And then the third part is like we’ve, buyers do not. Buy on marketplace, which may sound a little controversial, if you’re not really close to this market, it’s, it’s still more of a fulfillment vehicle. Um, that behavior is starting to change and it’s the intersection of everyone’s trying to figure out what is their PayGo product-led growth strategy to complement their traditional selling motion, and then how do they, if cloud. Marketplace has become a component of their system. How do they not only have their like enterprise motion aligned to it, but their kind of user discoverable free trial, PayGo style motion. So that’s been like last year it had started mostly with startups. That is trickling into all companies are thinking about, yeah. This, which I, I do think signals buyer behavior change. I mean, we’ve seen 400% increase in buyers over the last couple of years. So massive number of buyer increase, and that’s wide across the distribution of buyers. So unpacked a lot of data there. Yeah. Uh. Yeah. Happy to dive in deeper as we go. Yeah. And you’re, you [00:12:30] Vince Menzione: know, tackle’s gonna be leading a workshop after, after the main sessions on stage here, so there’ll be some great opportunities to get face-to-face with you and your leadership team. Yeah. [00:12:38] John Janke: Shout out to Colton and Rebecca, who are probably in the audience, who are two practitioners on our team who support large ISVs as they go on this journey. So this will not be me talking about high level. Uh, kind of industry stuff. It will truly be the people who help partners figure this out leading that workshop. [00:12:55] Vince Menzione: Well, there’s still a lot of high level, but I want to give Shane an opportunity here. ’cause you’ve been at the forefront of this marketplace opportunity and, and done it at many organizations that were at the early days of doing it, right? Like kind of a Yeah. The pioneers, I guess, for lack of a better term. Yeah. [00:13:09] Shane Wilson: We, we failed in many ways and one in many ways. And I, I do wanna pick up on the, the partner, uh, reseller, billion dollar milestone too, because, um. When I, I was familiar with this partner, uh, from a couple years ago when they first made their billion dollar commit. Uh, at the time, I think it’s when it was actually Amazon, but when they made their, their billion dollar commit, um, it was the first time I’d really heard about a channel partner, um, going deep right with that. And I was like, really? A billion. You could do it. You got some big contracts and, uh, you know, it was a multi-year commit and they actually hit it faster than than expected. So they, uh, yeah, it’s, it’s probably the first and the biggest, but also they got there faster than they were, they were, um, expecting to, it just speaks to the, not just the volume, but the velocity right behind it all. Um, and then, yeah, from an is SV perspective, uh, yeah. I think if you wind back the clock, I even six, seven years ago, right? Uh, you know, ISVs, were just trying to figure out how to do their first, uh. Yeah. Their first deals, right? Yeah. How to start cashing that cloud, GTM, check how to cash in on the Mac. Uh, that was even before the Mac was, was as big as it is. Um, but I remember doing our, our very first marketplace deal at, uh, it was a, a startup mid-size ISV. And, uh, this is before we were actually working closely with, with tackle, uh, and, uh. It was hard. Yeah. We were, we were literally taking customer demand who wanted to buy software, uh, you know, on the marketplace. Yeah. And trying to figure out how to get it done. So working with engineering and PM to get things listed like a day before we needed to close the deal. And it was one of the largest, um, retailers, uh, in the, in the us. And, uh, so we got it done. It was very challenging and that was the early, early days. But you fast forward to, to the last 3, 4, 5 years and, and yeah. What, what I’ve seen is, um, ISVs that actually. Didn’t have any real meaningful engagement with clouds. Um, start to connect the sales motion, and not just for marketplace, but for co-sell, right? And doing it with, uh, with tackle and core. And, and there’s some history there, like getting, getting sellers connected early stage Yes. Start to get leverage. And there’s so much to unpack behind that, but that, that’s such a meaningful motion where, you know, I took ISVs from essentially zero impact, zero lift with, uh, cloud providers to 500 mil a CV impact annually, right? Getting walked into accounts. By the hundreds every quarter. Right. Um, now it takes, takes work. Um, there’s a lot of things you gotta do from a company buy-in perspective to get there, but, um, yeah, there’s a lot of upside and that’s, that, that’s sort of the ISV story. And then I think what’s more interesting now beyond ISVs is the partner element to it, because where I see the future opportunity is actually with partners doing NPO, uh, together. And so I think that’s more exciting for everyone across different segments and across different, uh, reseller. And even Disney communities. Right. We’ll see how the, the, you know, that, that market evolve. Well, you bring up an [00:15:57] Vince Menzione: interesting point too, because in the very early days, it was really just the largest ISVs that had their own direct selling organizations. They would utilize a core solution or tackle solution together, and they would do face-to-face coverage with the partner sellers and, but that’s not necessarily where the customer buys. And so there were these resellers and we could mention all of their names. A lot of them are here at our event, a lot of ’em are watching today. Uh, that would go after that market. And you would, you would have this tug, this tug of war going on too, like a customer. You’d be educating the customer saying, Hey, you could, you could burn down against your Mac agreement, you, your Microsoft commitment. Uh, and then the, you have a seller on the other side trying to sell a different way because they get paid a different way. So you had this. This tug of war that was going on back in the days and that those seem to be going by the wayside. You, you heard Cyril on earlier right in this conversation saying, we’re gonna do away with that challenge that we have today. We’re gonna get out ahead of it. And John, you saw, you know, you talked about this, uh, you talked about this moment. I guess you’re right, we’re in a series of moments. I think we’re at the next moment, in fact, beginning of the next moment. Um, what, what else in perspective that you wanna share here with regards to. You know, we talked about some of the largest ISVs and some of the smaller ISVs, both you and Shane, probably this conversation here in terms of, uh, uh, you know, the balance of ISVs selling in larger ones can do their own and then channel partners. What, what does that balance look like? [00:17:20] John Janke: Yeah, I mean, maybe, um, pros and cons with success is there’s a lot more competition for attention. Like, uh, cloud sellers have a lot in their bag already. Yeah. Uh, so if you’re a small ISV and you’re showing up, uh, you have to compete with not only the core things that they care about, but all the other ISVs who’ve established precedent with success in the market. Um, so I think. You know, and then there’s, even in the Microsoft world, there’s the managed versus unmanaged, and That’s right. Like your perspective as a partner as to how do you approach Microsoft when you operate in those two camps and they’re different and, and it really does just come down to work. There’s ways to be successful. The playbooks are slightly different. Uh, you probably, if you’re smaller, have to do more work to stand out and you have to be really thoughtful. About the work that you do and when you do it. Um, and a lot of times I, ’cause I, I think there’s still this misnomer in, you know, having been at this closing in on 10 years, it, it’s surprising to me sometimes that people are like, if I list people don’t just buy. Like, I thought that’s the way these marketplace things works, field of dreams. I, I would love for that be true. It’s still not true. Um, but if. If you can refactor that to be like, that’s the starting point in the journey and not the destination, and then what work do you have to do to go build your brand? Help your early customers. ’cause there’s a clear and compelling value prop that you can use independently to go help your customers. That then allows you to show up with the clouds and be like, Hey, I’ve got something to say and the something I have to say is good for you and it’s good for our joint customers and it’s good for me, and why can’t we just do more of that? Yeah. So I think that like. You gotta own it. If you’re small and you gotta put the work in. And if you’re big, you really have to understand like the what works and how to scale it. Where do you focus? ’cause there’s so much, Shane and I were talking backstage about all the, there’s a lot you can take on, uh, at any given time and really like what is the best layer of the go-to-market stack to focus on? A lot of people try to figure out. Like especially large companies, how do I do the bigger deals? How do I tap into the big customers? That seems like the easiest spot to spin the dials. And then how do I layer channel in? If I can add channel to that, then I can maybe double that. And then how do I think about international? How do I think about product-led growth, like SMB? There’s all these different layers of the stack, but you have to prioritize ’em based upon what’s important to you and what’s gonna have the biggest impact for the cloud partner, uh, and not try to do everything at once. [00:19:54] Shane Wilson: Yeah. And I think from a, from a small ISV perspective, um, marketplace sort of is the channel, right? So, and historically they were like, if you’re a small SaaS company, yeah. I just want to get scale at this thing. I wanna list, list and, and sell. Right? Um, so sometimes that’s a more of a challenge for, it’s, it’s an opportunity for the isv, but it’s more of a challenge for say, the partner community at large, right? Yeah. But if you get into this mid-market or enterprise ISV space, the winning opportunity is very clear. Um, you, I think you and I were talking a couple days ago, John, about, okay, the first wave of CrowdStrike hitting a bill was, hey, doing a lot of direct business. But guess what? They’ve accelerated even more and faster by pushing everything. The channel partners and you look across the ecosystem of. The ISVs winning or not, are not doing it in this direct model. They’re doing it in conjunction with channel partners. So, um, so when I look at the segment on a smaller ISV, yeah, you can get scale, uh, through the marketplace and that’s essential. You get relevance with, uh, the cloud sellers as well from Microsoft. But you know, if you’re really looking to go from say, a hundred mil to a billion or more, right? This is where, hey, all this business is channel first and channel best, right? Yeah. And that’s, I think the, the future together. [00:21:01] John Janke: I mean, you, you had an interesting comment where you’re like, is the marketplace. A channel or not, right? Yeah. And I think to some people it is. To some people it is. I’d be like, it’d be interesting just for you to share some of that perspective. ’cause I think there’s probably a wide range of points of view in the audience. Well, there is, [00:21:16] Shane Wilson: and even internally per ISVI think there’s, uh, dialogue around is this direct or not direct. And, um, I’ve started to use language, which is like one tier versus two tier. Um, because. The reality is, um, I’ve been using direct so far today, but I, I like to use one tier and two tier because at least then it, it gets everyone internal to a company. It helps you get buy-in from stakeholders that matter, whether that’s legal or finance or operations, sales, right? You go across the stack of getting company buy-in to go do it. It’s helpful to progress the dialogue if you start talking about one tier and what that means on a per region basis. Mm-hmm. Like one tier in the US maybe it’s not that hard, but if I’m an ISV trying to scale and trying to go. Across Europe or a PJ, uh, basically outside the us Yeah. One tier is hard, right? It is. And so you, you absolutely need the channel partners in there to, to scale the thing. Um, and uh, so yeah, for me, like I said, it’s, it’s a partner game. And, uh, yeah, I, that’s what I try and promote with all of my ISVs to think about being world class is like. Never, never cutting avar out of a deal. Always gr putting a growth plan together with them. And that’s, that’s where you get the, well, it’s multi, well, it’s presumptuous too. We think, [00:22:25] Vince Menzione: like we own the customer, whether it’s us or the, you know, we’re the gateway, the mark marketplace becomes the gateway to the Microsoft seller. Yeah. But neither of you own the customer. The customer makes his own buying decision. And that might be on the third party. That’s why the multi-party offers come into play here. Right. [00:22:38] John Janke: And I, I think that this, some of these signals when you think about what’s happening, yeah. The last three years, the ISV has owned the channel strategy for Marketplace and really kind of pioneered Who are the partners I work with? Yes. Help them figure it out. That’s gonna flip like in the next year or two. That’s right. Where the channel partner will actually own the marketplace strategy for the buyer. Where they own the buyer. That’s right. Which is a change. And I, I, I was talking to someone on Shane’s team and she was like, I spend a lot of time educating our channel partners on how to work this way, which is again, further signal they’re, they’re learning to work in this new way. So some have punched through, the early adopters have punched through and been like, this is a material new business for us. But I think that’s gonna be for all the ISVs in the room, that’s gonna be a shift for all of us where we somewhat relinquish control to be like, okay, you got it. Now what? What target are you gonna drive and we’re gonna manage that differently. [00:23:33] Vince Menzione: And what and what I hear from ISVs, the largest ISVs, in fact, is that they need help building out their channel strategies. Some of them are here, in fact, for those conversations, because it is a multi-party solution that is being offered, the customer is making a decision, not just on the one solution. They’re thinking about a complete solution set, right? If we were talking about data and ai, we’ll have data and AI up here. Next we’ll talk about governance. We talk about all the components of data and ai. It’s not just one vendor that’s coming in to solve for that. Shane, I want to get your perspective on some of that. [00:24:02] Shane Wilson: Yeah, I think multi-partner is huge, right? I, I, uh, I think it’s a little early, but I’m intrigued by the potential, um, of having a couple different ISV segments wrapped into, um. Uh, you know, a multi, multi-party offer, right? That a channel partner can put together. And it, it’s already happening to a degree. I don’t think it’s happening at scale, like it has the potential to, but, you know, being in the space that I am, we’re in, um, sort of a data security space, and the security ecosystem is broad, right? And so there’s a lot of different aspects of cyber resiliency that matter, uh, for our customer base. And there’s nothing we wanna see more than, whether it’s Presidio or CDW, or, you know, you pick here. You, you pick your channel partner then actually putting together a really strategic offer for, you know, their customer, leveraging the Mac to go get the deal done right. And then bundling multiple solutions together, uh, in a portfolio sale for the, for the customer. Yeah. Um, it’s, you know, it’s what they’ve done with Disti in the past, right? Yes. Yes. It’s, but the reality is there’s a lot of mutual value exchange with the Mac, with the Microsoft sellers for the customer, with procurement. Now that buying motion has just evolved, right? And so, um. Yeah, there’s, there’s so much upside for this multi-partner aspect of it. [00:25:10] Vince Menzione: Agreed. Agreed. John, I know you’ve got your event coming up in another week, and I, I don’t want to take away any of the excitement around some announcements that things are going on. What are some of the trends you’re starting to see? I. [00:25:21] John Janke: I mean, a lot of what we talked about is we do this cloud, go to Market xp. It’s a digital event, uh, where we bring, you know, kind of the cloud providers, ISVs practitioners. We break ’em down into categories. Uh, so that’s next week we do a day on strategy. So the first day is really about where the market’s going. The second day is practitioner grade, so there’s a rev ops track and an alliances track because for cloud go to market, to get the super scale, you gotta get the alliance team, the rev ops team, and the revenue team to work together to drive an outcome. And that is what the people who get to a billion dollars do and do well. And then they think about, you know, how many of my reps know how to win this way? Uh, you know, Wiz was an interesting one where they, they published last year, 99% of their sales reps knew how to win with marketplace, which, like that was, they were kind of born cloud go to market native, uh, which was. Really fascinating to see, but that’s a lot of what we’ll focus on next week is kind of that intersection between rev ops, alliances and revenue and thinking about, ’cause there’s a lot of discussion around automation, like how, how do you automate this process? How do I integrate it with systems and automation is totally important, but. Revenue generation is more important. They’re like, that’s what people actually want. Uh, and I, I was talking to an ISV last week and they were like, Hey, you know, we, we did some automation, but we’re not getting the results we were looking for. How can we rethink that? So we’re gonna really try to continue to share examples of people who have cracked the code on not just learning how to win and setting up the infrastructure, but win win repeatedly. Win at scale. Shane, any [00:26:56] Vince Menzione: insights from your side on what you’re starting to see as we enter 26? [00:26:59] Shane Wilson: Yeah, I, I think I’ll take the trend topic and talk about kind of what. What’s most important, which is like the, the trend is that winning ISVs that do it, right. Um, pull the whole company together in one strategy around cloud go to market. And so it’s, it’s, you know, it’s a dovetail on what John was just talking about. Yeah. But if you don’t have sales product, rev ops right? The whole company, even marketing right. Really geared around this motion, it’s gonna be challenging. And so, um, I can share a couple things that I’ve done at a couple companies now to build out teams to sort of, um. Fast track that in and make it more possible, which is, you know, when I think about how to like create partnership teams that matter, it’s like, yes, you need the alliances team in there first. Um, but then you also, I like to have my hands on the actual marketplace operations motion of it too. ’cause how companies do quote to cash. Um, and process orders matters a lot. And, you know, reps aren’t gonna sell in the marketplace if it’s hard. And so we need to be able to make things field turnkey to field sellers. Um. To get to that 99%. Like Wiz, we’re not there yet. ’cause we’re born there we’re, I’m, I’m coming from, uh, hey, no one’s ever done this before, to, Hey, we’re gonna go win in this space. So, yeah, it’s important to get everyone on board. And so it, when I think about how to build an organization, a winning organization structure around this, it’s like the I, the Alliance team comes first, but beyond that, like I need to get a marketplace operations. You know, e either on the team or super, super tight, um, dialed in. And then beyond that, there’s a go to market element of, of selling, right? And so that’s the sort of the third wheel of, I think real successful ISV partnerships is do you have folks focused on the motion helping en enable all the broad, the broad sellers to. You know, do the motion correctly, not to make too many mistakes on first calls with Microsoft and go cash that Mac check. Right. Um, and it sometimes it’s hard to get the internal stakeholders to believe in that quickly. Right. So, but I, I, I’m happy to chat with folks more post session as well on this, right. But I, the, the three legs of the stool are super key with alliances and then the actual marketplace sales motion to make it real turnkey and easy, um, operationally inside the company. And then actually have go to market specialists, right, to go and, and push that. So. Um, if folks wanna talk about your, your company, about that with me, I’m happy to. Yeah, that that’d be great that you offered [00:29:07] Vince Menzione: that time. [00:29:07] John Janke: I like this workflow shift where this used to be about like, Hey, how do I help a deal? How do I win with a customer? Yeah. And it really, I, I had an, you know, again, I, I get to spend a lot of time with ISVs who are. Pioneering this and just really learning from them and then trying to apply those practices to the company and the ecosystem. But someone was talking about from lead to renewal, like that’s really the process that cloud go to market needs to be aligned to. And if you break down your lead to renewal process and then you look at all the different touch points, and then how do you inject, you know, people, process, technology into that entire lifecycle. It will. Change the way you think about this because a lot of people are like, Hey, why don’t I get more leads? That’s right. And when you, when you boil down your lead to renewal process, if you skip all the way to leads and you haven’t done the work in the middle of the funnel to go build a brand, to enable you to go tell a better together story to co-market, I mean, you’re never gonna get the leads. Like, so I think that’s a, a good framing just for all of us to, as we think about the business and where we’re at, like lead to renewal. ’cause you can use a lot of different tools in there. [00:30:12] Vince Menzione: I want to touch on, ’cause you talked about this a little bit earlier too, in terms of the, the framing was, you know, it used to be the largest organizations that had the largest commitments that went after it. Understood it. Uh, in the beginning you had to teach them how to go buy off of it. Right. It seems to be moving down market. Right. And this is, some of this is the channel coming at it. Some of it’s also we’re gonna have PAX eight and Ingram Micro on stage here the next two days. People that have kind of stayed away from marketplace. Right. But in a way saying. Even the smallest customers need access to the same sets of tools and capabilities, and they want to purchase modern technology the same way. And so it seems to be changing things. I know, John, you’ve had it some perspective on some of this as well. [00:30:54] John Janke: Yeah. A, a big, another big, and this I think trend will be next year, it’s happening right now, but it’s still really early, is this idea of evolution of storefront. So if you want to change buyer behavior, you have to meet buyers where they show up, uh, and. Like today, storefront, think Azure Marketplace or AppSource, those are the storefronts, but that’s not where people organically discover. So how do you initiate those buying moments where people organically discover? And that’s gonna be some sort of refactoring of storefronts. Uh, and Jay McBain has talked for years about how they’ll be more marketplaces and more storefronts. That’s right. And, and I actually think that’s really starting to come to life. And PAX eight to me, I think is a great example of that, where they’re a marketplace for MSPs focused on s and b. And they’re gonna need specific solutions that their MSPs can package up to deliver value to their SMB customers. But that’s gonna need to somehow connect to Azure Marketplace and AppSource. That’s, that’s right. Which is like a, a, a fuel system. So I, I think it’s a good signal of this change that’s happening like more storefronts. More marketplaces, more specificity around solution and bundle and what do people need? So I’m, I’m excited to hear more from, I’m excited as well. [00:32:06] Vince Menzione: I also think there’s a level of sophistication happening down market. I call the MSP market that wasn’t there even a year or two ago, right? These were organizations that were used to break fix and now getting involved in a much clearer, uh, ways in terms of driving a complete solution set in ways that they didn’t before. Really, they weren’t involved in that level. [00:32:27] Shane Wilson: Yeah, I would, I would double click on the, um, the storefront idea, right? Because folks are finding products in new places and trying to buy products in new places. So that’s a real deal, um, coming from a security and infrastructure perspective, um, even in today’s world of, hey, there’s a cloud buyer out there and there’s procurement that buys cloud stuff, and we’re attaching to that a, a major part of the motion that we actually have to put. Time and investment into learning on is what I call building a bridge and building a bridge between say, a traditional buyer of software to whoever’s gonna click by on the deal. Uh, who owns, say the, the Azure tenant. Right. For a giving you customers you’re selling to. And so there’s, there’s, there’s topics like, Hey, how is budget attributed across the different, you know, lines of business inside this, toward the Mac? Yeah. And then there’s the very sort of tactical process of like. Does the person that needs to accept the offer even know about what we’re doing in the deal, right? So there’s a lot of bridge building you have to do from an ISV and partner. That’s where partners play a huge role too, is like helping build these connections in and build a bridge early in a campaign, right? In order to have success. So you can actually transact easily when you’re trying to get the deal done, but it goes to the point of, hey, the demand and purchasing, um. You know, center of gravity is changing, right? Yeah. So, [00:33:39] John Janke: and every ISV, whether you think you have a marketplace or you don’t, most people would say, I don’t have a marketplace. But everyone on their website has a tech ecosystem page that shows all of your partners. That’s right. And it shows your technical partners, and it shows your channel partners and your system integrator partners. And effectively that is a catalog and that catalog. Has zero actionability. All it does is you click on it and it takes you to your partner’s website. So if your website is where all of your buyers discover you, why wouldn’t you want to enable them to take some action? Yeah. This is what storefronts will be, and that will not just be your storefront, it will be all your channel partner storefronts, and they’ll all connect together like that. This is a big wave that I think will really play out over the next 24 months. Yeah, I think [00:34:22] Vince Menzione: we’re starting to see that in a big way and, uh. Everyone’s gonna embrace it. [00:34:26] Shane Wilson: Well, you see a consumer grade, right? It’s gonna move from consumer grade on, uh, say social media, buy a thing right into the enterprise space, uh, dramatically, I think the next two years. [00:34:33] John Janke: Yeah. Shopify did this in B2C, like when Shopify and there, there’s really interesting like, um, story where when they were, I. Early raising money. And they talked about how like in B2C e-commerce, there would be thousands of new storefronts and everyone’s like, no way. Like Amazon and Walmart Got it locked up like, this is never gonna happen. This company’s going nowhere. I mean, Shopify’s a hundred billion dollar company now. ’cause they created hundreds of thousands of storefronts for small businesses and entrepreneurs like. I think B2B will look very different than that, but that’s, it’s like B2C always trickles into B2B over time. [00:35:10] Vince Menzione: So, final advice for our partners watching, listening, being in the room here today, and we, I know we’re gonna have some more time for you to talk with them. Uh, appreciate you making time to do that. But any final advice for them as we finish this new fiscal year with Microsoft? We get into 26. And for the, the partner ecosystem in general, how they, you know, you talked about a few things, a few trends happening. Uh, what do you both have to share with this amazing audience? [00:35:33] Shane Wilson: I mean, I’ll kick us off. I think consistency is most important, right? Yeah. So it’s one thing to, um, uh, you know, get a couple wins or, or, you know, know a play, but consistency across the organization and starts at like the C-suite down to the shop floor, right? Uh, of how you’re operating your strategy, how you’re executing on your strategy, and then also how you’re sharing wins. So, ’cause this is a journey, right? And it’s not always, um, say the first month or first quarter that you get all the results that you want. But it’s really critical as a leader in a company to be able to help articulate what the stepping stones and the milestones look like to get to greatness and then to celebrate those wins all along the way. And do that internally and also do it externally with Microsoft and with the partner community broadly. Right? So I would say consistency, that rhythm of business, just being very thoughtful around that is, is, is super important. And then, um, with that, just leveraging. The community. Right. Um, so events like, like up Right. And just, you know, I’m happy to share any of my secrets to success with anyone in the room. Right. But just le leveraging the community and, and folks like tackle and others, right. That have so much experience in this space as well. So, [00:36:36] John Janke: yeah. I, I think the, um, kind of back to the time series of marketplace moments, there is, uh, people who started in 2018. A lot of people failed in 2020. People started. A lot of people failed in 2022, maybe less people failed, but still lots of failures. And there’s some PTSD in the industry around some failures. Like, I thought this was gonna work. I thought lots of people were gonna buy, I was gonna get all these leads. Oh my gosh, co. I was gonna co-sell and I was gonna help my deals go faster and maybe it didn’t happen. The thing I would say is like all of these moments compounded lead to. A difference of experience, and that is like if you’ve struggled, take a step back and be willing to be like, Hey, the market is evolving and there’s ways to take a step back, look at the success or failure you had and refactor your strategy for the future. So I would say, um. And, and it’s fun. It’s really fun to talk to ISVs who are hitting an unlock moment. Like I was talking to someone this morning and they’re like, Hey, like we, we had this major unlock moment. And like things have kind of taken off. ’cause a lot of times in the journey you end up with this like 10 x factor that happens. You struggle consistency’s such great advice. Um, like you set a goal your first quarter, it doesn’t happen ’cause you’re, you’re still like. Trying to teach people second quarter, maybe a little bit happens and you’re like, oh my God, is this actually not gonna work? And then in the third quarter it starts to snap into gear like that consistency’s required and how do you get to that 10 x factor? ’cause they’re there. And this is a little bit about our event. I mean, if you’re interested in joining. A little bit of a [00:38:11] Vince Menzione: segue for you, Jen. [00:38:12] John Janke: Yeah, we’ll have, I mean, we’ll have, uh, and, and again, like on the practitioner grade day, we’ll have some folks from Microsoft joining us, Michael Clark, who owns the co-sell, uh, engineering organization. Ryan, who’s been a long time part of the marketplace organization will join Adam Boyle or head a product just as we talk about how do we, I. Industrialize this for enterprise grade scale. Vince is gonna be on yeah, kind of doing a highlight reel of this week. ’cause there’ll be so much to share with the ecosystem. Uh, and then a lot of really interesting customers telling stories, uh, throughout it that I think, you know, we’ll, we’ll get to take snippets of those and share ’em with the ecosystem. But, uh, if, if you register, you get access to all the content remotely asynchronously as well, so you don’t have to actually show up full time. [00:38:54] Vince Menzione: That’s great. And I do think during this time of rapid change and transformation, it’s important. We had to stay, we had to lean in. We had to continue to lean in. We’re just at the early days of change. Right. We talked about many moments. Yeah. So, so great to have you both here. Um, thank you for making time as well, uh, networking with some of our community here. I know that tackle’s gonna be leading a session, a workshop as well. So Shane, thank you for making time for us as well. Thank you, Vince supporting us. Yeah. Thanks Vince. Great everybody. Thank you. See you through the day. Thank you so much. Appreciate it. Thanks for tuning into this episode of Ultimate Guide to Partnering. We’re bringing these episodes to you to help you level up your strategy. If you haven’t yet, now’s the time to take action and think about joining our community. We created a unique place, UPX or Ultimate Partner Experience where leaders come to learn from each other. It’s more than a community. It’s your competitive edge with insider insights, real-time education, and direct access to people who are driving the ecosystem forward. UPX helps you get results, and we’re just getting started. We’ve got big plans for you this summer as we’re taking this studio, and we’ll be hosting live stream and digital events here, and it’s all coming to you soon. So visit our website, the ultimate partner.com to learn more and join us. Now’s the time to take your partnerships to the next level.

Recorded Live at Ultimate Partner LIVE in Redmond, WA Unlock the secrets to explosive growth in the digital landscape!  Subscribe to our Newsletter: https://theultimatepartner.com/ebook-subscribe/ Check Out UPX: https://theultimatepartner.com/experience/ Is your business ready for 2026? Welcome back to the Ultimate Guide to Partnering® Podcast. Join Microsoft’s Sandy Gupta and NVIDIA’s Pat Lee as they explore the monumental shifts driven by AI in the software landscape. Discover why “ISV” is transforming into “SDC” (Software Development Company) , the dramatic reduction in AI token costs and hallucination rates, and the acceleration of cloud migrations. Learn about Microsoft’s commitment to a “marketplace first” approach and a single $1 billion marketplace deal this quarter , and NVIDIA’s vision of embedding AI into every application. This discussion highlights the emergence of agentic AI, the convergence of ISVs and SIs, and the critical importance of embracing AI for all partners to drive significant business outcomes and avoid being left behind. We’re curating the very best of these moments—fireside chats, expert panels, and executive insights—so you can stay ahead of the curve and fully aligned to where Microsoft and the industry are heading. And this is just the beginning.More sessions. More voices. More of what you need to know. If you’re not yet part of the UPX Community, now’s the time to join us. Access exclusive content, events, and strategies that keep you in front of what’s next. Thanks for being on this journey with us.— Vince https://youtu.be/ld9h1pZJ_Ro Key Takeaways: The terminology for independent software vendors (ISVs) is evolving to Software Development Companies (SDCs) to reflect a broader scope of software innovation. The cost of AI tokens has dramatically decreased, and AI hallucination rates have significantly gone down, leading to greater democratization of AI. Cloud migrations are accelerating, largely driven by AI, which is broadening opportunities across the entire value chain for the ecosystem. Microsoft is adopting a “marketplace first” approach, with a single $1 billion marketplace deal projected for this quarter, indicating a massive shift in how software is sold and consumed. Agentic AI, characterized by headless agents focused on specific tasks, is a rapidly emerging area with significant potential for business process automation and interoperability across different applications. The industry is witnessing a convergence of ISVs and system integrators (SIs), as customers require both robust software and hands-on implementation and change management support. If you’re ready to lead through change, elevate your business, and achieve extraordinary outcomes through the power of partnership—this is your community. At Ultimate Partner® we want leaders like you to join us in the Ultimate Partner Experience – where transformation begins. https://youtu.be/s33fltuizEo Transcript: Key Tags: AI innovation, software development companies, SDC, cloud marketplace, NVIDIA AI, agentic AI, digitaansfol trrmation, B2B technology, strategic partnerships, ecosystem growth, Microsoft Azure, AI monetization, enterprise AI, digital agents, industry foundation models, employee productivity, customer engagement, business process automation, drug discovery, cyber security, financial services, healthcare AI, channel partner collaboration, tech intensity, go-to-market strategy, cloud migration. Transcript: [00:00:00] Sandy Gupta: This space is moving so fast and it’s like I was talking to the Pearson guys. The fastest training that’s happening is people who are learning how to develop agents who are non-technical. [00:00:14] Intro: We believe this time is like no other. We believe we refer to these as the tectonic shifts, all the hyperscalers in the world, if you add them all together. Managed services will be one and a half times larger because it is the customer buying behavior that has created the need for all of us to rethink our models. Until we have data quality, the effectiveness of AI cannot be realized and effectiveness of the partnerships cannot be realized. Can you figure out, first, what your purpose is and how Microsoft can support your purpose and how you can support Microsoft purpose? Now we have a partnership. It’s the ultimate partnership. Welcome to The Ultimate Guide to Partnering. I’m Vince Menzi, own your host, and my mission is to help leaders like you achieve your greatest results through successful partnering. We just came off Ultimate Partner Live at Microsoft Redmond Campus, our most powerful event. Yet, over two days, we gathered top leaders to tackle the real shifts shaping our industry. If you weren’t in the room. This episode featuring Sandy Gupta from Microsoft and Pat Lee from Nvidia brings us right to the edge of what’s next. Let’s dive in. So I am thrilled to invite to the stage. Uh, first of all, I want, I’m inviting back somebody who was with me in Dallas for the very first time. He was a day number 52 in his new role, Sandy Gupta, who’s an incredible leader. Uh, at the time we called his role infras, ISV independent software vendors. We’re kind of moving away from that. We’ll talk about that. And here’s the other cl. Piece, we’ve got Nvidia up on stage, right? So have anybody here who’s heard the name Nvidia before? Uh, any, anyone there? Uh, we, we think that this is a formative moment in time and we talk about tectonic shifts, right? We talk about the world of ai, we talk about the build out. So I am thrilled to invite to the stage both Pat Lee. From Nvidia who leads the alliances and strategic partnerships and Sandy Gupta, who leads the software development corporations SD get ready to say SDC Software development companies. This is the new terminology we’re getting away from the old world of ISV. So I wanna welcome these two incredible leaders to the stage, Sandy and Pat. Glad to have you. So good to see you, my friend. Uh, so good to see you. I love this guy. So good to see you again, pat. Great to meet you. Nice to meet. Glad you could join us. Uh, Sandy, I gotta say, because I’ve, I’ve told you this before. We’ve had you on stage. We’ve had you on the podcast. I am envious, so envious of your hair. I just think [00:02:49] Vince Menzione: it’s incredible. He’s got, he got the most amazing head of hair. Um, well, you know, just by the way, just looking at. I, I just got a haircut and you, and you got a haircut. Like, and, and Pat, and I can, this will take me a full year to grow and Pat, I, and I can, I love it. So good. So join while we can. So good. So good. Uh, I’m gonna let you both introduce yourselves and then we’re gonna dive into this conversation, but so great to have you back. Thrilled to have you both join us. So I’ll let you introduce yourself and then turn it over to Pat. [00:03:17] Sandy Gupta: Yeah. I mean, Vince, first of all, thank you. It’s an honor to be on this platform. Again, thank you with these incredible partners. But first of all, thank you that you are safe. Thank you. I think, uh, you played down the accident you had, and I’m just so glad you are safe, and I know it’s still not easy, but yeah, you’ll recover and thank you. And, and, uh, you know, that’s, it’s, it’s amazing that you, you’re good. Um, look, I, I lead the global ISVs for Microsoft and so, um, or STCs. Yes, yes. Now it’s gonna take some while because it’s been a 32 years of practice of calling ISVs and. Well, we now see software companies emerge who are not like ISVs, what we used to think about as isv. So that’s kind of the change. So I spent a lot of time working with our ecosystem of software companies, helping them grow their top line revenue. Been 18 years in Microsoft and learning every day. Yeah, [00:04:11] Sandy Gupta: and by the way, one thing also is like incredible partner here, pat Lee. [00:04:17] Pat Lee: Well, thank you first of all, it’s a pleasure to be here, an opportunity to speak to this audience. So I’m Pat Lee. I lead a strategic enterprise partnerships at Nvidia, and I’m focused on really the leading enterprise hardware and software providers and helping them bring AI to their platforms to, and let them enable all the power of the data and, and what they’re delivering to their customers. And I think there’s a great opportunity there, huge. Once they’ve done that, it’s a great opportunity for all of you to help deliver and deploy it. [00:04:42] Vince Menzione: So thrilled to have you both on stage. Um, this is gonna be a really exciting conversation. Sandy, I got to be with you day number 52. Uh, I’d love to dive in a little bit about what you’ve learned from, uh, that was early October of 24. I. It seems like it was last week in some respects, but I, I would love, maybe we could share a little bit with this audience, like how you were thinking about this o other than the fact that we now stopped calling them ISVs and we’re calling ’em SDCs. Yeah. But I know that’s an overall vision for how you’re and how you’re supporting these partners. [00:05:15] Sandy Gupta: Oh, thanks Vince. Uh, look, I think if I look about what I’ve learned both in terms of externally and internally, what has changed and how it’s shaping for us for next year. Um, one is just externally, if you look at it, the cost of tokens have come down dramatically. If you look at that, I mean, I was just looking at a. Uh, report from Stan Stanford AI Index. It just came out. It was like the cost of tokens have gone from $20 per million tokens to seven, you know, 7 cents Wow. Per million token, right? And so, and the hallucination, which is also a big part of, hey, for enterprises, like for them to put an autonomous agent, they need to be very thoughtful about that. If you look at the recent reports, the hallucination has really dramatically gone down. In the same linear scale as the cost. And, and that is because AI is now, you know, really also being trained to look at the outputs of AI to see, hey, is it actually hallucinating or is it not? So there is a lot of democratization of AI that’s happened very, very fast. I will call it almost like a tech intensity. Mm-hmm. You know, when I joined, when we met first is, um, still the ics were connecting and say, Hey, should I do a co-pilot? Should I, yes. Infuse g PT four in my application, or should I develop a co-pilot? Now it’s like the co-pilots are already out there and, uh, for every role you can think of, whether you’re, you’re on a shop floor or you’re a physician, or there is a co-pilot for you. And then a lot of them are now looking at, Hey, what’s going on with, um, with, with, uh, with my agent framework, how am I thinking of monetization, governance, security? Go to market, all of that. So massive shift happening. Massive shift in, in that. Um, I would also say that we’re seeing a massive shift in marketplace. We, we talked about today with Serial and, and also we talked to John and and others about marketplace today. Uh, we are about to drive to a billion dollar marketplace deal this quarter. Wow. Single deal. Single deal. And, uh, that is, uh, so the shift to marketplace is real. And, and I think we are feeling it. Uh, we are very committed to it. Um, so that’s kind of happening. Uh, we are seeing some in interesting things that, you know, cloud migrations are also accelerating very fast and, and I think part of it is AI is driving a lot of acceleration and it’s really broadening opportunity for the entire ecosystem because there’s just so many ways you can think about the value chain that’s emerging as you get to cloud. So internally, I would say that this. Group of companies, the software companies that, you know, I’m managing as go to market is the fastest segment of our commercial business. Yeah. And so, uh, that’s fascinating. Good and bad thing is. Getting a lot of attention. Right. And so the good part of the attention was that Judson was like, Hey, this is important. Yeah. [00:08:21] Sandy Gupta: And here’s some money to go try a few things that you see are important for H two. Nice. So we can shape next year. Nice. So, so I think there is both internally, there is a lot of recognition of what’s going on and, and we need to, you know, invest and, and uh, and in certain specific areas. Uh, I would say, the way I quickly say is that shaping of for next year is we are going to have a really big focus on tech intensity in a sense of, hey, how do we help our customers do a quick fail fast? Hmm. Fail cheap, you know, way of investment because you have to try a lot of things. Right. In ai And we’re [00:09:03] Vince Menzione: saying customers, you’re talking about the ES software development corporations, [00:09:06] Sandy Gupta: companies. Yeah. And with them. For the end customers and for the end customers. Right. As well. And, and because there is a lot of trial needs to happen, there’s a lot of innovation ideas. Some of them will never see the light of the tunnel. But many of them are worth trying. And so we want, want to find a very agile way to invest resources and bring very specialized partners, small or big services companies who are deep in AI to really help our ISVs to do those things. Uh, we are gonna come up with a, one of the most, I would say, competitive migration program. And I’m very about that. Oh, tell [00:09:40] Vince Menzione: us more. [00:09:41] Sandy Gupta: Well, I think we’re still cooking. Okay. But I think this is where we, I feel like. The tam of opportunity for still a lot of the ISVs to go to cloud is huge. Exactly. And, and it’s, I think it’s an opportunity for us. So I, I’m very thrilled about that. Um, that I think that’s gonna happen. And then really next year is a big year for us to take a marketplace first approach. Good, good to hear that. And I can, I hear a roundup applause for that, by the way. I think that’s an incredible, [00:10:10] Vince Menzione: yeah. That’s incredible. [00:10:11] Sandy Gupta: I think those three things I would say, Vince, and, and, and overall, I was just telling Pat in the green room, hey, how we are going to stimulate our sellers to sell more with partners? Yeah. And, and already like, you know, Nicole talked about how we actually put the money where the mouth is today and investing in the ecosystem, but. Making sure that our sellers are really creating the demand that’s out there with our partner. I would love, I want to, I want to give Pat some time as well. Yeah. But I would [00:10:38] Vince Menzione: love to hear from you, like, how are you thinking? When we, when we were up on stage in October, you had basically winnowed down the organization, right? You took the top 30. Directly, and then you push down to the field organizations, the other large, very large, significant ISVs or SDCs. Yep, yep. How are you thinking about the management of this ecosystem? Especially in light of what you just mentioned in terms of the The adoption, the new adoption curve? [00:11:04] Sandy Gupta: Yeah. Do you wanna go to Pat first or do you want, then we’ll come back. Yeah. And then I think we’ll come [00:11:08] Vince Menzione: into Pat. Yeah. So [00:11:09] Sandy Gupta: the way it is playing out is like we are starting to think about what is the right resource model for an ISV. Where they are on the journey. Okay. I think we have had, for the longest time, you know, Microsoft super well, uh, that we had a very inflexible model that basically said, Hey, you can only do this if you have this designation or this or that. Yes, we have partners who are incredibly technical and they don’t need technical support from us. There are partners who are incredibly good at Cosal, say, Hey. I’ve got my customers. Don’t worry about it. I’ve got it. What I need you is innovation and, and help us, you know, but we can do the direct co-sell. We are good. So we’re trying to figure that out. It’s like, hey, where do we meet the partners where they are rather than create a, a very rigid model. I’ll tell you Vince, like I lean in like yesterday, I was in Orlando, just came back last night and we had like a, essentially a late stage startup with big partnership. Jason and I were both there. Very nice. And we are pretty much leaning in, so it’s less about now, Hey, do I have this global partner or do I have a startup? Yeah, that’s what I was getting at. It’s more like, Hey, is the opportunity, is it the right opportunity? Dive into yes. Is it the right opportunity? And we bring, that’s great. The machinery. [00:12:26] Vince Menzione: Well, at our next event, I’m gonna dive in even deeper on this conversation with you. Yes. This is a big one, pat. I’d love to hear your vision. Nvidia is in a juggernaut right now in this industry. Uh, fastest growth of any company, uh, in my lifetime. Uh, we used to talk about compact getting to a billion dollars back in the day. I mean, NVIDIA’s market share and market cap has just been astounding. Uh, we talk about the infrastructure build out, uh, we talk about the, the commitments that are made around cloud. And really AI is being driven from your organization. You really are the leader in driving the technology, and I’d love to get your idea and vision on how you’re thinking about it working with Microsoft. And how and how you’re doubling down and leaning in. [00:13:09] Pat Lee: So from First principles, NVIDIA’s a full stack software and computing company. [00:13:13] Vince Menzione: Yeah. [00:13:13] Pat Lee: Everybody thinks about us as just providing GPUs. It’s not that. Yeah. We provide the full infrastructure and software stack required to make AI successful and we have partners that take various layers of it and what they need to make their business successful. But that requires partnership. Um, so for EX, and we have a deep partnership with Microsoft and how we work together to provide. The best infrastructure possible for AI to meet the needs of their own apps, their partners apps, and the apps that all of you’re gonna help your customers build. It’s not one thing, it’s all of them, right? And I think what we need to do is make sure that we help provide the necessary platforms that can be used at all three levels. Because what Azure OpenAI needs is very different than what a leading ISV needs. It’s very different than what a GSI needs to deliver a solution to a customer. So we’re really trying to make sure we provide the right hardware and software at the right levels to enable people to be successful across the board. And by doing that, it allows us to help Microsoft be more successful. Great quarter for, uh, Microsoft This last quarter. Yeah. Congratulations. Just watching acceleration growth. I mean, we’re excited to see that because it means more and more people are taking advantage of the power of AI and that is us. If our number one goal for Nvidia is like, I want every enterprise to have AI embedded in their solution. Yeah. That’s it. That’s our vision. AI in every application, that’s what we wanna see [00:14:38] Vince Menzione: moment. Yeah. I, I think we’re seeing it. I, you know, it’s funny because we had this conversation a couple years ago. It was like, it’s not happening fast enough. And I, again, I come back to the Bill g comment, right. ’cause we expect too much too soon. Mm-hmm. We’re getting there in incredible ways. The, the technology is taking off in some, so much more deep and intangible ways right now. [00:14:57] Pat Lee: And as you see with some of these companies, like is v so a number of ISVs in the room here are partners of our ServiceNow. Cohesity. Yeah. Um, we’ve done work, work with help them innovate to help bring their AI into their platforms. Right. If you look at some of their own comments about AI and how it’s growing, it’s a, it’s amazing to see how it’s grown and just the amount of time they’re able to first get into market with a basic solution. And how the technology’s just growing every day. This is not slow. This is not the old days of adding a feature every 18 months, every, every month. Something’s changing, evolving, and people are looking to adopt it. And how do they really bring that power of AI to their customers? Mm-hmm. And then more importantly, figure out in what way Some companies are monetizing it through upsell. Some companies are baking into their base product to drive more people onto a cloud computing model. Everybody’s trying to figure out the business model that makes the most sense for them. What is the metric that’s gonna allow them to be successful? Yeah. And driving the investment for AI to lead to the outcomes they care about. [00:15:57] Vince Menzione: How does your team layer in support for Microsoft then? You know, ’cause you talked about three different areas of growth or growth opportunities working with these partners. Is there a level of specificity working with the Microsoft teams on on, I mean, [00:16:10] Pat Lee: Microsoft’s a strategic partner. Yeah. We have a deep dedicated team focused on, yeah. Delivering what we need at each level at these things. That includes everything from the infrastructure build out across the board to, you know, help helping Microsoft optimize internal applications that were then delivered on the cloud to then now, I mean, we look at that, one of the things that we’re excited about Nvidia from the software perspective. That we’re part of, um, Azure AI Foundry, um, and we have a rich software stack that’s embedded in Azure AI Foundry that can be bought through the marketplace. Very nice to deliver high performance models that can be used to help build applications for your customers and delivered NVIDIA’s pride and joy is delivering the best performance ever. Um, for example, we can deliver LAMA 2.8 times faster than the base solution in Azure AI Foundry. Wow. By leveraging our marketplace solution. It stays in the AI foundry ecosystem, and you can take advantage of that to build out applications to deliver. The best solution for your customers? Yeah. Vince, [00:17:09] Sandy Gupta: just, you know, we, I, my team manages Nvidia as a software partner. I see. Very interesting. Why customer, that’s a different approach. Yes. Which is a very different approach, approach to kind approach [00:17:18] Vince Menzione: frame what Pat is saying. So you’re helping to forge some of these partnerships, uh, from Foundry over to some of these other ISVs that are gonna be building out solutions, ag Gen. I wanna dive in on AG Agentic, ’cause I think this has been a huge topic area. Yeah. It seems to be the area of most growth right now. [00:17:34] Sandy Gupta: Yeah. I mean like if you look at it. The taxonomy of it is like if you have a copilot, it’s specific to a role that’s helping the human. It’s like a AI assistant. Yes. And then if you look at AgTech, it’s about, hey, it’s, uh, it’s headless. It’s specific to a task, and the idea of architecture is make it as narrow to a task as possible. So for a complex task, you can reuse a lot of different agents and, and all of that. I mean, I’d love to like even say, Hey, how many people here use teams? That’s pretty much everyone. Yeah. How many people have added an agent to teams? It’s like 10%. How many people have created an agent in a team? It’s actually impressed. There is actually more than I expected. Four or five. Yeah. Look, it’s uh, this space is moving so fast and it’s like I was talking to the Pearson guys. The fastest training that’s happening is people who are learning how to develop agents mm-hmm. Who are non-technical. Yeah. [00:18:36] Sandy Gupta: And if you look out to teams, and for those who have not done that, it is super easy to go and, and teams and co-pilot studios just. One framework. There’s just so many low-code, no-code frameworks out there, but it’s incredibly sort of, the pace is moving. But I wanna bring back to like, hey, how is it being used and how is it being consumed? So I wanna go back to what Nicole was saying. This, this morning is kind of the frame and Judson talked about it, uh, last week. I don’t know if those who heard in his AI. L uh, tour in London. Yeah. Said, Hey, like there’s a four big pillars of how AI is being consumed. One is how we are using for employee experience, and that is a lot of things like, for example, M 365 co-pilot for knowledge workers, but there are a lot of fine tuned co-pilots in the market for different types of audience. And he was talking about, hey, how, um, 65,000 of his sellers are now using them. And the top quartile of that has kind of seen, like, he’s seeing like a close rate go up 23% and per head revenue’s gone nine 9%, which should multiply by 65. It’s, it’s a, it’s a good number. Uh, so we are seeing a lot of that sort of adoption in the enterprise today on, hey, just employ productivity. Productivity is incredible. Uh, there is a big pivot that is, we have seen a scale is like the customer engagement. And, uh, we talk about like our own engagement. Like we have like 15,000 support people, about 25,000 vendors. And, and Judson pulled like about half a billion dollar cost out. Wow. And the customer experience has gone up in terms of the feedback we are getting because it’s all now the triage is done through a Gentech framework and they, and the triage decides, the agent decides whether it’s, it’s time to go to a copilot with a human or. Pass it to an agent to, to be able to, because they know the, the customer really well. But then I think the two big areas it’s emerging now is the third is like really around the business process automation. I was just talking to a big hedge fund yesterday in Orlando and they were saying, Hey, we’ve got one of the most successful hedge funds. And they were like. We have like 400 business processes that we have identified to really kind of automate over time, but there’s like five that we really are going to really hit is gonna be the biggest, uh, impact for us, and they’re very focused on that. I think like that thing is kind of, I mean, imagine like EIF tomorrow got automated. Yes. I mean this whole entire room will be full of joy and, and uh, and, and the employee no more [00:21:17] Vince Menzione: whiteboards with, uh, calculations on them. Uh, our MDF [00:21:21] Sandy Gupta: here, like, oh my gosh. And the Microsoft employees will play golf every day. Right. If that can happen, no matter what role you are in, you get sucked. EFI is like our investment funds and stuff. So it’s like a business process that nobody knows how it works. Yeah. Uh, and then like, uh, you look at like, but the last thing I wanna say is he, she talked about bending the innovation. Yes. I think it’s the products that are coming in the market now. Like if you look at Siemens, I was in Hanover a few weeks back and Siemens published with us, like a co-innovate, like a industry foundation model. Mm-hmm. Essentially putting all the modalities of engineering and manufacturing in GPT-4. And other models and all, and being able to consume that through hundreds of copilots that the ecosystem can develop. I mean, can you imagine Siemens, like company becoming a software company? Yes. Bringing their really core value to the market through a fine tune, you know, industry specific model. So, so I think there is this way how things are sort of. Like what are the dimensions? But then when you look at, Hey, how’s it been consumed? How the co-pilots and Gentech has been consumed by enterprises in these four dimensions. I would say co-pilot is the best way for diffusion in the enterprise where everyone can touch and feel ai, whatever their role is. And, and most of this, it is no more longer a debate. Everybody has a copilot now, right? For the role, uh, NISV has for their specific role, whether it’s manufacturing, healthcare, et cetera. And then the things that differentiate you. That’s where it’s really about working on, Hey, do I do, I buy and build? And, and that’s where this whole age agent framework is coming to life, which, which can go in more details here. [00:23:08] Pat Lee: And I think with age agentic, it’s very interesting, right? Yeah. I think. A lot of companies are trying to say they’ve got the perfect agent solution, but the challenge you all know is nobody has a single system of record. They’re running their business ons. So what happens when you have systems of record from different vendors? That’s where the fund’s gonna come into play with agent ai, totally and X. One of the things that we’re working with Microsoft on and how do we help agent interoperability standards. So when you want to go, I wanna write an agent in Salesforce and I wanna write one in Microsoft, I wanna write one in ServiceNow. How can you tie them all together? Yeah. In a way to go back to that question, what business process do we need to solve? Because That’s right. It’s never in one app. Totally. Your business process runs across all these different apps. Yeah. [00:23:52] Pat Lee: So the best thing we can do, I mean, one of the things that we’ve talked about internally is like instead of having to learn complex APIs from each different application, you’re gonna be able to speak natural language. To a set of agents and you’ll have [00:24:05] Sandy Gupta: context. [00:24:06] Pat Lee: Then you’ll have context on intention. Intention and, and there’ll be a reasoning agent there. I know this is geeky techy, but you’ll be able to ask questions and it’ll go off and spin up different agents that can talk to different languages and do it all and bring it all together for you across applications. Yeah. [00:24:20] Pat Lee: That’s the power of a agentic ai and this isn’t science fiction. This is, this is happening, and like you’re gonna see more and more over the next 18 months. You’re gonna see this growth and it’s a huge business opportunity because. People who are resellers or system providers, your customers are gonna want it. That’s right. They don’t want end up paying for 12 different applications. They want a single way to solve the problem. Even if they have to pay for them, they don’t want have to interact with ’em 12 different ways. Totally. So how do we help them do That’s right. Yeah. [00:24:47] Vince Menzione: And we’ve been talking about tectonic shifts for years now, but now it’s really accelerating, right? Yeah. And AgTech AI is really, so what are the, the milestones along the way? ’cause we’re gonna be here sitting down from here a year from now, having very different conversations than we’re having right now. What do you see? [00:25:03] Sandy Gupta: Well, I mean, just to bring this to life, if you have a phone, you probably, I have an iPhone where I use 300 applications, right? Yeah. What if you contact switch from one to the other? What if you don’t need to do a contact switch and essentially go, they go to one another? You can, yeah. And, and you have an open table. Agent that goes and reserves the dinner for you and your wife. And That’s right. Without, as long as you have the intention, without having to go from hey, weather application to this. And if you think about that system of intelligence that Pat just talked about, which is no longer this passive APIs, but it’s a system of intelligence that is talking to all these different, uh, different siloed, um, system of records that is a whole emerging sort of ecosystem right now. Say a couple of things, Vince, uh, that’s emerging in the ecosystem that we worth talking about. Yes. You know, we are seeing a lot of convergence of ISVs and sis very [00:26:03] Vince Menzione: interesting to see this. [00:26:04] Sandy Gupta: And, and, and I, as I talk to customers, they say, Hey, um, would love to work with these ISVs, but I need them handhold me. And I’ve been giving that feedback to the ISVs, Hey, it’s not enough to just have build a software right? On the other hand, the sis are having the same thing. It’s like you cannot, because you know for us, we are going and saying, here are the use cases in your industry, in your domain, and you can either build yourself or with the SI or you can buy and configure. And both of them require, there is a convergence of like what your capabilities are as a partner. Even for consulting partners, I, you know, starting to get the feedback from our customers is that, hey, I love the change management because it’s super critical because we asked the, we have put the business process and nobody’s using them, but the change management has to be in the workflow. Not just an outside training, like how do you insert the change management right in the workflow, what you’re trying to do when you’re trying to do, so, it actually leads you there then doing it. So, [00:27:15] Vince Menzione: so we’re gonna see a convergence of ISVs and sis. Then it has to, it has to happen in order to have the velocity that you need to have for these businesses. Totally. Yeah. Yeah. That’s a, that’s fascinating. What else are you seeing, pat, on your side? [00:27:28] Pat Lee: I, I think it’s the, it’s, it’s the accelerated growth of ISVs adopting this technology. Some, the, the early ones are getting farther ahead. Yeah. And, but the good news is the technology’s evolving so quickly. It’s time to catch up and it’s not as hard to catch up today. You started two years ago on this journey. It was gonna take you a year to figure it out. Now you can start and have something to market in three months. The opportunity is just there. ’cause the tooling, the technology. Is better. I know you’ve [00:27:54] Vince Menzione: talked about healthcare. Is that one of the areas we’re seeing the most Emergence of health. Healthcare [00:27:58] Pat Lee: is a great opportunity because you know we talk a lot about large language models. [00:28:02] Vince Menzione: Yeah. [00:28:02] Pat Lee: Those are not the only models out there. [00:28:04] Vince Menzione: Yes. [00:28:04] Pat Lee: Large language models are one component of all the models we have. We have a whole division in Nvidia focused on healthcare and by biological models that can be delivered. Bio nimo is actually gonna be coming to Azure AI Foundry. Wow. So you could do drug discovery inside Azure AI Foundry. That’s amazing. Kick off the model there and have it tie into the rest of your business system. So there’s lots of opportunities. More and more models are gonna have across various businesses, whether it’s financial services, whether it’s healthcare, um, and security’s a big area. You’re seeing lots of growth in terms of agentic frameworks, just because the complexity of just providing the security needed in this very rapidly moving world. Is really critical. [00:28:44] Sandy Gupta: Absolutely. I would say cyber and with all this agent, I mean imagine like a, a company with 500 SMB, 500 people with 5,000 agents. Yeah. That’s gonna be the reality and the security, the pri like about governance of all of that entitlements of like which agent can do what. It’s gonna be a, where I think massive opportunity. [00:29:05] Pat Lee: It’s interesting about agents. In some ways HR is gonna be it. [00:29:10] Sandy Gupta: Yeah. [00:29:11] Pat Lee: HR is gonna be in charge of agents. In some ways it is like I take over that IT it’s like it’s building new things out. It’s a very fascinating place. Everything [00:29:18] Vince Menzione: you’ve talked about today has been about outcomes too. I think about healthcare being 19% of gross domestic product in the United States, right. As a, as a, as a recent victim of it, and just, I’m thinking about security. I’m thinking about financial. You start layering in these incredible components of our, of our models today. The outcomes that you’re gonna drive is the derivatives are gonna be so valuable, the creation that’s created. Yeah. So we’re going into, you know, we’re going into Microsoft’s fiscal 26. Yeah. What, what are the things we need to, with this amazing partner organization, these ultimate partners in the room, how do we need to think, what final advice would you give to them? [00:29:52] Sandy Gupta: Look, I, I’ll start is one is, uh, I would say don’t stay back from ai. Just like, really skill yourself. I mean, just get into, build an agent today, just tonight. Just build an agent and, and it’s not that hard. Don’t let the geeks. Frighten you. It’s, it’s actually more easy than you think. Yeah. [00:30:12] Sandy Gupta: And, and it’s helping me. I, I built an agent just to improve my English writing. Very nice. So it’s helping me. Every time I write something, it corrects me. Uh, second is, um, the time has come how the ISVs and the channel partners kind of come together. We talked a lot about in the marketplace session and. We really need, want to go deep into that because if you look at the mid-market and SMB, they’re not gonna consume AI by building it themselves, the solution themselves. And, and I think the market, the time has come now for the, for these partnerships to come together. And, and the P two P and third is, um. I’ll just leave it that we’re gonna have a massive focus on migration next year. Yeah. And, uh, and I wanna make sure that everyone here is part of that, uh, huge opportunity sort of opportunity. Huge opportunity. It lends every type of partner in that. Uh, but most importantly, thank you everyone for being the, being our partner and, and amazing ecosystem and Vince, amazing platform. Thank you so much. Yeah. I, [00:31:18] Pat Lee: I think now is the time. This is not, there’s not a time to wait. Um, and there’s all sorts of ways to get started. You can get started as simply as an agent there, but I think one thing that every business that you work with and support has a mound of business critical data that they need to maximize, to get value out of, to put it, to make their customers get value out of. And if we’re not helping them get there. They’re gonna lose business. Yeah. Other people are gonna come in and take that business. If you can’t maximize the value in these applications, they’ll be replaced. Yeah. So if we don’t make AI the prominent and most important feature of these applications, they won’t be able to keep up. [00:31:58] Vince Menzione: I hear you loud and clear. I hope everybody else hears this loud and clear. ’cause it is important. I think there was a sense of hesitancy in the beginning. Like there was this feedback that was coming from CFOs saying, we’re not seeing the value yet in ai. This was in the beginning. Mm-hmm. [00:32:13] Vince Menzione: And I do think like organizations need to hit the gas pretty hard right now is the impression. And they [00:32:18] Sandy Gupta: don’t need to build everything today. Right. Like I think that’s the key thing is like, and there’s something they should build. So, [00:32:24] Pat Lee: yeah, they, they should build what’s right for their business. What, yeah. Like as I said earlier in SA platform play. Yeah. Yeah. If I look at number of the partners I talked about like earlier, we’re providing the platform. Yeah. [00:32:33] Pat Lee: They’re bringing their business value on top of it. Yeah. And then they’re getting the value out of it. That’s that, that’s the thing. It’s like you don’t have to build all this. There’s a lot of foundation you can build on top of. [00:32:43] Vince Menzione: Fascinating conversation. I want to thank you both, incredible leaders on stage. I hope you all valued as much as I did Sandy, so great to see you again my friend. [00:32:51] Sandy Gupta: I learned so much from you. Every time once we talk, I learned a lot from from you. Thank you, pat. [00:32:56] Vince Menzione: So great to have you join us. Having the video up on stage at our Ultimate Partner event has been of great value for us as well. Pat, thank you so much. Thank you very much, so much for joining us. You’ve both been incredible and I hope you’re staying around for a little while. Yeah, yeah, I will. Uh, there everyone, I’m sure wants to spend time with both of you. Yeah. Absolutely. So I want to thank you so much for joining us at, at our event this year. I will see you at the, at the dinner. Yes. We’re gonna, we’ll see you up on, we’re gonna have a great meal together. Much Thank you much so much. Thank you so Pat, much Pat, so much. Thank you so much. Thanks for tuning into this episode of Ultimate Eye to Partnering. We’re bringing these episodes to you to help you level up your strategy. 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Cyril Belikoff at Ultimate Partner LIVE in Redmond, WA Unlock the secrets to explosive growth in the digital landscape!  Subscribe to our Newsletter: https://theultimatepartner.com/ebook-subscribe/ Check Out UPX: https://theultimatepartner.com/experience/ Is your business ready for 2026? Welcome back to the Ultimate Guide to Partnering® Podcast. I’m excited to bring you even more from the Ultimate Guide to Partnering®—and this one’s straight from the main stage at Ultimate Partner LIVE at Microsoft’s Conference Center in Redmond. If you haven’t been in the room yet, these events are something special. The energy, the insights, the access—it’s where strategy meets execution, and the partner community comes alive. In this episode, we feature a powerful session with Cyril Belikoff, Microsoft’s new leader for Marketplace, who joined us to share his bold vision for the future. Cyril dives into: The “lightbulb moment” around AI and why it changes everything How Microsoft is mainstreaming the Marketplace as a core GTM motion What partners need to know about incentives, MCAPS priorities, and the rise of multi-party offers And how the shift to AI and ecosystem selling is redefining what success looks like in this era We’re curating the very best of these moments—fireside chats, expert panels, and executive insights—so you can stay ahead of the curve and fully aligned to where Microsoft and the industry are heading. And this is just the beginning.More sessions. More voices. More of what you need to know. If you’re not yet part of the UPX Community, now’s the time to join us. Access exclusive content, events, and strategies that keep you in front of what’s next. Thanks for being on this journey with us.— Vince https://youtu.be/yIfT1HZriGQ?si=yq_hIvNSp1pvrWtS Key Takeaways: AI adoption is creating exponential opportunities for partners, with leading customers seeing 10x ROI in just over a year. Microsoft’s marketplace is centralizing digital transactions, incentivizing co-selling, and simplifying procurement for customers. Microsoft prioritizes its partners, offering the highest compensation among hyperscalers and integrating marketplace deeply into its products. The multi-party offer (MPO) capability is driving significant sales growth, enabling partners to collaborate effectively and increase deal sizes. Microsoft emphasizes a channel-led approach, empowering partners to scale and leverage the marketplace for software and application sales. Microsoft views the current AI landscape as a “light bulb moment,” urging partners to innovate and build solutions within its ecosystem. If you’re ready to lead through change, elevate your business, and achieve extraordinary outcomes through the power of partnership—this is your community. At Ultimate Partner® we want leaders like you to join us in the Ultimate Partner Experience – where transformation begins. https://youtu.be/s33fltuizEo Transcript: Key Tags: Microsoft, Partner Ecosystem, AI, Marketplace, Cyril Belikoff, AI Adoption, Digital Transformation, Cloud, Azure, Co-sell, Channel Partners, ISVs, Software Development, Multi-Party Offer, Customer ROI, Partner Profitability, Technology, Innovation, Business Strategy, Future of Partnerships, Microsoft Azure, AI Foundry, Trade Ledger, Content Square, Hyperscalers, Managed Services, Data Quality, Ultimate Partner Live, Ultimate Partner Experience, UPX. Transcript: Cyril Belikoff Transcript [00:00:00] Cyril Belikoff: You know, as the AI adoption increases, the opportunity for partners sort of exponentially explode, customers are seeing almost four XROI on average, and then the, the leading customers who are really leading into AI are seeing 10 XROI. They’re seeing that ROI in like 14 months. [00:00:19] Vince Menzione: We believe this time is like no other. We believe we refer to these as the tectonic shifts, [00:00:25] Intro: all the hyperscalers in the world, if you add them all together. Managed  services will be one and a half times larger [00:00:31] Cyril Belikoff: because it is the customer buying behavior that has created a need for all of us to rethink our models. [00:00:38] Intro: Until we have data quality, the effectiveness of AI cannot be realized and effectiveness of the partnerships cannot be realized. Can you figure out, first, what your purpose is and how Microsoft can support your purpose and how you can support Microsoft purpose? Now we have a partnership. It’s the ultimate partnership. [00:00:58] Vince Menzione: Welcome to The Ultimate Guide to Partnering. I’m Vince Menzi, own your host, and my mission is to help leaders like you achieve your greatest results through successful partnering. We just came off Ultimate Partner Live at Microsoft Redmond Campus, our most powerful event. Yet, over two days, we gathered top leaders to tackle the real shifts shaping our industry. If you weren’t in the room. This episode featuring Cyro Beov, Microsoft’s new leader responsible for marketplaces. Brings you right to the edge of what’s next. Let’s dive in, uh, all up, uh, Cy Beov, I’m so glad to have you join us. So good to have you here today, sir. Thank you. Thank you for joining us. Thanks for having me. I’m I gonna grab a water here. Oh, please do. Yeah. I’m gonna grab a coffee. In fact, you uh, you were, you’re second next to me here. Great. Perfect. We put you in the center. The hot seat. In the hot seat. Yeah. So, so great to see you. Yeah. Um. Yeah, we were, I was sharing this with, with the audience, but you and I were supposed to get together in person. Exactly. [00:02:00] Cyril Belikoff: We had a snowmageddon here. I think, you know, I picked the heck of the time. You get a dusting of snow and Seattle sort of shuts down. [00:02:06] Vince Menzione: You know, I grew up in the Northeast, we get 48 inches of snow overnight, and everybody would continue on. And I was like, oh, what happened? I mean, I was, I literally was at the hotel going, okay, well I was doing all these, uh. These teams calls because I couldn’t get people in the meetings and that kind of thing, so I’m so glad we could. Thank you. Do this in person. Thanks for the [00:02:22] Cyril Belikoff: invite again. [00:02:23] Vince Menzione: Thank you. Thank you so much. See you, all of you. So, uh, I thought we’d talk a little bit of a broader, uh, conversation too, and then we’ll dive in on marketplace. Great. Because I think it’s a greater conversation. Great. I happen to know your organization. Um, Alyssa Taylor has been a podcast guest here, somebody I worked with at Microsoft. Yes. And who’s taken on bigger, bigger, and bigger responsibilities within the organization. Uh, leading. Leading, I would call it cloud Go to market probably is probably the right term. But, uh, talk to me about your organization because. You, you drive a tremendous amount of the energy and effort around Azure and industry Yep. And partners, uh, even before this marketplace changes. Yes. Or happened recently. So tell us a little bit about your background. A long time at Microsoft Over, yes. Over 20 years. [00:03:11] Cyril Belikoff: Yeah. Um, so yeah, I’ve been at Microsoft, I think 27 years. 27, 28, something like that. Right outta [00:03:17] Vince Menzione: college. [00:03:17] Cyril Belikoff: Yeah. Lots of different, pretty much. I, you know, I had, uh. I had three days at, uh, PricewaterhouseCoopers, and then I decided, no, no, Microsoft’s my thing. Um, it’s my move. And so, uh, it sort of paid off, I think. Um, so yeah, I, uh, I’m part of, as you mentioned, uh, the commercial, um, cloud and ai, uh, organization. Yeah. Uh, and my particular remit is around solutions and. Partner marketing to really focus on how we take all our products and take them to market with more of a customer outcome solutions basis. And then obviously, how do we enable our partner ecosystem? And that’s where sort of marketplace sort of has now, um, fit, uh, fit in there. So it’s, it’s, you know, it’s an exciting time for software development companies, system integrators, all types of partners really, particularly around this AI transformation. Yes. And what’s going on? Um, you know. And of course being in the, the AI team, I’d be remits to talk a little bit about that and what it really means for partners. I think Please do, please do, please do. Um, for, you know, this is a massive platform shift, I think everyone is, is is talking about it sort of at the same altitude as cloud or mobile or the internet. I sort of prefer the light bulb analogy. Um, and what I mean by that is, you know, back in many, many years before cloud, um, someone invented the light bulb. Yeah. And it, it really changed. Both the con the, the, the life in the home and in the workplace, productivity, you know, sword. Um, but then people were like, well we, now we need sources for that light bulb, so we need to build infrastructure. Yes. And power and then power stations. And then the power station companies built this power stations and then realized, well, we can actually produce more power. So are there other things we can put in a home in a factory? Um, and then. People started to innovate. And then not only were they light bulbs, but dishwashers and washing machines, that’s, and all these sort of innovations came. And so AI is sort of at the same platform level. Yeah. Um, and we are com commit. We are committed in building out tons of data centers. We’re buying. Endless amounts of incredible amounts, AI chip sets, uh, to put into the infrastructure. We are building a few light bulbs, yes. But we need partners to build dishwashers, washing machines, and innovate, um, uh, across the new opportunities for the customers. And it’s just, it’s an exciting time and that’s where sort of marketplace comes into that. Yeah. Portfolio. [00:05:37] Vince Menzione: Well, and I love the fact that it, you, you’ve taken and embraced it in such a more deliberate way. Right? Because when we first started thinking about it, cloud, you mentioned cloud really changed things in a big way, uh, because it, it opened up opportunities and AI of course became that. Yeah. Um. So, you know, marketplace, it felt like it was on an island in many respects. And not, this is not diminishing or just, it was just, I think it just kind of grew up on its own and it was, it was tied into a product team and just now seeing the evolution of where we’re going with this and how it’s more cohesive into this whole cloud go to market. I’d love to get your. Uh, perspective on what is changing and how it’s going to enhance things for, for the partners in the room today. [00:06:20] Cyril Belikoff: Yeah, so if we connect back to AI and, uh, and even back to our history, we’ve always been a partner first company and, and like when we started the marketplace, you’re right, we had to incubate it, we had to build it at many years back now. Um, and we needed to mainstream it into the core business so that it can be part of our product strategy and we’ve. Our products are, you know, we’ve always wanted to be great partners for partners, um, and with our core products. And so marketplace should be no different. And you know, for marketplaces has both the sort of supply and demand side. So we have our classic customers, but then our partners need to. You know, provide supply into the marketplace. And so we want to be awesome partners for those software development companies. Give them a great stack to build on. Um, allow them to innovate and differentiate with ai. Help them to, you know, have amazing productivity with their own developers with things like GitHub copilot. Yep. And then to leverage our own footprint to grow with our sellers. Exactly. With our, with our products and sort of the broad distribution that we have. And so marketplace becomes the center of that. It does becomes the core of how we go to market faster, sell more, uh, and we are investing on the demand side to get customers more to marketplace, right? And so we’ve doubled our marketplace revenue just in this last year. Um, of course. Now much more money is made by partners. Yeah. Through that revenue. Um, and, uh, we have aspirations and on the path that this is the store to buy your AI solutions. Yes. With Microsoft as the platform and then partners providing whether it’s software as a service or agents, and it’s fast becoming that. So we are seeing, even on ai, we’re seeing a hundred, 200% growth on ai, particularly in our marketplace. That’s outstanding. Lots of momentum. You’re right. We, we sort of had to incubate it like any, excuse me, any good product. You want to incubate it so it doesn’t get caught up in. Sort of the requirements of the machine. [00:08:17] Vince Menzione: Yes. Right? Yes. And [00:08:18] Cyril Belikoff: now, now it’s time to mainstream and we want to go really big, as you said. [00:08:21] Vince Menzione: Well, I think what you’re signaling to the audience and to the partners watching today is this, that like Microsoft is doubling down. Right. And I always talk about the seven seats at the table because I’ve always believed, I mean, from the old days, it was like, you know, you get a large GSI in the room and you have one throat to choke, but customers are making and dictating their own decision process, and they’re looking at the seven seats at the table. They’re looking at. They’re looking at data and, uh, AI partners, they’re looking at security and governance partners. They’re looking at maybe systems integrators or managed service providers. They’re bringing it all together. And because they’re buying off of your marketplace, they can do that. They couldn’t do that before. Right, right. And now there’s a new, a new vehicle to get there. So, [00:09:00] Cyril Belikoff: yeah. I, I, I totally agree. I think there’s, um. Lots of opportunity as you talk about the multiple seats at that table. Yeah. And so if you bridge into the connection between a partner and a customer and Microsoft and what that might look like, you know, the marketplace, as I mentioned, is becoming the center for the digital transaction, whether it’s a large customer or small, but also we putting the right levers in place to connect partners with our own sellers. And so if we wanted to be at the center to provide the right solution to the right customer at the right time. We need to make sure that our own sellers have marketplace in their compensation, and we’ve made that change. [00:09:39] Vince Menzione: Nice. Um, so what is the connection point now across Azure Consumer Revenue marketplace? Yeah. And co-sell. So the first is, [00:09:46] Cyril Belikoff: so the first on co-sell is that our sellers are incented to co-sell literally in their compensation plans. Nice. That marketplace can help them retire their quota. Like, it doesn’t matter how much strategery stuff I do in my ivory tower. Yeah. That lever is golden. ’cause sellers follow their back pocket. Fantastic. They’re, we tell them to follow their back pocket. That’s literally how we ask them to, to operate. Um. Then from the customer side, uh, we have this concept called Microsoft Azure Commit to consume or the Mac. Yes, we love our acronyms and so customers will negotiate with their account reps or our executives and they’ll make a commitment to Microsoft for their Azure commitments over a three to five year period, and then they’ll get some sort of discount. Simplistically, I’m just simplifying it. Yes. A hundred percent of the marketplace transactions can retire that customer’s commitment. So if a customer makes a $10 commitment to Microsoft, it’s a little bit more, add some more s zeros. But something like this, say $10 and they’re buying an application through the marketplace and that application cost $2 and Microsoft’s getting, you know, sense and the, the, the software development companies getting much more, uh, percentage wise, they are able to retire them. Full Microsoft commitment on Azure. Uh, based on the full commitment that they’ve bought, bought in the marketplace, including the cost of the, the ISV or software development company application. So we are incenting the seller and we are incenting the customer to get to, to encourage their flywheel to go even faster. And, um, many customers look at that, uh, Azure commitment and that contract as also a procurement, um, accelerator. Yes. So if, uh, software development companies. Have things in the marketplace, the procurement requirement is substantially reduced because. That acquisition has already been approved by the business. Yeah. And as long as there’s a business leader that says, yes, I want you allow, I will allow you to decrement the, the Azure commitment. There’s the procurement side is close to zero in some cases. Now, not all cases, but in many, many customers are going that way. [00:11:55] Vince Menzione: You’ve simplified it, you’ve taken away all the legal language. Correct. You’ve taken away the, the whole, the whole term, the terms, and then worrying about payments. Right. It’s all, it’s all handled now for partners. [00:12:04] Cyril Belikoff: Yeah, and then obviously we incent the seller and then we incent the the customer too. And then lastly, a lot of software driven companies. Sort of on the medium si medium to small size. They love the fact that it’s a global transaction. Yes. They don’t have to deal with taxes across B country boundaries. That’s all handled in the marketplace. And so there’s just so much value to getting scale. Um, I. We’re very excited by, as you can tell. Yes. I’m, I’m, [00:12:28] Vince Menzione: I’m excited with you. I’ve, I’ve talked about this as the marketplace moment, and you know, of course we’re gonna have some of your other leaders up on stage. Right. We’re gonna have Sandy talking, talking with Nvidia and some conversations. We’ll have some of the marketplace vendors that help enable these ISVs or software development companies on how to, how to attract and work with Microsoft. We’ll also have some of the co-selling leaders in the room that will help. How do I, how do I become more relevant with Microsoft? So I’ll have some incredible conversations here. And this all ties in. I, we talked about marketplace, but the Azure consumer revenue number. Um, I think we know that there’s a paradigm between marketplace and channel sales. What’s the advice on how to balance the best of both worlds? This is an interesting conversation I hear all the time. From reseller or channel partners operating in one direction and the marketplace operating in a different direction, or at least that was the past. Yeah, that was the past paradigm. [00:13:19] Cyril Belikoff: Yeah. It’s a, it’s a great question. The first I would say is use it. Give us feedback and we’ll get better. Um, and that’s how we work with our partners. We work for 50 years like that. Um, and so we wanna work for the next 50 years. And so there is no. Either model that we have to crack besides our channel integration with marketplace, it’s just vital. Yeah. Um, we spend a lot of time with Nicole and her team around how we, what we call sort of co-sell at scale and like how do we get scale through our channel without a Microsoft seller involved. That’s right. Um, and so we are, we are thinking deeply about that and, and really working through that. And so it’s really about the channel led sale and how we enable marketplace and transitioning. Um, the classic business where needed to marketplace. Yeah. Now there’s obviously parts of the business that might not be on marketplace, but if you’re selling a software, um, a software application, the marketplace is the right place to do it and then connects to everything that we just discussed on that value that the customer values. Um, and, you know, we want to enable access to the 500,000 partners at scale that rely, uh, on our classic partner, um, engines. On the new marketplace and we, we started to do that. And I guess the, the hero, uh, capability is, uh, multi-party office or NPO. [00:14:43] Vince Menzione: Yeah. [00:14:43] Cyril Belikoff: Um, the ability to do. Multi parties that this a partner with a software company or or app provider and a customer multi-party offer sort of that capability. And we’ve, you know, we’ve, we’ve launched it in select markets, us, uk, Canada, and already we’re seeing sort of a third of our sales with, uh, almost two times the average size. That’s incredible. With that capability, it’s obvious, like we know, like, yes, we had to incubate the business. Now we’ve gotta mainstream, we’ve gotta mainstream into. Our channel partners too. And so while I don’t have tons to share, you can be sure that we are building more capabilities in the future that. Empower more channel led growth and more partner to partner selling. [00:15:26] Vince Menzione: That’s fantastic. It is an incredible engine, the multi-party offer engine. And then some of the early learnings were that it wasn’t always the largest partners in the world. It were, but it was partners that were closest to the customer providing some capability along with the other solutions that were coming along with the multi-party offer. Mm-hmm. So, um, just in, uh, in, so I think, you know, it is an inspiring time for all of us as we, as we think about this, uh. T we were, we’re at the end of 25. 25. You’re leaning in on 26 in a big way. Yeah. I’m, I’m assuming here. Of course. So I do think it would be great for you to give some of the learnings to this group of leaders in the rooms, all the people that are gonna be attending or watching this on livestream. Um, anything you’d like to leave us with going into fiscal year 26 for this group? Yeah. [00:16:13] Cyril Belikoff: And thank you for, again, for the opportunity. So as we close out here, um, you know, as the AI adoption increases. The opportunity for partners sort of exponentially explode. Yeah. Now I use the light bulb naturally, but I’ll give you some numbers right around numbers. Customers are seeing almost four XROI on average, and then the, the leading customers who are really leading into AI are seeing 10 XROI. Wow. And the amazing piece about that is. In addition to it being 10 x is that they’re seeing that ROI in like 14 months. In typical other IT projects, it’s been like two to three years. And you write a business case and the CFO looks at the business case and they have this, you know, risk analysis and it goes three, sometimes five years. They’re seeing ROI in 12 to 14 months. Yeah, that’s fantastic. And um, it’s not surprising ’cause that’s literally the pace of the industry right now and AI is even. Faster than that. And so there’s, there’s customer, real, customer tangible value. In addition to that, for every dollar that Microsoft makes, our system integrated partner makes almost $9 and a software company makes almost $11. So the, the math on the partner side. Is very good too. It’s very good. And so when you just, just think at a high level of that flywheel, okay, the customer is seeing value, there’s opportunity in the partner. Of course we see value, we are investing that flywheel has to move. Yeah. And if you’re on that bus, you’ll get value if you miss the bus. You don’t get value. Like we try to get on a few buses, many across the years. I won’t mention mobile, et cetera, et cetera, but maybe I just did. I, I remember those days I was in this room. Um, we try to get on a few buses. We have not missed this bus, and we are leading this bus and we want, we need our partners, um, because as I said, we, we are building platforms and so, and the [00:17:57] Vince Menzione: compensation for partners is the highest in Microsoft amongst the three hyperscalers if you do the analysis work that I, yeah, we are [00:18:03] Cyril Belikoff: pretty aggressive. Yeah. Uh, in looking after our partners, and again, all different private partners, channel partners, system integrators, software companies. And really, as I said, the marketplace is the connector for it. If you haven’t engaged in the marketplace, get on, take a look, try it, do a few transactions with some customers and then give us feedback and you know, we will continue to evolve it even deep into our products. For example, uh, it’s a good example. So Azure, AI Foundry. So it’s basically our core product for that customers use to implement. AI applications, whether it’s advanced machine learning or generative AI or AI search, pick your thing. It’s, it’s got all the goodness in there. It’s, you know, confidential ai, trustworthy ai, all all the pieces, AI foundry. So customers literally are going to this product. In the product. It has the most models on the planet, like 1800 large language and small language models. Wow. Customers need to transact those models. Yes. So what we’ve done is we’ve connected that core product. And when the customer is trying to implement it says, do you want to transact this? And it, it’s an automatic behind the scenes link to marketplace. So it gives you a mental model on how we think about this is not just gonna be like a classic partner transaction in front of a customer thing. We are going to embed it in our products more and more and more to, to really encourage that flywheel between customers and partners in a really seamless integration way. Um, so many. Great examples. Yeah, I get super passionate about it. I guess I would, um, before I close out, I’ll mention one or two, uh, partners, so please do. Trade Ledger is a good example that I love. Trade ledger, um, end-to-end like lending platform. They literally did their first go go, uh, COSAL deal with a big bank. And the deal that the previous previously negotiated went from 4 million. To 25 million. Unbelievable. And that might not sound lot, a lot to some Microsoft people. Yeah. But for a company like Trade Ledger on one deal, then they can try do it on 5, 10, 20, and a hundred deals. That’s, that’s real return. Um. I guess Content Square is another one. They do insights, analytics. Yeah. And they’re seeing marketplace help them close deals, 11, 12, 13% faster with more than a hundred percent uplift on on their deal value. And so there, as I mentioned, we are integrating into product, we’re driving demand, we’re getting software companies to build, integrating with channel. And so we are, we’re investing deeply. Right. And I guess I would just close out with where I started. We have a light bulb moment. So let’s go build some washing machines, get it onto the marketplace. I love this. And go [00:20:45] Vince Menzione: learn together. I love that. And this is your first time really, I would say, at an event like this with partners in the room. So, so great to have you. Thank you so much. This effort and having you hope, hope to have you on stage many times. Great. Because I think it is a light bulb moment. I think we are just at the beginning, the precipice of this opportunity and really it’s gonna be an exciting time ahead. Perfect. So, so great to have you. Thank you [00:21:06] Cyril Belikoff: so much. Great to appreciate it. Great to have you. Thank you sir. Appreciate you making time for us. Thank you. Yeah, thank you. Thank. [00:21:11] Vince Menzione: Thanks for tuning into this episode of Ultimate Eye to Partnering. We’re bringing these episodes to you to help you level up your strategy. If you haven’t yet, now’s the time to take action and think about joining our community. We created a unique place, UPX or Ultimate Partner Experience Leaders come to learn from each other. It’s more than a community. It’s your competitive edge. With insider insights, real-time education, and direct access to people who are driving the ecosystem forward. UPX helps you get results. And we’re just getting started. We’ve got big plans for you this summer as we’re taking this studio, and we’ll be hosting live stream and digital events here, and it’s all coming to you soon. So visit our website, the ultimate partner.com to learn more and join us. Now’s the time to take your partnerships to the next level. . Key Tags: Microsoft, Partner Ecosystem, AI Transformation, Nicole Deason, Microsoft Partners, Generative AI, Cloud Solution Provider (CSP), MCAPS Priorities, Customer Zero, Skilling, Business Growth, Profitability, SMB, Fiscal Year 2026, Microsoft AI Cloud Partner Program, Innovation, Industry Solutions, Channel Partners, System Integrators, ISVs.

From Ultimate Partner LIVE in Redmond, WA Unlock the secrets to explosive growth in the digital landscape!  Subscribe to our Newsletter: https://theultimatepartner.com/ebook-subscribe/ Check Out UPX: https://theultimatepartner.com/experience/ Is your business ready for 2026? Welcome back to the Ultimate Guide to Partnering® Podcast. This episode is something special. It was originally recorded as the kickoff conversation for our May Ultimate Partner LIVE event—a powerful session that featured none other than Nicole Dezen, Microsoft’s Chief Partner Officer, and a true champion of the ecosystem. Now, we’re bringing it to you, our amazing Ultimate Partner Podcast community. In this candid and insightful conversation, Nicole shares Microsoft’s unwavering commitment to its 500,000+ strong partner ecosystem—especially poignant as the company celebrates its 50th anniversary. We explore how partners are not just part of the Microsoft story—they are the story.From driving innovation to fueling growth in the era of AI, this dialogue makes clear that partners are at the heart of Microsoft’s transformation agenda. You’ll hear about the company’s FY26 strategic priorities—known as MCAPS—including renewed focus and record investment in the SMB segment, and the role of partners in shaping what’s next. https://www.youtube.com/watch?v=3vuEsmcPvD4 Partnerships are Microsoft’s Core: Microsoft’s foundational commitment to its partner ecosystem is deeply ingrained in its 50-year history and remains central to its future strategy. AI is a Partner-Led Opportunity: Partners are crucial to driving AI transformation, with Microsoft actively supporting and incentivizing those who leverage AI for customer solutions and business growth. Substantial Profitability for Partners: The Microsoft ecosystem offers significant financial returns, with partners earning multiple dollars for every dollar of Microsoft revenue, boosted further by generative AI. Strategic Alignment with Microsoft Priorities: Partners can maximize their success by understanding and aligning with Microsoft’s five MCAPS priorities, which guide both Microsoft’s internal sales and partner incentives. Targeted Investments for Ecosystem Growth: Microsoft continues record investments in its partner ecosystem, with a strong focus on empowering partners, especially those serving the high-growth small and medium enterprise (SMB) segment. “Customer Zero” Enhances Partner Credibility: Partners are encouraged to use Microsoft technologies, particularly AI tools, internally (“Customer Zero”) to build authentic experience and credibility for customer engagements. https://youtu.be/s33fltuizEo Transcript: (0:00) So I wanna take this moment to welcome a friend, (0:03) an incredible leader, somebody who leads the largest, (0:09) imagine this, the largest ecosystem in our industry (0:12) is the Microsoft ecosystem, (0:14) with over 500,000 partner organizations. (0:19) Nicole Deason has done an outstanding job (0:22) of taking this organization to the next level. (0:26) In fact, we recognize, Nicole was on my podcast last year, (0:29) we were up here in Redmond, (0:30) we recorded a really great interview. (0:32) If you haven’t had a chance, (0:33) you can find that on our YouTube channel. (0:35) You can find that incredible discussion that we’ve had. (0:38) I’ve asked her back because a lot of things (0:40) are happening at Microsoft. (0:41) And I also wanted to recognize her. (0:43) Like see, we did this Partner Leader of the Year Award (0:46) at the end of 2024, and we recognized Nicole (0:48) for how she’s reshaped Microsoft’s landscape, (0:51) how she’s really tightened up Microsoft’s focus (0:54) and strategy, and I wanted to have her back today, (0:57) A, to recognize her up on stage (0:59) for her outstanding leadership, (1:01) but also have you hear from her (1:03) about her point of view as partners (1:06) and how Microsoft thinks about this ecosystem (1:09) and its approach to support this incredible thing (1:11) that was created over 40 years ago. (1:14) Microsoft was the first company (1:15) to really embrace partnerships, (1:18) and still is at the very forefront of it. (1:20) And so I’m excited to have Nicole join us. (1:23) Nicole and team, but we also have a little something (1:27) we’re gonna bring out here. (1:28) So here comes Nicole. (1:30) Nicole, so good to see you. (1:31) So good to see you. (1:32) Thank you for having me. (1:34) I love having you. (1:34) Thank you so much. (1:35) I love your jacket, too. (1:36) Obviously, I’m really into the green, okay. (1:38) Yeah, I love the green. (1:39) I love the green. (1:40) I need to wear more green. (1:41) We have a little gift for you. (1:44) I try and lift it. (1:45) They told me it weighs about 300 pounds. (1:46) Okay, well, I’ll do it. (1:47) Here, we’ll do it together. (1:48) We’ll do it together. (1:49) So this is just our recognition (1:51) for all the work that you’ve done (1:53) and all the support you’ve given (1:54) these partners in the room, (1:55) and the thousands and thousands of thousands (1:58) that will be watching us, (1:59) listening to your amazing guidance and leadership, (2:03) and so glad that you could spend some time (2:05) with us this morning and kick off our event. (2:07) Thank you. (2:07) This is a really nice honor. (2:09) Thank you so much. (2:10) We’ll proudly put that there. (2:12) You’ve done an incredible job, (2:13) and we’re excited to have you for a little fireside chat. (2:18) We have some people in the room. (2:19) We have a bunch of people on the live stream as well. (2:22) So we got to do this in a studio. (2:24) It’s a little bit different, (2:25) but I wanted to have the opportunity (2:27) to spend some time here with you (2:28) because I think there’s some really incredible things (2:30) we need to talk about here. (2:32) First off, we haven’t even talked about this yet. (2:35) I was saving this for you. (2:37) Microsoft’s 50th anniversary. (2:38) Yeah, so exciting. (2:40) I mean, it is incredible that it’s been 50 years now. (2:43) It’s amazing. (2:44) It’s really hard to believe, (2:47) you know, 50 years of so much heritage. (2:50) And, you know, when I think about our 50 years, (2:52) I think of it as 50 years of partnership. (2:54) So massive, massive thank you to all of our partners. (2:58) Our success is absolutely based (3:02) on all of the work we do with our partners (3:04) and organizations like yours, Vincent. (3:05) Thank you so much. (3:06) Thank you for your support as well. (3:08) We feel that as well, these partners wouldn’t be here. (3:10) We wouldn’t even have this thing called partners (3:12) if it wasn’t for Microsoft. (3:13) You know, we’re incredibly fortunate here. (3:17) The company was founded in this heritage of partnership. (3:21) It’s in our DNA. (3:23) And every single one of our three CEOs (3:26) has proudly focused on partnership. (3:31) And, you know, Satya always says, (3:32) this company has always been (3:34) and will always be a partner-led company. (3:36) It’s pretty exciting. (3:38) You know, when I, if you think about (3:40) where the company started, (3:42) we started with this really bold vision (3:45) that technology could change the world. (3:47) And it certainly has and continues to, you know. (3:52) And I heard your very nice introduction, by the way. (3:55) Thank you. (3:55) You know, Microsoft is so proud (3:57) to have 500,000 partners in our ecosystem. (4:01) It’s remarkable. (4:02) We actually, we grew the size of our partner ecosystem (4:05) 20% year on year in the last year. (4:08) That’s fantastic. (4:08) And there’s a whole bunch of reasons why. (4:11) And, you know, it’s really exciting (4:12) to see the excitement and enthusiasm (4:15) for everything we’re doing. (4:16) And, you know, you and I go way back. (4:19) And it started in this company. (4:21) Well, you know, I’m sorry we were five. (4:22) You were a lot younger than I was. (4:25) But, you know, it started with building (4:28) and selling Windows PCs in the office, (4:32) still going strong today. (4:34) And then we sort of evolved into cloud migrations. (4:37) And then, of course, now it’s all about the era of AI. (4:42) And, you know, our partners are really the backbone (4:45) of AI transformation, solving complex customer challenges (4:49) around the world. (4:51) Microsoft has always been really deeply committed (4:53) to partner success. (4:55) And I love just seeing how amazing it is (5:00) to see our partners thriving in this time. (5:04) We, just last year, we did some IDC research. (5:07) And the research told us that for every $1 (5:09) of Microsoft revenue, our services partners (5:12) earn $8.45. (5:14) Wow, that’s outstanding. (5:15) And our software partners earn $10.93. (5:18) And it’s one of the measures we hold ourselves to. (5:20) It’s really, really important that we can create (5:23) a healthy, thriving, profitable ecosystem for our partners. (5:28) Then you add generative AI on top. (5:30) And, wow, like hockey stick growth in so many dimensions. (5:33) It’s amazing to see just the growth faster (5:37) than the overall IT market, which is amazing. (5:40) Generative AI, fastest platform adoption (5:43) in the history of technology. (5:46) These stats are pretty awesome, if you think about it. (5:49) It took mobile 16 years. (5:52) And then it took the internet seven years (5:54) to reach 100 million users. (5:57) LLMs achieved that in months. (5:59) It’s incredible. (6:00) Right, and we’re just getting started. (6:02) And for me, when I look across our partner ecosystem, (6:06) and I see the demand and opportunity for the work (6:10) that every single one of our partner types is doing, (6:13) it makes me really motivated and excited. (6:16) And then the partners that are betting their business (6:18) on Microsoft AI, those with more than 25% (6:21) of their Microsoft revenue on AI, (6:24) receive higher margins and revenue growth. (6:28) And, you know, I’m just incredibly proud (6:32) to see what we’ve already done in our 50 years. (6:36) And I know so much excitement ahead. (6:38) Just getting started. (6:39) What is it that Bill has always said, right? (6:42) We expect too much in the first year or two. (6:44) We expect rapid growth, but we underestimate (6:47) what we’ll see in 10 years. (6:49) That’s right. (6:49) I think we will underestimate what we see (6:51) in three and four years. (6:52) Oh, absolutely, and I am beyond confident (6:55) that it’s actually our partner ecosystem (6:56) that will lead the way here and teach us all things (6:59) that we never imagined. (7:00) Yeah, it’s going to be an outstanding day (7:02) of conversations around these topics. (7:04) So glad you could join us for this. (7:07) So we’re at the end of 2025, Microsoft 2025. (7:11) People don’t always understand (7:12) the fiscal year differences, right? (7:14) Hey, two months have to go. (7:15) Let’s not forget it’s Q4 at Microsoft. (7:18) Yes, get out there and sell partners. (7:20) We still always get encouraged, that’s right. (7:23) People don’t understand, if you haven’t been (7:24) around Microsoft for a long time, right? (7:26) July 1st is the beginning of a new year. (7:28) Yes. (7:28) And I think it’s a super important time (7:31) to have you here because it is like giving people (7:34) a little bit of a forward glance to what’s happening. (7:37) Like there has been a lot of change, right? (7:38) A lot of change, transformation, (7:40) and I would love for you to share (7:41) with our incredible partner ecosystem (7:44) what you’re seeing and where we’re going. (7:46) I think we’ve definitely accomplished (7:48) more than a year’s worth of stuff (7:50) in the 10 months of this year so far. (7:53) So I’m just incredibly proud and grateful (7:55) for the excellence I see across the ecosystem. (7:59) For Microsoft, it’s been a record year (8:01) of investment in our partner ecosystem (8:03) and I’m thrilled to be able to say that. (8:06) There are several things we’re doing. (8:09) For us, it starts with our five MCAPS priorities. (8:13) Every Microsoft employee sort of has these (8:15) tattooed on their foreheads. (8:16) Yes, right up here. (8:17) And the thing that’s cool is I love it (8:19) when I’m having partner conversations (8:21) and we talk about the work that our partners (8:24) are doing across the five priorities. (8:26) So they’re co-pilot on every device, (8:29) AI design wins, securing cyber foundations (8:32) for every customer’s, delivering the M365 core, (8:37) and of course, cloud migrations (8:39) because customers can’t take advantage (8:40) of all of this amazing AI goodness (8:42) until they’re in the cloud. (8:45) There’s a few reasons why understanding (8:48) these priorities I think is so beneficial (8:50) to our partners. (8:51) Number one, understanding how Microsoft sells, (8:55) how we coach our own sellers, (8:56) I think is incredibly valuable (8:58) because it allows us to go to market together in harmony. (9:03) Excuse me, the second thing is we pooled (9:06) our partner incentives around those five priorities. (9:09) So there’s real economic benefit (9:12) for every partner out there to get after them. (9:15) So important. (9:16) Yeah, and the thing that I’m really excited about (9:18) is these priorities apply to every customer segment, (9:23) every partner type. (9:24) So whether you’re an SI, an ISV, a channel partner, (9:27) a device partner, you name it, (9:29) there’s a role for you to play in these priorities. (9:32) And this is really about how we support your work (9:35) as you deliver value to our customers. (9:38) The next thing is, you’ll hear us talk a lot (9:42) about customer zero, and Vince, (9:44) you’ll remember the days where we talked dog food, (9:46) which I just saw. (9:47) I’m so glad we got rid of dog food. (9:49) We’re so over that. (9:50) Then we were drinking our own champagne, (9:52) but now we’re in the era of customer zero. (9:55) Customer zero really means that we use our own things first. (10:00) And Microsoft has always had this principle of doing it, (10:03) but it’s actually more important than ever with AI. (10:08) And where I’m seeing the most growth, (10:11) the most rapid transformation in our partner ecosystem (10:16) is those partners that are utilizing this technology (10:19) in their own business, (10:20) because that’s when you have the most credible examples, (10:24) the most authentic experiences (10:26) to go have those customer conversations. (10:28) Customers are counting on you (10:30) to help them understand what to do in their business, (10:33) and they’re looking for you to tell them how you’ve done it. (10:36) And when we talk about AI transformation at Microsoft, (10:40) we talk about it in terms of enriching employee experiences, (10:46) reinventing customer engagement, (10:48) reshaping business processes, (10:50) and then bending the curve on innovation. (10:52) And there’s just- (10:53) Oh, I love bending the curve. (10:55) Bending the curve, yeah. (10:56) We love to bend the curve around here. (10:59) You know, it’s really amazing to see (11:02) what each part of our partner ecosystem is doing. (11:05) It’s actually been less than 12 months (11:08) since we launched Copilot Plus PCs, (11:11) you know, near and dear to my heart. (11:14) It’s amazing to see what our device ecosystem is doing (11:17) with the most powerful NPUs in the market, (11:20) you know, provided by our largest silicon partners. (11:23) Our ISV ecosystem, you know, (11:25) this is a place where there’s just, (11:28) we’re just fueling innovation in the market. (11:31) And the things I love the most (11:32) are when I see these solutions come out (11:35) from ISVs around the world (11:38) that are just helping customers solve real problems. (11:43) There’s a really cool example recently from Sitecore. (11:46) They introduced some capability (11:49) that helps marketers pre-test content (11:54) before they publish it. (11:55) It sounds so obvious, right? (11:56) But they didn’t have that capability (11:59) until Sitecore introduced it, (12:01) and it’s running on Azure and Azure Open AI. (12:04) And so I love it when it solves (12:06) really real-world problems for people. (12:09) You know, our systems integrators (12:11) are really leading the way, (12:12) particularly around industry solutions. (12:15) It’s been really impressive to see (12:17) the way that system integrators have paired (12:19) our customer solution areas with AI capability (12:22) across industries, delivering real value. (12:25) And then, last but certainly not least, (12:27) our channel partners. (12:29) You know, the channel is really the face of Microsoft (12:32) in so many cases for the small (12:34) and medium enterprise customer. (12:37) And I’m really, really proud to see (12:39) the way the channel has embraced, (12:41) you know, supporting the entire lifecycle, (12:44) or we like to say all five MSEM stages. (12:47) There’s so much TAM to be captured here. (12:51) $661 billion of TAM (12:53) in the small and medium enterprise segment. (12:56) So welcome, one and all. (12:58) There’s lots to do here. (13:00) And you know, this is a place (13:02) where we are heavily, heavily investing (13:05) in these partners for growth. (13:07) 70% of our investments are pooled toward the partners (13:11) that service the small and medium enterprise segment. (13:14) So it’s an opportunity. (13:14) And we’ll hear from some of your leadership (13:16) on how to best engage with sellers, (13:19) as partners working with sellers in those organizations. (13:22) We’re also gonna hear from the SMB market as well. (13:24) We’ve got both Pax8 and Ingram Micro (13:26) coming on stage here over the next two days. (13:28) What an incredible opportunity now, right, (13:30) to take some of the modernization and marketplace (13:34) and extend it out and be much more deliberate (13:37) with smaller customers. (13:38) Yes, yeah. (13:39) The SMB space in particular is a segment (13:44) with so much growth opportunity (13:45) and so much dependence on very strong, capable partners. (13:51) Yeah, so it’s an incredible, incredible opportunity. (13:53) You’re gonna hear things on stage here. (13:55) They’re gonna hear some more from what you’re sharing, (13:56) but also from some of your leaders (13:58) that are gonna share some more. (13:59) There’s gonna be some very insightful (14:01) and provocative conversations the next two days. (14:04) So let’s talk about 2026. (14:06) So people are like, happy new year. (14:07) Like July 1st is just around the corner. (14:09) So I know you have been incredibly busy. (14:12) I know what this time of year is like, a lot of change. (14:16) Let’s observe what happened in the year so far. (14:18) Let’s address what’s not working right. (14:21) Let’s pivot to what’s working even better. (14:23) And then you’re laying it out, right, (14:25) in the next couple months. (14:26) I’m excited for what you’re gonna be providing. (14:28) These partners need to listen in to you (14:30) on what’s happening. (14:31) Yeah, we’ve been hard at work for planning, (14:34) and you nailed exactly how we do it, by the way. (14:36) That’s awesome. (14:37) I’m really excited about what we’re doing. (14:39) I would start with what isn’t changing, (14:42) because I think that’s really important. (14:44) Our five priorities are enduring. (14:48) We’ve seen really great momentum (14:50) from our partner ecosystem. (14:53) The partners that have embraced these (14:55) are making meaningful progress with customers (14:57) and we just wanna continue to fuel that. (15:01) We will continue significant AI investment, (15:05) and we will do all of this (15:07) through the Microsoft AI Cloud Partner Program. (15:09) And this is where any partner can get the technology, (15:13) the tools, all of the capability (15:15) to build healthy, profitable businesses (15:17) where we co-sell together. (15:20) And so I think that it’s super important (15:22) for partners to understand that. (15:23) I am also going to encourage everyone (15:26) to plan to attend MCAP Start for Partners. (15:29) That’ll be on July 15th, so two weeks into our fiscal year. (15:34) We do this readiness event. (15:36) At the same time, we’re readying all of our sellers. (15:39) So partners get access to the exact same information (15:42) that Microsoft’s entire field sales force gets, (15:45) and it’s all about ensuring that you have access (15:47) to the latest and greatest, (15:49) all the goodies in our toolkit for next year. (15:53) And that’s gonna be digitally available. (15:55) So everybody in the 500,000 can all embrace (15:59) and this change is happening. (16:00) And we will not be shy about letting everybody know (16:03) when registration opens. (16:04) That’s coming soon. (16:05) And one more thing. (16:07) I know everybody’s busy here today, (16:09) but we did publish a blog today, this morning, (16:12) with a lot of new CSP announcements. (16:14) Yes, please share that. (16:15) So don’t distract yourselves from today’s amazing agenda, (16:19) but maybe when you go back to your hotel rooms, (16:21) check out the blog. (16:23) Because we’ve announced a ton of new capability (16:26) for the CSP partners, the Cloud Solution Provider partners. (16:31) There are a couple things I’ll share here. (16:33) Number one, probably the most requested thing (16:36) from every partner and frankly, every employee at Microsoft (16:40) is today we’ve announced we’re introducing (16:42) three-year CSP SKUs for M365 and Teams Enterprise. (16:47) I’m really, really thrilled about this. (16:49) We’ll have some nice promotions to support it as well. (16:52) And the other thing that we’ve been really hard at work on (16:56) is enhancing CSP capability with systems and tools, (17:01) reporting, enabling better upgrades, upsell, renewals. (17:06) As you would imagine, all of this is infused with AI. (17:10) All designed to make sure that we have a healthy, (17:13) profitable, thriving ecosystem. (17:16) We’re also updating some of our authorization requirements. (17:19) We’ll align our incentives to all of that. (17:22) There’s tons of information in the blog, (17:24) so I encourage everyone to go check it out. (17:27) And really, this is all designed to ensure (17:29) that our partners can deliver great success (17:32) to our customers. (17:33) I know your team has been hard at work on this (17:35) and so you have some incredible leaders been driving. (17:38) The system and tools component alone is really enhanced (17:41) and been enriched over the last couple of years. (17:44) Yes. (17:44) Great teams work there. (17:46) Lots of AI capability there. (17:48) We have to be our own customer zero, right? (17:51) Absolutely, yes. (17:52) I love it, I love it. (17:54) So what advice do you have for these partners? (17:56) Obviously the CSP reading all of that, (17:58) what advice do you have for them in terms of leading in? (18:01) We obviously talked about the co-selling, (18:04) the ability to engage, understanding the priorities (18:07) at the SEMCAPS event. (18:09) Anything else in particular we should be aware of (18:11) and lean in on? (18:13) Yeah, you know I like threes, (18:15) so I’ll go with three things. (18:17) Yes, please. (18:18) First of all, I really encourage partners (18:21) to continue to take advantage of all of the skilling (18:24) we’re pumping out into the market. (18:26) Record year of skilling investments this fiscal year (18:30) for really, really good reason. (18:33) I don’t know about you, (18:34) but I feel like the rapid pace of advancement (18:37) of the technology is challenging each of us (18:40) to really stay current. (18:41) Exactly. (18:42) And so, you know, please take advantage of the skilling. (18:46) The partners that leverage our skilling the best (18:48) are also the ones that have earned designations, (18:51) earned specializations, generating more revenue (18:54) and more profit. (18:55) There’s a very, very logical connection there. (18:58) So I encourage everyone to do that. (19:00) The second thing is, obviously I talk a lot about CSP. (19:05) We’re quite excited about the investments here. (19:08) I really encourage our CSP partners (19:11) to focus on developing the muscle of upsell. (19:15) The beautiful thing about CSP (19:17) is that it’s this always on motion. (19:19) So when you’re renewing an ME3 customer, as an example, (19:24) we wanna help you get all of the tools you need (19:28) to do the upsell. (19:29) And that could be attaching co-pilots. (19:31) It could be attaching a mini bundle. (19:32) It could be upsell to ME5. (19:34) There are a wealth of tools available to our partners (19:38) to help you do that. (19:39) And at the same time, we are skilling our own sellers (19:42) to do this work with you together. (19:45) This is the next wave of how we work together (19:48) with CSP as a hero motion in our business. (19:51) And then last but not least, (19:53) I have to say it again, customer zero. (19:55) It’s really, really important. (19:57) The partners that utilize this tech (20:01) are truly the ones that are the most credible (20:04) and really leading the way with customers. (20:06) I would encourage every partner out there (20:09) to go check out CoPilot Chat. (20:11) It’s free. (20:12) So there’s no blocker here. (20:15) And it’s a great way to familiarize yourself (20:18) with the easiest way to experience AI. (20:21) And it also allows you to build agents. (20:25) And the thing that’s really powerful about this (20:28) is agentic is the most asked about topic. (20:33) You know, if you go into the ABC just next door, (20:35) there isn’t an ABC with a customer (20:38) where they don’t ask us about agentic. (20:40) And so we’re in this zone of bringing in partners (20:45) that have already built their own agents (20:46) inside their own businesses. (20:48) Microsoft is doing this ourselves too. (20:51) And so the partners that are customer zero (20:54) on this technology are the best equipped (20:57) to co-sell with us and go to market with us. (20:59) So I’m quite excited about this. (21:01) And Nicole, you could have, (21:02) it’s almost like I gave you a list of things (21:04) to cover for people because we’re gonna cover (21:06) so many of these topics up on stage the next few days. (21:09) That’s awesome. (21:09) So, so great to have you back here. (21:11) Thank you. (21:12) Your leadership is commendable, (21:14) really commendable for what you’ve been driving (21:15) to the organization, (21:17) the alignment of the sales organization (21:19) and some of the work your team has been doing (21:21) just this year alone. (21:22) But everything you’ve done to support this ecosystem (21:24) in such a big way, (21:25) I applaud you for all the work that you’ve done, (21:28) the support of this Microsoft ecosystem (21:29) and these partners up here today. (21:31) So thank you so much for making the time for us (21:33) at a very busy time of year. (21:35) Thank you. (21:35) Thank you for all of your support (21:37) and just a massive thank you again to all of our partners. (21:41) Your success is phenomenal. (21:43) I’m so inspired by it and I’m beyond confident (21:46) in what you’re gonna deliver in the year ahead. (21:48) It’s gonna be an incredible year. (21:49) Yeah. (21:49) It’s just getting started. (21:50) So glad to have you help us kick it off. (21:53) Thank you. (21:53) And coming up on stage with me. (21:54) Thank you. (21:55) I so appreciate you. (21:56) Thank you. (21:56) Thank you. (21:57) I have to take my beautiful award. (21:58) Yes, yes. (21:59) Thank you. (22:00) I love to see it up on your mantle. (22:02) Absolutely. (22:02) Thank you so much. (22:04) Thank you so much. (22:05) How about a round of applause for Nicole? (22:07) Is that incredible?nd some procurement things, right? Because they just went in, did it through the portal with the existing agreement, so it’s a little easier on them. So that’s kind of where you, yeah, they didn’t get the Mac decrement, but it, it is a better story for them . Key Tags: Microsoft, Partner Ecosystem, AI Transformation, Nicole Deason, Microsoft Partners, Generative AI, Cloud Solution Provider (CSP), MCAPS Priorities, Customer Zero, Skilling, Business Growth, Profitability, SMB, Fiscal Year 2026, Microsoft AI Cloud Partner Program, Innovation, Industry Solutions, Channel Partners, System Integrators, ISVs.

The Marketplace Revolution: Transforming How Software is Bought and Sold. Unlock the secrets to explosive growth in the digital landscape!  Subscribe to our Newsletter: https://theultimatepartner.com/ebook-subscribe/ Check Out UPX: https://theultimatepartner.com/experience/ If you haven’t yet attended one of our Ultimate Partner Events, you’re in for a truly magical and industry-leading experience. In case you missed our Winter Retreat, we’re bringing one of the final sessions to you here: the Ultimate Guide to Partnering. In this session, join industry leaders Jason Rook, Dux Sy of AppPoint, and Dexter Hardy of Integral as they dissect the reality behind the cloud marketplace hype. This dynamic panel explores the tectonic shifts driving customer behavior and how major hyperscalers are responding. Industry leaders Jason Rook, Dux Sy of AppPoint, and Dexter Hardy of Integral dissect the reality behind the cloud marketplace hype. This dynamic panel delves into the tectonic shifts driving customer behavior and how major hyperscalers are adapting. Discover firsthand accounts of achieving unprecedented reach, accelerating deal velocity, and transforming sales strategies through platforms like the Azure Marketplace. Explore the evolving promises of marketplaces, from lowering the cost of goods sold to the strategic shift in salesforces and the power of co-selling. Gain invaluable insights into public vs. private offers, multi-cloud strategies, and the role of enablers in navigating this complex ecosystem. Whether you’re a startup or an established enterprise, this session provides actionable takeaways to leverage the immense potential of cloud marketplaces and future-proof your partnering strategy in the age of AI. https://youtu.be/FGed2N2JC2U?si=p9T33-eu5Y7PnhK0 Here are 8 key takeaways from the discussion: Cloud marketplaces are experiencing real and significant growth, driven by customer buying behavior and the need for digital transactions. Marketplaces offer unprecedented reach and the potential for rapid global expansion, as demonstrated by Integral’s experience. Co-selling through marketplaces aligns incentives and can accelerate deal velocity and increase deal size, particularly with cloud consumption commitments. The “lower cost of goods sold” promise of marketplaces is more readily realized by startups with simpler offerings than large enterprises with complex sales motions. Marketplaces are driving a shift in salesforce strategies, with companies increasingly embracing digital-first approaches and leveraging marketplaces for customer acquisition. Combining channel strategies with marketplaces, including multi-party private offers, presents significant opportunities for growth and new service offerings. The choice between public and private offers depends on the company’s maturity, brand recognition, and the nature of their solutions, with public offers being beneficial for initial brand building and private offers for larger, custom deals. While professional services can be offered through marketplaces, they don’t typically decrement cloud consumption commitments, making software sales the primary driver for leveraging those commitments. It was another bold, thought-provoking, and energizing discussion that left the audience inspired and eager to take action. And we’re just getting started. If you found this conversation as compelling as we did, don’t miss another Ultimate Partner event. Our next conference, LIVE, is taking place later this week in Redmond, on May 1–2, at Microsoft’s legendary Conference Center. We’re curating an even more impactful experience, featuring returning thought leaders and fresh voices who have never taken this stage before. Not yet part of the UPX Community? Now’s the time to jump in. Get access to exclusive content, events, and workshops designed to keep you ahead of what’s next. Register Today!!! Register Today! Keywords & Transcript Jason Rook Panel AUDIO EPISODE [00:00:00] Dexter Hardy: It absolutely blew my mind the amount of reach and scale that we were able to accomplish just through the marketplace. When you look at there’s 7 million or more and growing active users in just Azure Marketplace alone, those become your captive audience for your solutions. [00:00:22] INTRO: We believe this time is like no other. We believe we refer to these as the tectonic shifts, all the hyperscalers in the world, if you add them all together. Managed services will be one and a half times larger [00:00:34] Dux Sy: because it is the customer buying behavior that has created the need for all of us to rethink our models. [00:00:40] INTRO: Until we have data quality, the effectiveness of AI cannot be realized and effectiveness of the partnerships cannot be realized. Can you figure out, first, what your purpose is and how Microsoft can support your purpose and how you can support Microsoft purpose? Now we have a partnership. It’s the ultimate partnership. Welcome to, or welcome back to The Ultimate Guide to Partnering. I’m Vince Menzi, own your host, and my mission is to help leaders like you achieve your greatest results through successful partnering. On February 20th, 2025, a small group of industry leaders converged here in Boca Raton, Florida, in this very studio for Ultimate Partners Winter Retreat. What followed was an incredible discourse on the tectonic shifts and the rapid change. We’re all seeing as partners. If you weren’t able to join us in person or on the live stream, we’re bringing this incredible session to you here. This is my gift to you. All I ask in return is that you tell your friends, subscribe. Consider joining the ultimate partner community and hopefully joining us in the future. At an Ultimate Partner event. I hope these sessions provide you the learnings you need to continue to achieve your greatest results. And now here to this amazing session. [00:01:57] Jason Rook: Um, but my first question I’m gonna ask is, uh, ducks and ducks are both, is is the marketplace hype for real? And then within that, introduce yourself. Tell us a little bit more about what you guys have been doing in marketplace, and we’ll continue to dive in from there. So Ds, I’ll start with you. Tell us a little bit more about AppPoint and then is this marketplace hype for real? [00:02:15] Dux Sy: Sure. Well, thank you. Hey everybody. My name is Ds Raymond SI serve as a Chief Brand officer at AppPoint. We’re the global leader in data security, governance, and resilience. And we’ve been in business over 20 years and these days we’re so stoked about the channel as, uh. Um, Janet mentioned we’re all in a hundred percent. We’re helping a lot of our partners build new businesses around ai, making sure their customer’s data is secure as they journey through this new world of, uh, uh, transformation. So it’s the hype reel. Absolutely. Now we’re in the early stages, and I can answer that multiple ways, but I, I, I’m gonna highlight three things why I think the hype is real. Number one, if you have large customers, specific to the Microsoft world. So a lot of these customers have what’s called Mac. And what we’re seeing for a lot of our large customers, they want to draw on their Mac and it just helps our uh, deal cycle to go through much faster. So that’s number one. If you’re an enterprise Azure marketplace, for us it’s real second beyond the Microsoft marketplace, there’s tons of marketplaces out there. That’s how really we scale and go to market with our channel business. Uh, we’re in over a hundred marketplaces around the world, and that’s one, one of our top strategies to grow our business in the channel ecosystem. And number three, that’s the reality of the world. Looking forward to the future, you can only hire so many sellers in your organization. You can hire so many p dms and channel uh, leaders. You need automation. You need technology. You need a better way to distribute. So I think that’s why the hype is real. [00:03:50] Jason Rook: So Dexter, I’ll kind of come to you with the same question. I know you’ve, you’ve been on this journey for a little bit of time now. Um, you’ve got kind of a little different business model that you’ve built and you’re building, um, for you is the marketplace hype for real? And then tell us a little bit more about Integral. [00:04:05] Dexter Hardy: Okay. So, uh, glad to be here. Dexter Hardy, president, CTO at Integral, Inc. Uh, simply put, we help you move to the cloud. Um. We started out as an si, so doing a lot of the app application development, migrations, things of that nature. Um, the small thing called covid happened, you may have heard about it in the news, but, uh, what we did was we focused on what was our superpower, what did we do really well, and we created cloud solution accelerators, putting them in the marketplace, Azure marketplace specifically. And what we saw, and this is answering a long-winded way of saying. It’s not hype. It is actually a real thing that allows you to grow. We went from being a small regional organization to the first year of being on the Azure marketplace. We were in 44 countries by the following year. We were in over a hundred countries, and that’s continuing to grow to this day. So I think the first thing that people need to really focus on if you’re leveraging marketplaces, are what is the value proposition of your software and or solution? Second, what is the experience? I heard a lot of conversation about AI and the agents and what it’s gonna do and how is it gonna impact us? Well, people don’t buy an iPhone because it has a feature list. They buy it for an experience. And so I think the marketplace is going to amplify experiences, uh, for by buyers. [00:05:31] Jason Rook: Well, I would, I would just chime in and, and say from the a representing the hyperscalers, um, that it’s absolutely for real. And I think if you think about why it’s for real, it’s really for real. Because of all the things that Jay just laid out for the next 10 to 20 years. Right. And so for all of the hyperscalers to participate in the AI evolution, microtransactions, consumption based services, we all have to build these mega data centers and we have to have people in there using them. And the path to get there is to get more software development companies building on our platform. And you can’t get. Software develop, develop companies to build on a platform if you don’t have a way for them to sell today. So it is absolutely for real, wherever you’re at on that adoption curve, it’s going to happen. Right. So I think the next thing, when I think about the, the hype about marketplace, we also talk about the promise of marketplace. There’s a couple things when you, when you think about marketplace and what it does for you as a software development company or a channel partner, um, there are a couple things we often kind of refer to and one. I’ll go back to the marketplace promise of kind of expansion and reach of customers, um, docs. From your perspective, um, has that promise kind of been true for you, the reach and expansion with Market Cloud Marketplace? [00:06:47] Dux Sy: Absolutely. So at point, we’re a 20-year-old company and we started our business, frankly, doing the hard things first. We went after the enterprise business. We built a global. Platform and we’re in 17 countries. That’s what we did first, and then frankly, we’re playing catch up on channel. We, we realized and recognize that channel is the way of our future, and through the marketplaces, that’s how we’re growing so fast. We’re doubling down on channel. We’re committed to it, and not just from making sure that we get new partners, but we also get feedback. We are building new technology specific to the channel ecosystem, and we’re gonna deploy it through marketplaces as well. [00:07:31] Jason Rook: Another thing about this conversation is that it is a little bit unfair because I do know all of your marketplace data, right? And so this question about expansion and reach Dexter, um, give us, I mean, your numbers are off the charts with that. So give us a little bit of your perspective about marketplace and your ability to reach new customers and grow. [00:07:50] Dexter Hardy: Okay, so, uh, he has a back, he has a back channel to see our, our statistics. But like I said before, um, it absolutely blew my mind the amount of reach and scale that we were able to accomplish just through the marketplace. When you look at there’s 7 million or more and growing active users in just Azure Marketplace alone, those become your captive audience for your solution. A lot of companies are missing out on those eyes and those buyers, but the marketplace is a 24 hour sales guy that’s like ready to transact whenever your customer wants to transact. Add on top of that research from Gartner. Tech buyers now want to buy digitally. They don’t want to necessarily get out on the phone and just go through the traditional sales cycle that comes second. Now, like if they want, if they want to engage with you in a very deeper way. Well, can you get your foot in the door first and the marketplace opens that door up for you? So for us, like I said, over 18,000 I think, or so customers, we have, you know, over a hundred million Azure consumption hours on our solutions and growing. I think that is the opportunity where you see we’re adding value, you’re changing the experience, and for us is an absolute amazing ride. [00:09:13] Jason Rook: Okay. So another marketplace place promise that you often hear from, from everyone in this space is that, and, and, and Dutch, you kind of alluded to this with the Mac component. Yeah. But it’s that deals move faster and deals are larger in cloud marketplaces. Um, I’d love to get your perspective on that particular marketplace promise. Are they faster or, you know, deal velocity and are they larger deals? [00:09:35] Dux Sy: So maybe before I answer that question, Jason wasn’t expecting this. For, for the benefit of the audience. Maybe some folks may not be familiar with Mac, uh, especially folks watching as well. Yeah. So yeah, the official definition of Mac, [00:09:46] Jason Rook: yeah, well, uh, Microsoft Azure consumption commitment, but in reality, all the hyperscalers have some type of cloud consumption commitment that a customer can make. So you have the EDP or the PPA with AWS, you have the CUD with G-D-G-C-P. Um, and you know, if you think about modern procurement and those new millennial buyers, they probably know those ments acronyms today because that’s how they’re thinking about cloud purchasing, cloud software, right? So customers that have this cloud consumption commitment. And in many cases, they have the ability to draw down that commitment when they purchase, let’s call ’em eligible applications through a cloud marketplace. [00:10:21] Dux Sy: Very good. So to answer your question, um, yes and no. Yes. In our enterprise customers, so a lot of our enterprise customers, big companies, they have a lot of these commitments. And what we’re finding is not only that, it makes it faster, sometimes makes the deal size bigger for us, because in the past, let’s say they, they, they wanna procure. A lot of solutions from us, but they’re like, you know, based on budget phase one, phase two in the next two years. Whereas, you know what, we could do them both and draw it from our Mac commitment. So on the enterprise level, absolutely makes it faster, makes it better for us. But then if we go down to the SMC space, for example, it’s, it’s still growing because in some cases the flexibility of the Azure marketplace is still not on par with the other marketplaces. For smaller organizations. Yeah. [00:11:10] Jason Rook: Um, Dexter, same question to you and then I’ll kind of respond to that. Okay. [00:11:15] Dexter Hardy: So what we see is, well, first of all, we would be considered a startup because no one would’ve known our brand. No one knew who we were. So what we did was we used the marketplace one to spread out and grow our brand. We, we, I worked in marketing, supporting marketing agencies. We focused on the marketplace as a groundswell opportunity. So what we did was the marketplace has so many people out there, our barrier to, we lowered our barrier to entry. And the marketplace gives you that easy transaction to kind of acquire and build out your brand. And now what we’re focused on is deepening those relationships through a channel and through additional, uh, you know, deepening that relationship with the customer, going in, cross selling, doing different things, talking about AI readiness, et cetera. So that’s where we different approach. Mm-hmm. Same outcome is really just expanding your reach and we were able to do that in the marketplace, to deepening that relationship and then going into co-sale, going into, uh, you know, bigger, more tangible, uh, sales within, within those organizations. Yeah, [00:12:26] Jason Rook: so I think docs, especially around your point around cloud commitment, from my purview, there’s no doubt right, that marketplace deals. In some ways are larger granted now. So Microsoft, we don’t know what those deals look like off marketplace, right? But what I do see is a lot, um, a lot of upfront annual payments or a lot of upfront deals, right? So what used to be a three year term is now turned into a one year upfront, right? We see that a lot ’cause that customer’s trying to manage that cloud commitment that they have. Uh, we’re gonna talk a little bit later about in integrating channel into that, and I think one of the things that the channel does. Really well is that the channel helps a customer with that procurement journey. And we see channel partners that have just amazing kind of cloud estate practices, right? Where they help the customer make those purchases. But I do see larger deals. Um, I. I would say from a velocity perspective, it’s absolutely true as well. At least from what we see from the minute a deal enters the pipe to the minute it closes. A lot of times we find out about those deals like three days before the end of the month. Right. And which, which might not be typical off marketplace experience. So the, I think those two marketplace promise topics are kind of, have. Positive answers, but I got another one that I don’t, I don’t know where you’re gonna go with this one. So one of the, the promises of cloud marketplaces is this idea of, it lowers the cost of goods sold for the software, develop the development company, right? So, you know, all these promises of automation and scale and those types of things. But when you think about your journey in conversion and selling through cloud marketplace, mm. Have you really seen your costs go down? Have you seen fewer people? Have you seen the deal cycle get easier? And you know what I’m gonna change. I’ll go to Dexter to start this one and let you finish ds. [00:14:09] Dexter Hardy: Okay, well, absolutely for us, uh, we focused on the automation first. So leveraging ai, having a small team that can punch way above our weight with regard to being able to deliver our solutions are out there. Again, you have this 24 hour salesperson that’s pushing that out. Our costs of goods sold are not increasing relative to the amount of, uh, expansion and growth that we’re seeing in our organization. And that’s really been a powerful thing for us. [00:14:40] Dux Sy: So for us, not yet. So for us, the velocity is faster. And I think this is where we’re different because a lot of our, uh, marketplace transaction are private offers. So the idea is we’ve done the work. We pitch, we sold and we created this private offer for transactional purposes. So a lot of the backend is still the same, but what it does help is just the velocity. [00:15:06] Jason Rook: Okay. So I would, I would say my perspective on this particular marketplace promise has a lot to do with. Who you are and where you’re coming from. So in Dexter, your, your situation, you’re more of a startup. Right. And I know your business, you have lots of different skews, but I think more of the startups that I talked to, like the ones that come outta the Microsoft ISV success program mm-hmm. Where they, they. Kind of, they’re born in the marketplace. We used to term them born in the cloud, right? But they’re kind of born in the marketplace. They’ve designed their entire sales motion around it, and maybe they have one, two simple SKUs, right? That that’s it. And I think they see that as a lower cost of good sold opportunity. When I talk to the big guys, the household names, the NetApps, the Palo Altos of the world, that’s not the case, right? They have hundreds of SKUs, hundreds of agreements. Um, they’ve, they’ve got everything they do as a custom private offer deal. Mm-hmm. And so I don’t think they’re realizing just like you, much like you docs the, the lower cost of good sold promise of, of cloud marketplace today. Um, so let’s, let’s move forward to kind of building off that cogs conversation into shift of your sales force. Right. Um, and I think you both have an interesting perspective on this, um, Dexter, let’s start with you again as well, because I think you shifted from a different business model, right? Yeah, absolutely. Um, what, what’s the shift of Salesforce look like for you with cloud Marketplace? [00:16:28] Dexter Hardy: So again, cloud marketplace, we are digital first. We didn’t even want to have a representative out trying to sell our product first. Because we were changing from an SI to an ISV. This was a new model. Obviously we wanna prove it out, but the proof is in the pudding to use a southern term. We are, we are benefiting from that 24 7. It’s right there in your face. It’s click to add, you download the product or deploy the product to the cloud. And it moves like our time of our customer acquisitions, three to 400 downloads a week, like customers are quickly. Able to acquire and move with our solution. So for us, we wanted to go there first, and then what we add on that, which was brought out another section is customer set. Right? We make sure we follow up and then that’s where we do our cross sale or deepen that relationship and then do co-sell from that perspective. [00:17:26] Jason Rook: So what about you Dux shifting that sales force that you already had in place for 20 years? [00:17:30] Dux Sy: That’s right. So, uh, we’re, we’re in this great transition, so I would say. Marketplace. And frankly, all these uh, new cloud models is a catalyst for us. So, as we’ve said publicly, we’re really pushing to shift our business to be very channel focused. Not to say we’re going to, uh, uh, forgo our current sales organizations ’cause we still have a lot of great customers around the world that are enterprise level, that our sales teams we need to focus on. But what’s happening today, even a lot of our enterprise sellers. They recognize the value of the marketplace because it can accelerate deal velocity. So that’s one. But then knowing that the future for our organization is really support a lot of our partners, the, the understanding and also the value our organization putting on marketplaces is continuing to grow. So I can see eventually there’s gonna be a, a huge shift, regardless if it’s our direct sellers or our channel team. Uh, but we’re in that transition phase, right? [00:18:31] Jason Rook: So what do you think’s the bigger leap for your direct seller sellers? Is it the leap to understand marketplace transaction model? Or is it the leap to selling better through channel? [00:18:45] Dux Sy: I think, are you asking which one would come first? [00:18:48] Jason Rook: Yeah. [00:18:49] Dux Sy: I think it’s, it’s actually both happening at the same time. ’cause a lot of them are seeing the value today. Like for example, a lot of our top customers are big Microsoft customers. So they’re seeing, wait a minute, my sales cycle is much faster if I go through the marketplace. So everybody’s excited about that. But then at the same time, on the channel side, this myth that channel is for mid-market and SMB, it’s not quite true anymore because even there’s a lot of channel partners working with enterprise customers. So that’s very attractive for our direct sellers too. [00:19:26] Jason Rook: Um. So let’s, let’s move forward to another question, and I’m going to, I think it’ll, especially at, uh, ultimate partner, we use the term co-sell a lot, right? And I think at, especially at Microsoft co-sell can both be a noun and a verb, right? So the verb is going out and selling jointly with everybody in this room. The noun is the program, right? So, um, you guys have both participated in co-sell the Noun or the program for several years. And today in the Microsoft world, that’s a very Microsoft specific cloud marketplace question. But, um, co-sell is marketplace, right? You can’t do one without the other. I’d love to get Dexter, we’ll start with you. I’d love to get your perspective on what co-sell and marketplace is changing in your business. Good and bad. [00:20:11] Dexter Hardy: Okay. So I think just speaking from our journey, um, you have to be at a certain level. Of sales within an organization to even think about co-selling. And a lot of people miss out on, you know, are people buying your product now? Well then co-selling is not gonna work for you, right? So you have to have a certain level of critical mass that you’ve been able to obtain within your organization, and then you activate that part of selling. So that’s the first thing that I would say. Is it good or bad? I think it’s great because now you have the ability to amplify. And get those relationships built deeper across, uh, organizations where you may only be in one business unit now, now you have an enterprise agreement. So I think, you know, combining the Mac, telling the story that you, you know, you have this critical mass within your organization. Hey, company, we’re over here. You’re, you’re using us, you can pay down your Mac. You have the, don’t go in the store and pay cash. You have a coupon. That’s what a Mac is. I always tell people that like, it’s like. You have a Publix coupon, go with the coupon. Don’t go spend cash, right? So just making that awareness for your customers so that they understand the value of your solutions and how they can leverage that to save, uh, potential dollars. [00:21:29] Dux Sy: I haven’t seen those Sunday paper coupons in a long time. It’s all digital now. It’s [00:21:34] Jason Rook: all it all digital. Yeah. So docs, um, yeah. I mean, endpoint’s been a co-sell Yeah. Partner of Microsoft for years, right? Mm-hmm. Um, what’s your experience been as, as you’ve shifted this model and as you, the Microsoft sellers that you’ve known for Yeah. Decades, right? Shifted it to the new co-sell model. I think it’s [00:21:52] Dux Sy: great. I think first of all, right, speaking of the Mac again and again, not to belabor my point, it. Increases the velocity because with co-sell marketplaces, customers, they just want to draw from their Mac. That’s number one from our Microsoft counterparts. It hits their a CR and they would walk us in because they know, oh, your solutions are a marketplace. It’s gonna help me, it’s gonna help you. The third part, it just broadens our sphere of influence at that point. And while we, we may be a, a larger ISV since we’ve been around 20 years compared to others, but there’s. A big market out there. There’s a lot of customers out there that don’t know us, um, and, and they see us and we can take advantage of it. [00:22:37] Jason Rook: So I, I, I think I would echo both of you. I think the interesting part about co-sell is in the marketplace world is that it does have clear and accountable. Um, alignment to seller compensation, right? Mm-hmm. So that has changed a lot of the relationships. I think the other thing, and I’ve talked about this at Ultimate Partner before, is it’s moved the cheese for a lot of traditional Microsoft partners. Mm-hmm. Um, especially those that are not software development companies that are more systems integrators, GSIs, MSPs, VARs, those types of partners, whatever acronym you wanna throw on them that have always struggled to have a relationship with Microsoft. Um, because they were, um, VMware reseller, a Cisco reseller, and Microsoft wasn’t the top of their line card. Um, now those channel partners are selling massive ISV deals through marketplace. Mm-hmm. And they’re bumping out some of the more traditional Microsoft partners that were there at the table because they had relationships. And I think that’s an interesting trend. That’s only gonna continue as we see this marketplace momentum. Uh, go on. [00:23:42] Dux Sy: I want to add to that, and that’s, I think, where the future promise is, right. It’s this better together partner to partner story. It’s the, the ability to do multi-partner offers. And, and that’s a lot of the things we’re working on today. And what, what really, uh, gives us that good combination, be it an ISV, an si, an MSP. So I think that’s where there’s a lot of room for growth in that aspect. [00:24:04] Jason Rook: So let’s just jump into that top area right now. Doc, you, you’re, you’re trying to really flex this channel muscle. Tell us a little bit more about what you’re doing with multi-party private offer and embedding channel in your sales. Sure. [00:24:17] Dux Sy: Uh, so we work with a lot of different partners in different shapes and sizes, and the team has done a phenomenal job with putting together multi-part offers. Some of them we may be behind the scenes that the partners just going forth, so, so a very specific example. So we talk about ai. We all know that the holdup of ai. Is not because of ai, but because of poor data. Right? [00:24:42] Dux Sy: And you can see all these reports, you know, copilot pilot stays there. It’s just a pilot. And the challenge is not because of copilot, but the data states not ready. You know, you have 40-year-old TPS reports that’s sitting there, right? Uh, oversharing is a problem. So all these things, right? So what we’re working with a lot of our partners today is, Hey, this is an opportunity. If you do services around migration or cloud protection, introduce a new service around ai, data security, and let’s put it together in the marketplace as a multi-partner offer. So people can click, Hey, I want AI data readiness or co-pilot confidence, whatever you want to package it as. So those are some of the things we’re working on and it’s really exciting ’cause it’s, it’s introducing a new line of service for our partners to expand their business in. Yep. [00:25:33] Jason Rook: So Dexter, you and I chatted about your channel strategy, right? And when I look at your marketplace business that I would say today, I’ll just say it’s not very channel heavy, right? And it’s super attractive marketplace business to me, right? So I’m, I, my question was why are you gonna go down that path? So I’d love to know more about what you’re thinking about how you’re gonna grow utilizing channels and marketplaces together. Right? [00:25:54] Dexter Hardy: So the first thing that we focus on again, is, are, do we have, and are we adding value? With our huge span of customers and the amount of usage that we’re getting on it, that answer, that answers hand, hands down. Yes. So now what we look at as a channel partner, our solutions help sis do their job. That’s what we cut our teeth on. That’s what we were. And so that’s how we started as an organization. So now it’s just getting the word out to other sis. We can help you reduce your cost and be more profitable by leveraging our solutions. So selling through the channel becomes the opportunity through a multi-party private offer. Through that channel relationship to say, Hey, we’re not competing with you Big five three, whichever consulting you are now, right now. Right. So where we’re looking to partner with you one to give you more, um, profitability margin. You know, you look at margins, you can say, Hey, this is how we get here faster to. That a CR that you’re looking to get to become a better version of the partner program. ’cause there is A-A-K-P-I that you need to get. You get that because now we’re sharing, and now that becomes part of your KPI as well. The third piece is, well, it’s a big pie, right? Even if we’re looking at, we’re talking about trillions of dollars, the law of large numbers, we multiply any percentage times a trillion dollars. That’s a large number, right? So that’s how we look at. Holistically growing that market. And so instead of having just one line of business or one way to go to Market Channel adds another growth opportunity for us and also partnering through the MPL. [00:27:34] Jason Rook: So I think there are probably some software development companies that have tuned into this or even in the room today, um, that are still thinking or still really early on their particular journey. Right. Yeah. And I think one of the things that if you’re in that case, you might have some questions about. The utilization of a public offer versus a private offer. Right. We usually, we refer to public, our private offer as a custom deal. Mm-hmm. Um, and I know both of you have different perspectives on that or different levels of success. Um, Dexter, let’s start with you. Public offer and private offer. Your business has been very good, which is public offer, right? We are public all the way. Yeah. [00:28:14] Dexter Hardy: Okay. So, and I, I, I say we start public all the way again. That barrier to entry. Customers don’t know your name. You gotta build your brand, you gotta build your momentum. You get out there, you’re acquiring customers, you know, 33, 33 government agencies, you know, over 160 countries. And now you can then build on that second layer, right? Which is the private offer. You can say, Hey, X, Y, Z customer, you’re, we see you’re using all of these solutions. It would make sense to do this private offer with us, as opposed to. We don’t have a name, we don’t have a brand. We come in with our sales person and we’re saying, Hey, come do business with us. No, you don’t even have the credibility to do that. But now, because we’ve taken that ground soil approach, we’ve gone out, we’ve, you know, built out our brand using public offers, now we can then step into that next tier. [00:29:05] Jason Rook: So, so ducks, from your perspective, WI, you, it sounds to me like you’re mostly all custom deals. [00:29:13] Dux Sy: Today. Correct. So a lot of our deals, ’cause it’s the nature of deal size, a lot of ’em are very large and we have custom private offers, but long term we want to build our muscle in the public offering and especially a lot of the new solutions we’re, we’re coming out with. [00:29:27] Jason Rook: Yeah. I think my perspective is, I’ll, I’ll say in the, in the Microsoft commercial marketplace, um, if you think about revenue wise, definitely private offer is king, right? And 17 times larger than public offer deals on the whole. But what you do see is. ISVs or software development companies that do have the, your story, Dexter. And again, back to the way I kind of framed you up when I see that they’re mostly those that started in cloud marketplace. Right. And they’ve been that way forever. I think we’re still in this phase. I know early majority, you know, that we’re there, but we’re still in the space where I think customers come to the marketplace to buy, not to shop. Mm-hmm. Still. Um, and if you think about the ones that are really coming here, they’re coming to draw down their cloud commitment from some hyperscaler. And they’re, they know kind of what they’re looking for in most cases. And I, I think even with you, Dexter, they know what I mean. ’cause the solutions you saw are really unique. Right. If I’m looking for Bantu or something like that, I, I am gonna find that I’m not just coming out to the marketplace, say, oh, who has something I could buy today? Right. I don’t think we’re there yet. I think in the future when we get more further down the path that Jay kind of outlined today with microservices and that type of thing mm-hmm. I think there’ll be more of that shopping. But the most successful ISVs today are. Are really wrapping around that, that custom story, or they have, I would say you have very clear and unique offers in the marketplace. Dexter. Yeah. [00:30:48] Jason Rook: Um, so there’s a lot of work here that you guys have put in to get into cloud marketplaces, a hundred marketplaces for you, DS and, you know, in Dexter. Um, I’m sure. Let’s, let’s just ask right now, what’s your strategy around multi-Cloud Dexter? We’ll start with you. [00:31:04] Dexter Hardy: So, um, I’m a huge proponent of doing one thing really well, first. And then expanding on it. So we focused, we Microsoft partner, we focus on Microsoft. We’re doing that really well. Our customers are in AWS and GCP. So we are moving out into those ecosystems based on what we see our customers, where our, where we see our customers. Mm-hmm. So that way we’re able to give them a full picture of how we can support them. If they chose us over here, they know that they’re gonna do the same quality across every cloud. Uh, so that’s our approach is just not that we are saying, Hey, let’s just, you know, go out and, you know, shotgun approach just kind of go everywhere. But no, it’s a systematic, we’re doing this really well here. Our customers are there and so we’re, we’re following our customers [00:31:54] Jason Rook: docs. How, how are you handling them? [00:31:56] Dexter Hardy: Cloud? So for [00:31:56] Dux Sy: us, I think the, the driver for us to invest in marketplaces is not necessarily direct customers. So when we started this journey, this is way before mm-hmm. Um, uh, Microsoft Marketplaces is we were committed to growing the channel, and we know a lot of our partners transact through marketplaces. So that’s how our marketplace journey started. However, through time, uh, especially through AppSource, anybody remember AppSource or it still [00:32:24] Dexter Hardy: exists [00:32:25] Dux Sy: as your marketplace, right? Did I just say, do they remember? Okay. Um, but through Azure Marketplace, we have a lot of large customers really transacting there. So that’s our direct side. So, so we look at it, uh, two-prong approach, right? We scaled fast because we wanna make sure we want to meet our, uh, channel partners where they are. But then now as customers are really buying and transacting to marketplace, we’re also serving them, um, in these marketplaces as well, right? Multi-cloud. Absolutely. That’s part of our growth strategy as well. Cool. [00:32:55] Jason Rook: So a another question for maybe those that are early in their journey with cloud marketplaces, especially if you’re a software development company. And I think today we have, um, we have this ecosystem that continues to evolve that we, at Microsoft, I think we’ve thrown a title on ’em. Then in a lot of the other hyperscalers have, have as well, we’re calling them the enablers, right? So we, one of those keynote sponsors here at UPL is sugar. Um, you know, you got tackle, we transact Azar work span. Every day I get a new email from another enabler. Um, I don’t think either one of you used an enabler yet, but you both have different opinions. And Dex I’ll start with you and then Dexter, you can kind of give us your opinion on the enablers. Like where do they play for you and where don’t they? [00:33:34] Dux Sy: Correct. So I think what the enablers are doing, uh, for, for marketplaces are fantastic. And I think when we started our journey, uh, and, and maybe a lot of them haven’t, didn’t exist yet. We had to figure this out. So we thought, boy, we’re in this business for 20 years. We figured out how to grow direct, working with large customers, government agencies. We can figure this out. Right? Which we kind of did and we’re doing today, but it’s, it’s work, right? It’s, it’s, we have a whole team doing all the different pieces that needs to be done, marketplaces. Whereas I can see for, let’s say you’re a startup, you want to scale, you want to interact with different marketplaces, and you don’t have that team. I think enablers are, are uh, uh, fantastic partners to work with. It. [00:34:18] Jason Rook: So Dexter, what’s your take on the enabler [00:34:21] Dexter Hardy: ecosystem? So we personally do not use enablers. Um, and again, that’s, that was our choice from a startup perspective. You know, price point being a barrier. You need to, as a, as a startup, you have so many other barriers in front of you. If technology is your strong suit, which was ours. A lot of it we kind of understood. So we leverage our own internal knowledge to go to market and, and, and take that, take that step. So if it’s not your superpower, obviously the enablers are going to get you there quicker, faster. And so you can, you know, justify that cost. But for us it was a scenario where, okay, we already understand how to deploy the, to the cloud. We understand what the, what the rubric is, so why add that additional cost to our. Additional stack. Right. So for us, we, we chose to go net new on our own. Mm-hmm. And so that’s allowed us to kind of build faster, quicker, because we don’t have to integrate with something else. Right. We automated that. And we do use copilot. We use creating our own agents as well. So, uh, like I said, we’re leveraging technology to deliver technology. Okay. [00:35:30] Jason Rook: Yeah, I’d say, you know, from my perspective, I think. Hmm. A couple things. I think, again, I mentioned the, like the larger, more historical household names, security and data providers. Um, definitely when they have legacy business and they’re bringing it over and they have, you know, hundreds of SKUs makes a lot of sense. Um, I think the next evolution of that whole group will be the additional value they provide, right? Mm. So, you know, everything from, like we talked earlier about just the. The effort to put together private offers and the effort to do that with a channel partner and, and those types of things. Um, the effort to track that business, Dexter, when you go multi-cloud, maybe that’ll push you over the edge, right? So I think there’s, that ecosystem will continue to evolve a little bit. So, you know, we wanted to save about 10 minutes for some questions. I’m gonna just ask you, you know, for some parting thoughts for the, the audience, like what, what would you like the audience to take away about your journey that might help them out in Dexter? I’ll start with you. [00:36:30] Dexter Hardy: Okay. Um, well, as an, as an entrepreneur founder of a business, obviously you have to take calculated risk and emphasis on the risk side because you know the market is changing. What will used to seem steady is changing rapidly. AI is just making that faster so, you know, have confidence in what you’re doing. Focus on being 1% better, do one thing really well and you will be just fine. Yeah, [00:36:59] Jason Rook: ducks. What [00:36:59] Dux Sy: would for me, uh, three quick things, right? Number one, who’s your audience? Who’s your market? Are you selling direct? Are you selling or you want to do partner to partner? So once you’re clear of that, then you decide which marketplace you want to go to. I, I agree with Dexter, right? Focus, at the very least, go, go with the top three hyperscalers, and if solutions would. Would support those audiences in the three, uh, marketplaces and or four go for it. And then last, but not the least. As you build that muscle, then think of scaling through channel. Right? Yeah. [00:37:33] Jason Rook: Good. So we’ve got about 10 minutes left. Let’s, uh, let’s open it up to some q and a. I know there’s microphones and we already, oh, cloud marketplace. We have ’em stacked up. [00:37:42] Question: Yes. Yes. Uh, so first of all, I, I want to say this was a really, um. Really great contrasting conversation, the two different parts of having success in the marketplace. So absolutely amazing. Um, I’ve got kind of a two part question, uh, because I think it’s really important for a lot of ISVs to hear this experience is, and, and I’ll start with that point because it’s something I have familiar, uh, fam I’m familiar with. Um. A procured app app Point back in 2018, 2019, brought it into a big bank. Um, it was purchased through Kaizen, which was a partner of your all’s Microsoft brought in great experience. Um, so I can see the benefit and I can hear everything that you’re doing is, is exactly what, uh, ISVs need to be targeting in terms of co-sell. So congratulations on that. I love to hear all the progress that you guys are making. Um, my question for you is, it’s something that I run into all the time with with companies is we hear these, we hear these ISVs just say, you know, our product is just our product. It’ll never be anything other than custom. We’re always just gonna do private offers. They just dismiss the, the frictionless type experience that you can get it in, in a marketplace. Like what, what you’re seeing with Dexter. And so, you know, it’s one of those things you, you hear repeatedly and I see at point you, you’re having a whole lot of success with co-sell. But what type of obstacles are you up against in terms of getting the alignment inside the organization to actually start working towards PLG motions mm-hmm. That are going to enable you the way that Dexter is because you’ve got that, you know, that, that, uh, contrast. Yep. Where a startup is born in the born in the marketplace, natively deployable. You’ve got that experience and then you’ve got more legacy systems that are extremely customizable. And rely on private offers and, and yet stay away from growing towards that trajectory. Mm-hmm. So I’m curious from, from your standpoint, what are those obstacles? How are you bringing that to light inside the organization? Mm-hmm. To, to make that change? Yep. And then my second question, so I’ll, I’ll tee you up, Dexter, is what is it that you’re seeing with the click to deploy type mechanisms, the public offering that you offer? What is it that you’re seeing? That’s creating the most success for you because I think, um, it’s really important the experience that customers have. It’s not just about finding your product, it’s being able to be easy to use, try then buy. So I’m curious, you know, what has been successful for you? Um, what’s your name, sir? Justin Murphy. [00:40:12] Dux Sy: Justin, thank you. I love your glasses. [00:40:14] Question: Oh, thank you. I like your suit. [00:40:15] Dux Sy: Okay, so fantastic question and uh, maybe let me preface it with this. I think. I think what I love about it, I, I’ve been here 12 years and, uh, I think this is like the best year I’ve been here with all these changes in the growth. So AppPoint started and, and I, I share this and I’m not, you know, I’m shamelessly plugging this, but I think AppPoint is the only ISV started with two people building the first SharePoint migration solution in 2002 in a public library in New Jersey. Fast forward today that went public. We went public on the backs of Microsoft. So thank you Microsoft. Right? And and the reason why is App Point’s a very entrepreneurial organization. Now we start our business with the enterprise, like enterprise is the hardest nut to crack and we cracked it and we’re continuing to do well. That’s great. And we realized though, to scale and to grow, we gotta do channel. We gotta hit. Those what folks with the SMC audience. But we can’t do it. We can’t hire enough people to do it. ’cause we gotta focus on the enterprise. And from a change perspective, pivoting, I would say we we’re pretty up for that. As Dexter mentioned risk. We love risk. Right? When, when, uh, Microsoft back in 2010 announced, Hey, we’re gonna go full B pause if you don’t know what that is, you weren’t born yet. This is the granddaddy of 365. And they reach out to us, say, Hey, we’re gonna go full on the cloud, but we need partners like you to build on the cloud. We said, yes, we’ll do it. And then when they shifted to, uh, subscription, we did it. That was a big jump. ’cause back then everybody was like, what are you smoking subscription? Ha ha ha. Nobody’s gonna pay monthly. Right? And then, and then this idea of scaling our platform globally, we’ve done it. So we’ve done all the hard work. And a few years ago we realized. We got to invest heavily in the channel in which we have. So certainly we start and say, Hey partners, we’re in the marketplace. Here’s our solution. Enterprise grade solution, now available to SMC. Great. But we didn’t stop there. We listen, partners like this is great, but uh, we have a lot of partners and it’s so manual. We need multi-tenant management, we need workspace governance. We need, you know, risk monitoring. We need like a full knock so we can see all the different clouds environment. And we built it. So we have a fantastic partner specific platform called Elements Platform, and we, we just bought a company a few months ago to integrate with that and we’re gonna continue to grow and invest and double down in it. So, to your point, right, yeah. Today, at least in the Microsoft marketplace, we have a lot of private offers because we still have a lot of those big customers we work with that they want to draw from Mac. But at the same time, from a, a. Growth standpoint, we’re really gonna invest a lot in our channel. Not not just from a selling motion, but innovation as well. So our partners, not only can they sell more and grow their business, but they can run their businesses better. So our greatest challenge really is just time. It’s, it’s really, ’cause unlike maybe other organizations like you mentioned, how did I, how did you convince your internal leadership? It’s reverse for us. We don’t have to convince internal leadership. You know, you talk about, uh, uh, Vince talked about growth mindset. We live and breathe it. Like, great idea. Go do it. Right? If you fail, it’s okay. You learn from it then, but let’s move on. So really, our, our greatest, uh, uh, thing we’re, we’re, we’re, we’re fighting with is just time. It’s like, there’s just not enough time. But other than that, I think it’s, it’s, it’s a wonderful time to be a partner in this ecosystem. There’s so much to do. Hopefully that answers your question, Justin. [00:44:00] Dexter Hardy: So I’ll start with a little bit of a quote. If we change the way we look at things, the things we look at change, and I say that from a standpoint of being an engineer. When you’re out creating software or building anything, right? You’re thinking about features, functionality, turn that lens and say, what is the experience? Our solutions are set up to help DevOps teams. Mm-hmm. Who someone gets a, they read an article and they’re like, oh, we need to implement this technology. And now that DevOps team is like, oh. What we’re doing, what and how long do we have? No. Our solutions help them with their life experience. Like you click to deploy, like you go in, you need to deploy this. Five minutes later it’s in the cloud, we’re onto the next thing. Okay, we can do those things. Right? You’re improving their experience. So that’s what we started to look at from a, from an ISV perspective, is not just software, but what are you doing to improve the quality of the people’s lives that would use your software. And that’s, you know, like I said, we were sis, we did that. So we knew, oh my God, these people are gonna be raving about this. Right? And then the market proved that out. So I would say focus on, just change the lens. If you’re looking at click to deploy or whatever it is you’re trying to evaluate, it could be, you know, rocket science, which with chat DBT and all the AI tools out there can be really made simple within your solutions. I. You just have to change the lens. Don’t just do technology for technology. Do it for the improvement of quality, uh, improvement within, uh, life experience, uh, and, and getting your, um, constituents time back. So, next question. [00:45:48] Question: So I, I know we’ve been talking a lot about software products in the marketplaces. Um, how do services, sides of marketplaces work? And I’m sure it’s different for each of the hyperscalers, right? But like. Can I, as a services provider say, oh, here’s a 50 KPOC. It’s all gonna be custom built. Right? And then like we sell it through the marketplace, it retires. Mac is, is that, is, does that work? Or is it only for software? Can I [00:46:14] Dexter Hardy: jump in on this? Yeah. If you talk to me afterwards, you can partner with an ISV and do a multi-party private offer that’s transactable in the marketplace. So including the services, right? So let I, let [00:46:26] Jason Rook: me just make, in the Microsoft commercial marketplace in the Microsoft, uh, you can now you can, well, in the Microsoft commercial marketplace in the us, Canada, and the United Kingdom, you can now sell a private, a professional services private offer. Proof of concept 50 K, proof of concept, great idea workshop training, managed service contract training. The only thing you can’t do is the time materials contract within there. Right. Your question though? No, it does not decrement the Mac. Um, so mm-hmm. Yeah. So software sales are the only thing that decrement the Mac in the Microsoft commercial marketplace. Now, all the hyperscalers have professional services capabilities and they all have different, you know, models in which those may or may not decrement cloud consumption. Um, but I think the rule of thumb for professional services providers, or if you’re a peer play si, um, it’s all about cloud consumption. And you can look at most recent AWS announcements. You can look at our earnings report. You can look at all those things. It is about driving cloud consumption of our first party products, so software’s king. Um, and so that will always get the, you know, that’s always gonna be at the top of the list. And I think you’ll consider, you’ll, you’ll, you’ll realize that we continue to provide features to allow professional services in ways that we think pull software, right? So, um. That’s the way I would think about it. If you are a pure play si, which there are a lot of those that have yet to, you know, like I was mentioning earlier, the traditional sis at Microsoft that have yet to adopt marketplace. The reason why you do it really isn’t because you want to become a transactor, although some do, because it is pretty easy money in some ways. Um, the reason why you do it is you want to keep or build relationships with Microsoft field. That’s the reason why you go down the marketplace path if that’s the the business you’re in. But from a proser perspective, yes you can do it, but software will be key. [00:48:14] Question: So then is the buyer buying that private offer and that bundle because they’re getting to retire the Mac on the software side. And then like the partnership that we would strike within the ecosystem is more like, Hey, we can accelerate your journey, right? Um, the customer’s journey, buying your software with our services. So then we bundle that together into a private offer. Customer says, oh, like Mac drawdown is gonna be 10 K, but then I need to create new outlay for 50 K for the POC. Right. Like, it, it, it feels, so when I reconcile that with some of the things we heard earlier today, right? Like $7 for every dollar that goes to cloud consumption, it sounds like, at least with your setup at, at mac, right? Like. The drawdown is only for the dollar. The $7 is like new money from the customer. [00:49:05] Jason Rook: You remember that? $7 of net new revenue that’s attached to that transaction, right? So that could be $7 of product sales, $7 of your services, the whole pie. So if you think about the most typical pro in the Microsoft commercial marketplace today, the most typical. ProServe engagement is, I’m gonna use some names just to make it up. ’cause earlier I think Jay mentioned Palo, so let’s use Palo. So you’re a system integrator and you do a great job of implementing Palo NextGen firewall or an FWS or whatever they call it today. So you go to the customer, customer has a Mac, they wanna buy Palo Firewall, but you’re gonna do a hundred thousand dollars implementation. You would, you would say, I’m gonna sell you a Palo Alto multi-party private offer for the firewall. Or a million dollars let’s say, and I’m gonna sell you my professional services private offer to do the implementation. It’s a hundred K fixed bid deal, right? So Palo’s gonna send you a private offer for your, for the firewall. You’re gonna mark it up, you’re gonna send it over to the customer. So you’re gonna make some margin on what Palo just sent you. When the customer clicks buy on that offer in their Azure portal, that million dollars decrements their map right? You, when you also send, when. In parallel, you will send over your private offer through partner center into their Azure portal. And when they click buy on that a hundred thousand dollars offer, it does not decrement their Mac, but it does end up on their Azure invoice. So the value to that millennial buyer now is they only had to go into the Azure portal and click, click, click, and they’ve bought all that. The invoice is only gonna be one invoice from Microsoft. It’s gonna come with all their other stuff. Um, also. They probably maybe got around some procurement things, right? Because they just went in, did it through the portal with the existing agreement, so it’s a little easier on them. So that’s kind of where you, yeah, they didn’t get the Mac decrement, but it, it is a better story for them We have rowdy questions in the front. I know. I love it. Yeah. So one more question because we had somebody on the chat. I wanna be respectful of the fact that the chat and then we are gonna take a break for lunch for 15 minutes. So, manic rain from, uh, NetApp, you probably know. Question for you Jason. Can you speak to Microsoft’s recently announced SME and C org? Specifically, what changes is Microsoft planning? To make with regard to channel partners and marketplaces. Loaded question. [00:51:33] Jason Rook: So I, I, man, probably we can, we can set up a call to talk about that. Okay. Um, if you’re still tuned in, um, I can’t speak to that today. That was, I mean, you know, Microsoft ecosystem that was recent, so we work in months, quarters, and fiscals, so we haven’t got to that point yet. So, yeah, good answer. Thanks for the question. Thank you, thank you. [00:51:56] Vince Menzione: Thank you for joining this episode of Ultimate Guide to Partnering. And if you haven’t done so already, mark your calendars. Ultimate Partner Live Spring is coming to Redmond, Washington on May 1st and second. This is going to be an incredible event like each of our Ultimate partner events. This one is going to be just a little bit better than the one before. We’re having incredible leaders from Microsoft. Industry leaders talking about co-selling marketplaces, aligning to Microsoft priorities and more. You don’t wanna miss this event. Sign up today before seats run out. Keywords: cloud marketplace, azure marketplace, aws marketplace, google cloud marketplace, marketplace strategy, isv, software development, channel partners, co-selling, private offers, public offers, multi-cloud, digital sales, sales growth, customer acquisition, partner program, tech partners, ai, data security, cloud migration, SaaS, B2B sales, tech industry, business growth, entrepreneurship, startup, digital transformation, Microsoft, AppPoint, Integral, Jason Rook, Dux Sy, Dexter Hardy, ultimate guide to partnering, tech trends, online marketplaces, software sales, cloud consumption, deal velocity, cost of goods sold, salesforce transformation, partner to partner, multi-party private offer, channel strategy, marketplace enablers

Why the C-Suite Must Rethink Everything—From Sales to Strategy—in an AI-Driven World How to challenge conventional thinking and how executives must adapt to the current marketplace. Subscribe to our Newsletter: https://theultimatepartner.com/ebook-subscribe/ Check Out UPX: https://theultimatepartner.com/experience/ This dynamic panel discussion dives deep into the tectonic shifts impacting the tech industry, particularly the role of AI and the evolution of partnerships. Industry experts Jay McBain, Janet Schijns, and Greg Sarafin challenge conventional thinking, emphasizing the urgent need for companies to elevate partnering to the C-suite and adapt to the rapid advancements in AI. The conversation explores how AI is poised to disrupt SaaS, reshape revenue models, and even alter the very nature of work. The panelists debate the balance between direct sales and channel strategies, the impact of marketplaces, and the importance of integrating partnering throughout an organization’s operating model. The discussion also addresses the potential for AI to both streamline operations and create friction, with panelists highlighting the importance of data integration and the development of agentic technologies. The panel grapples with the promise of AI-driven efficiency gains versus the need to preserve human-centered experiences, particularly in local communities. Ultimately, the conversation underscores the transformative power of AI, the evolving dynamics of partnerships, and the critical need for businesses to embrace change to remain competitive in a rapidly evolving landscape. https://youtu.be/OkN7nfSLuKY?si=A8q9mu-niYhFZLwL Key Takeaways AI is Disrupting SaaS: The panelists believe AI is rapidly changing the SaaS landscape, potentially rendering traditional SaaS models obsolete within a few years if they don’t adapt to autonomous SaaS. Partnerships Need Elevation: There’s a concern that partnerships are not being prioritized at the board and C-suite level, which could negatively impact companies’ success. AI Will Change Work: AI is expected to significantly impact the workforce, with agents potentially replacing task-oriented roles and digital twins augmenting human capabilities. Revenue Models Are Evolving: AI is driving a shift away from traditional subscription models, with new pricing structures emerging. Marketplaces Are Important: Marketplaces are playing a growing role in shaping buying behavior and influencing which tech stacks and ecosystems are successful. Direct Sales vs. Channel: The panel discusses the evolving balance between direct sales and channel strategies in an AI-driven world, with a potential shift in the calculus of cost of sales. Data Integration is Key: Effective use of AI in partnerships requires robust data integration across different systems and platforms. Human Element Matters: Despite the rise of AI, there’s an expectation that human-centered experiences and local businesses will remain important, particularly in the SMB sector. Don’t miss this opportunity to gain insider knowledge from industry leaders shaping tomorrow’s digital world. Tune in now for an inspiring conversation that could redefine your business strategy! Register – Only Two Weeks Left !!! Register Today! Keywords & Transcript Keywords: AI, artificial intelligence, partnerships, channel, SaaS, software as a service, technology, business, digital transformation, agentic AI, marketplaces, hyperscalers, cloud computing, sales, marketing, C-suite, leadership, innovation, tech trends, future of work, automation, digital twins, revenue, go-to-market, partner programs, tech industry, enterprise, enterprise tech, channel strategy, co-selling, integrations, tech industry, generative AI, cloud computing, digital marketing, B2B, technology, business, software, IT solutions, partner enablement, partner management, tech partnerships, AI trends, autonomous SaaS, agent layer, data integration, revenue production, cost of sales, sales enablement, partner development, channel account managers, partner account managers, digital twin, co-pilot, autonomous CRM, partner ecosystem, OEM partnering, strategic partners, small p partnering, Big P partnering. Transcription: Winter Retreat Panel Audio Episode [00:00:00] Greg Sarafin: I tell you how many people, they think more partners equals more revenue. That is completely the opposite of the truth. Fewer strategic partners equals more revenue. Everybody else should be on your platform. If you’re a platform company orchestrated in your platform ecosystem, when it comes truly to partnering, it should be a very short list. [00:00:19] Vince Menzione: We believe this time is like no other. We believe we refer to these as the tectonic shifts, [00:00:25] Jay McBain: all the hyperscalers in the world, if you add them all together, managed services will be one and a half times larger [00:00:31] Intro: because it is the customer buying behavior that has created the need for all of us to rethink our models until we have data quality, the effectiveness of AI cannot be realized, and effectiveness of the partnerships cannot be realized. [00:00:44] Intro: Can you figure out first what your purpose is and how Microsoft can support your purpose and how you can support Microsoft purpose? Now we have a partnership. It’s the ultimate partnership. [00:00:56] Vince Menzione: Welcome to, or welcome back to the Ultimate Guide to Partnering. I’m Vince Menzis and my mission is to help leaders like you. [00:01:04] Vince Menzione: Achieve your greatest results through successful partnering. On February 20th, 2025, a small group of industry leaders converged here in Boca Raton, Florida, in this very studio for Ultimate Partners Winter Retreat. What followed was an incredible discourse on the tectonic shifts and the rapid change we’re all seeing as partners. [00:01:26] Vince Menzione: I’m joined on stage for a panel discussion. With Jay McBain, principal analyst at Canals, Janet Schein, the CEO of JSG Group, and Greg Raffin, vice Chairman Emeritus at ey. If you weren’t able to join us in person or on the live stream, we’re bringing this incredible session to you here. This is my gift to you. [00:01:50] Vince Menzione: All I ask in return is that you tell your friends, subscribe. Consider joining the Ultimate Partner community and hopefully joining us in the future at an Ultimate Partner event. I hope these sessions provide you the learnings you need to continue to achieve your greatest results. And now here to this amazing session, I would say Eco somewhat. [00:02:12] Vince Menzione: I just want frame the conversation here. Janet sits on a couple of boards. I’ve asked her to join the conversation ’cause we wanna learn not only what partners need to think and do differently. But what do organizations all up need to think and do differently? Greg has led the largest, I would say, one of the largest ecosystems in the industry at ey, taking it from under a billion dollars to 11, 12, maybe even more billion dollars a year in annualized revenue with a really true partnership strategy. [00:02:41] Vince Menzione: So we wanna get their perspective here in the conversation. Uh, I’m going to start with a little bit of a softball. I want to, I want to go back to these tectonic shifts. Jay, Jay just shared a whole bunch of new information with us. Anything that was most striking from that conversation with Jay? Just now? [00:02:57] Janet Schijns: I think that, [00:02:59] Vince Menzione: just let it, yeah, let it, let’s see. Yep. You’re on. Everybody awake now? Okay, good. [00:03:05] Janet Schijns: Uh, I think that the big thing that struck me in the conversation is how few senior leaders are elevating partnership to the board and the senior level. Yeah, I, I see instances of it. I’m on some of those boards, but then I see a lot of instances not of it, where the, where the channel or partner, um, community and leader is being shoved down in the organization rather than risen up. [00:03:29] Janet Schijns: And I think this is the biggest risk to that Fortune 500 list. You wanna know who’s gonna be off that Fortune 500, less than 20 years, the people who didn’t get to that, elevated to their C-suite. And truly, if you’re not a company whose CPO is in line to be your next CEO. You’re gonna be off that list. [00:03:51] Greg Sarafin: I, I’m actually gonna hit on the AI point since my 88-year-old father asked me about ai. Every time I talk to him, see your earlier question. I started laughing. I’m like, okay, I gotta talk to Pops this weekend. Um, here’s what I’ll say about ai. It is, I, I do not believe we’re over indexing on ai. In fact, I believe many SaaS companies are under indexing on it. [00:04:12] Greg Sarafin: I believe SaaS as a species will cease to exist in five years. Unless it makes the pivot to autonomous SaaS, right? So building the agent layer. If you talk to Christian Klein about his strategy at SAP, you saw the BDC announcement last week with the partnership with Databricks. It is fundamental to SAP and every SaaS vendor on the planet large and small, that they get you to build the autonomous layer in their platform. [00:04:37] Greg Sarafin: Otherwise, you’re gonna build it in Microsoft or Hyperscaler or on video. And then they’re going to become a database in the future because the value capture will be in the agent layer, not in the legacy system of record SaaS platform. So that to me is if I’m a SaaS company, that is the thing I’m thinking about. [00:04:57] Greg Sarafin: What is the autonomous version of me? And then ultimately, what is the services on software version of me, which is the ultimate realization of like what I call the convergence between the SAS market and the professional services market. I could wax poetically about what’s happening in professional services. [00:05:11] Greg Sarafin: Yeah. But I’ll spare you all that one. [00:05:13] Vince Menzione: Well, we’ll go there. We’ll go there. Okay. But, but I wanna clarify in that, ’cause I, I do think that’s an interesting point because today we act, we, we feed the data into the CRM or ERP system, right? Very manual process. And then we act on the data, or we ask, we ask the system to tell us what to do. [00:05:30] Vince Menzione: So how, so how does the agent ai, so the entire, [00:05:33] Greg Sarafin: so the entire SaaS industry exists. To allow really inefficient humans to do things reasonably efficiently and very large multi human business processes. And how does it do that? It creates these little tasks and turns all humans into task reps, right? When you, if you have the misfortune of most of your days spent on a so platform, you’ve had that experience. [00:05:54] Greg Sarafin: It’s horrible. Right? So here’s the problem for the humans in that equation. Yeah. Task rabbits can easily be replaced by agents. Yes. Yeah. That is the truth. And they don’t have to be particularly smart agents. They’re, they’re really an agent based on an R three at this point, or a, uh, you know, a Gemini two oh is probably sufficient. [00:06:15] Greg Sarafin: It’s equivalent of maybe a college grad. Uh, to be able to do those types of tasks, rather things. Where it’s really gonna get interesting is in three to five years as that adjunct layer gets smarter and smarter, and now all of a sudden the intelligence about the finance function, facts function, whatever it is. [00:06:31] Greg Sarafin: Ends up in that layer and the old legacy SaaS database and all of the, you know, configuration files and all the hard-coded workflows and everything else, that’s meaningless, right? All that really matters is there’s a place to persistent data so it can be audited and validated and so forth, right? So it’s going to change tremendously. [00:06:56] Greg Sarafin: It’s gonna start by replacing the humans that are acting as task rec. Rabbits and the SaaS platforms, and it will ultimately be the margin capture in AI will land in two places. It’ll land at the agent layer and it will also land at the base of the stack. It’ll land in what we call the hyperscalers today. [00:07:15] Greg Sarafin: Nvidia will join them, I think XAI will probably join them, maybe Oracle will. Mm-hmm. And you’re gonna have these platforms where, from the data center, floor silicone, all the way up to the top layers of the stat. It’s completely owned by these major players and you’re gonna run your workloads on those stacks. [00:07:32] Greg Sarafin: Right? So it’s a very dystopian world. Yeah. Uh, it’s gonna feel like we have five different purveyors of IBM mainframes. Uh, but that’s the world that we are betting on in terms of how we think about how our business is gonna evolve. [00:07:46] Vince Menzione: So sas, SAS will go away in five [00:07:47] Jay McBain: years. I’ll, I’ll say that, you know, that the fight that the public fight in the last couple of weeks between Mark Benioff and Satcha at Microsoft has been about. [00:07:55] Jay McBain: Yeah. You know, software kind of ate the world. And then AI eats software. It’s not that eats the software, it’s eating the model. The idea when you don’t have as many tasks people out there is you don’t have to buy as many subscriptions. And when Salesforce starts charging you $2 per outcome or per conversation in Agent force, that’s a different model. [00:08:16] Jay McBain: But if you’re already spending $150 for the subscription and then you start looking at your bill and you’re getting the $2 hit. At, at some point, you know, wall Street, you’d love to say Wall Street, we’re gonna charge people $300 per person. Yeah. And it’s just not gonna happen. The subscription prices are gonna start to come down to the people that could actually go in and create reports and do analytics, do intelligence, but that’s, you know, 10% of people that might ever need to go in and log in. [00:08:41] Jay McBain: That’s the head of, of the model, the ui, ux on top. What, uh, Greg is, is talking about, and it’s absolutely true, is that 90% of people are not gonna need that head. Because your copilot or your agent force or whatever agentic AI piece is not gonna come log in and pretend to be you. It’s going in the back door. [00:09:00] Jay McBain: There’s the data, but it’s not gonna know what to do with the data. I mean, with 250,000 pieces of SaaS out there, there’s no way that these big models are gonna understand how the data is structured and how, how they could use it. Yeah. So the workflows that you build on top of the data layer, you know, if you own a channel software text, you know. [00:09:20] Jay McBain: Stack company, you’re gonna, well this data and this data and this data we connected and this is the value. And boy is that valuable to the sales person, the marketing person, the CX person, the product person. And that’s the co-pilot’s gonna talk to a co-pilot and behind the scenes be able to bring that value at the right time. [00:09:37] Greg Sarafin: They all really blow your minds. Imagine a world where you as a manager have 10,000 agents on your workforce, and then you have a digital twin of you. You can call it a copilot if you want, but it’s really your digital twin that is the interface between you and those 10,000 agents because you as a human being, cannot manage 10,000 agents, but your digital twin can. [00:09:58] Greg Sarafin: Your digital twin can then talk to you at human speed, which is a fraction of the speed of talking to those agents where you need to make a decision or you need to be aware of something. Right. So this is a business architecture that’s quite, uh, interesting. Uh, and, uh. We can talk about this at the bar tonight perhaps. [00:10:16] Greg Sarafin: ’cause I don’t think you want to take the conversation this direction. I you’re, anyway, I probably don’t wanna go there. I would just add [00:10:20] Janet Schijns: one thing. Yeah, go ahead. I think if you talk about where your C-suite and your board is having the conversations, they were promised something by the industry. They were promised by Microsoft and other 30% reduction in staff. [00:10:33] Janet Schijns: That’s what they were promised as the outcome of ai. So as we talk about agents and we talk about digital twins and we talk about everything else, there is a check. That was written for technology that the C-suite and the board are not yet seeing a payout for towards that. Hey, we get there, we buy all this meta stuff, and then nothing happens. [00:10:53] Janet Schijns: Buy all this AI stuff, right? What’s gonna happen next? This is where the people come in. The people are resisting the change at certain levels, particularly in the partner ecosystem. As an example, if you have 375,000 partners, why isn’t the first place you look for a digital twin? Your channel leader? Yeah. [00:11:11] Janet Schijns: Your channel leader can’t possibly scale, right? But that’s not the conversation they’re having. They’re having conversations about, hey, especially we could cut 30% of accounting. So that’s again, where you need to change that conversation at the C level in the company to make sure that you’re doing the right thing. [00:11:27] Janet Schijns: It’s gonna magnify growth rather than just cost savings with ai. And I think that’s where the break is right now. [00:11:33] Vince Menzione: So how do we solve for the break? Yeah, [00:11:35] Janet Schijns: well, I would, I was in the channel. I would put together a group of people, you know, think of class action lawsuits, but we’re not gonna sue. Um, I would put together a group of partners and get them a way to communicate to your board and your C-suite. [00:11:47] Janet Schijns: Their voices are being masked, their voices are being shut down. They’re being treated like transactional partners and they’re not. And, and so all of the C-suite and the board is relying on a group of people that don’t know anything about partnering as they make these large decisions. And so they’re bringing in experts that sell the technology, but those experts that sell the technology are telling them things that won’t even work for the actual go to market model we have in our own environment. [00:12:17] Janet Schijns: And so if you’re a channel leader listening, if you’re a partner listening, start reaching out to the board. Start making your decisions about who you partner with by who they have on their board. I look at the boards of some of these companies. They have no one that even understands sales or marketing, much less the channel. [00:12:33] Janet Schijns: They’re hiring channel leaders, partners, CPOs, that have no partnering experience because they went to college with them and they’re friends with them. You need to have the discussion. You need to take a Michelle McBain, and I’m looking at her right here in the front row, who’s an amazing channel person and, and have her voice heard. [00:12:51] Janet Schijns: Have my voice heard, have Jay’s voice heard. Right. Have all of Vince’s voice heard. Get the voices heard by the C-suite and the, and the, and the entire board, or honestly, I think they’re gonna go in the wrong direction. Yeah. Uh, and, and it’s gonna be very damaging. And, and again, I’ll repeat myself from earlier, those are gonna be the companies that fall off the Fortune 5,000, much less the 500. [00:13:11] Vince Menzione: I I do think there’s a skills gap and I’ll, a massive skills gap. And I’ll, I’ll look at the end there. Greg is a, is an example of somebody who brought financial chops into the board, right? Mm-hmm. And I think that one of the challenges we talked, we’ve all talked about this conversation. That the, the path to chief partner officer today looks like somebody who was a channel leader, who became a channel chief, who just took on the title chief partner officer, maybe has some cred in at the C-suite and maybe doesn’t. [00:13:39] Janet Schijns: Right. Right. [00:13:39] Vince Menzione: And that I think is, I think that’s one of the biggest challenges, is that nice [00:13:42] Janet Schijns: titling change and will make you believe that you’re important. And even though we do 80% of our sales through you, you’re not really important. And that’s the conversation you need to push that conversation. If you’re a partner listening to this, you need to push that with your top vendors, suppliers, ISVs, and if you’re a ISV vendor supplier, you gotta push that with your C-suite, push that with your board. [00:14:02] Janet Schijns: You are not listening. You’re, you’re not, and you’re running past your partnering and it’s gonna, it’s gonna really damage these firms that don’t really adapt because AI is, is great, but only if you apply it to the right place, which is your predominant go to market, your channel. [00:14:16] Vince Menzione: I know Jay and I had this conversation, maybe it’s two years ago now, right? [00:14:19] Vince Menzione: About the the new skill. Do you think we’ve, we’re seeing the new skill set apply generally? Because I don’t, I don’t know if I agree we have [00:14:28] Jay McBain: No, I agree with Janet and I spent a lot of time again Yeah. Boards. Yeah. And you know, looking and they’re very impressive people, you know, getting called into these big reseller boards, you know, there’s the head of United Healthcare, there’s the head of Boeing. [00:14:40] Jay McBain: I mean, these are people with ridiculous resumes. And really rich and famous and, and everything else. And I’m looking around the room going, you know that, that’s different. I go back to Janet’s originally original concept. And this isn’t just the technology industry. These are all 27 industries grappling with this. [00:14:58] Jay McBain: Yeah. Uh, one of the things that jumped out to me like two years ago when Apple was doing an iPhone launch, like later in the broadcast, you know, Tim Cook kind of stood up and said, do you know that 79% of people today will not buy a car unless it has Apple CarPlay? I’m sure he meant to say Android Auto as well. [00:15:15] Jay McBain: But imagine, you know, just switch gears and you’re in this $3 trillion auto industry, you know, 63 brands, 365 cars. Yeah. But it’s 120 year old industry. You’re just taking over a dealership from your great great grandparents or passing it down and because of a tech integration you’re missing, you’re about to lose four fifths of your buyers. [00:15:36] Jay McBain: So this isn’t just SaaS companies, right? This isn’t just marketplace. This isn’t the rich getting richer. This is every industry to Greg’s point has to lose kind of this ui ux on top. And I want my copilots talking to my pharmaceutical company, my pharmacy. I want them talking to my, um, all the industries I work in, um, or live in every day. [00:15:59] Jay McBain: And that’s part of every board. Yeah. Great. And I’ll say that there’s a 90% miss. Yeah. In terms of people that will be able to enunciate that and bring it up as a topic of. Critical importance, tectonic shift, inflection point is the best and quickest way, you know, into a board absolute or into a C-suite. [00:16:17] Jay McBain: And right now is absolutely the time. Yeah. [00:16:20] Jay McBain: Yeah. And I would [00:16:20] Janet Schijns: say, I know board seats are at a, you know, there’s not a lot of board seats available. A board advisor, you know, it just get to the point you saw J slide had 117 consultants in it. There you go. 117 people plus the top channel chiefs. That could be an advisor to your boards. [00:16:34] Janet Schijns: Absolutely. And I think the skill gap is just widening and it’s, it’s concerning. [00:16:39] Vince Menzione: And why isn’t it happening? [00:16:40] Greg Sarafin: I think it’s because we continue to conflate small P partnering with Big P partnering. Yeah. Mm-hmm. [00:16:47] Greg Sarafin: So small p partnering is partnering equals go to market equals channel one equals effectively indirect selling, right? [00:16:54] Greg Sarafin: Um, we forget that not every company is a platform company, but if you’re a platform company, you will not be a success. And by the way, platform not just top out, you know, my favorite platform company is Rebi. Go to Home Depot. Bloody thing is a huge platform. It’s a battery platform with an amazing assortment of tools. [00:17:09] Greg Sarafin: And I’m a tool geek, right? They’re auto, Tesla is a platform. Yeah. Right. So you know, generally in this world, you’ve got platform business models and vertically integrated business models. There’s probably an oversimplification, but if you’re running a platform business. Partnering is not just about channel, it’s also about co-innovation. [00:17:27] Greg Sarafin: It’s about co-investment and it’s about extending your platform through an ecosystem of partners and then being an outstanding orchestrator of that ecosystem, right? Which to me is really the center of gravity for partnering. ’cause that also then connects you back to the other side of partnering, which everybody forgets about, which is OEM partnering. [00:17:49] Greg Sarafin: Right. I drive my car, I’ve got my Apple car play, but I’ve got my RO seats. I’ve got my Brembo brakes. Right. This is not a new concept, folks, right? Right. But we’ve somehow, we’ve made partnering small p and I’ve been in many organizations where they have multiple partnering functions, not talking to each other, not realizing they all should be connected to maximize the flow of value through that value chain, and also reducing the number of partners they have. [00:18:13] Greg Sarafin: Because I gotta tell you how many people, they think more partners equals more revenue. That is completely the opposite of the truth. Fewer strategic partners equals more revenue. Everybody else should be on your platform. If you’re a platform company orchestrated in your platform ecosystem, when it comes truly to partnering, it should be a very short list. [00:18:31] Greg Sarafin: So to me, that’s the issue we have and we’re not explaining that to boards. Yeah. And we also frankly don’t have like a CPO if I said, okay, what is the role of A CPO and what is the career path to CPO? And I asked 10 smart people, I would get 10 completely different answers guaranteed. Maybe 11. ’cause one would change their mind extremely. [00:18:50] Greg Sarafin: Right? I pick that one. If I asked 10 PE those same people, what’s the role of A CFO? I get very similar answers, both in terms of the role and the career path, [00:18:58] Janet Schijns: and you know what that says to me. We don’t really have cpo. We don’t have CPOs. Right. The CPO isn’t actually a member. That’s right. The C-suite. [00:19:04] Janet Schijns: It’s a glory title we gave because we thought it might raise our throughput production in the little P by 10 or 15% to have a CPO. Ooh, maybe they can sell a little bit more next year. And I have to tell you, if you’re working with or working for a company, that that’s how they’re talking about the channel. [00:19:18] Janet Schijns: I like that little PI usually call it transactionally. Um, if that’s how they’re talking about the channel, you should run because your career is at risk. If the channel is about just distribution your, your career is at risk. That company’s going nowhere. It really should be integrated into the fabric of your company. [00:19:36] Janet Schijns: Where I would say back in the day, there was a quote from the head of Kellogg and he said, you could take everything we have and leave me the brand and I will survive. And I would say, now you can take everything I have and leave me the real partners and I will survive. And that’s the mindset that they need to get at the top of these companies. [00:19:54] Janet Schijns: Yeah. [00:19:54] Greg Sarafin: Which they don’t. Speaking of channel. Go ahead. Just one last point on channel. And channel is kind of like super sweet sugar cereal. Mm-hmm. Right? It tastes really good and it has no nutrition. In fact, it’s making you sick. Mm-hmm. Okay. For the most part. Mm-hmm. Uh, everybody needs a little cereal now and then, don’t get me wrong, [00:20:15] Janet Schijns: yes. [00:20:15] Janet Schijns: Sunday morning. There are two. [00:20:16] Greg Sarafin: There are two issues with over indexing on channel in your enterprise. The first is, um. You lose fidelity on your revenue forecast and if you’re a public company in particular, but even if you have, you know, LPs and gps that really care about your business performance on a quarterly basis, not being able to forecast your revenue because too much of your revenue is un forecastable is a really bad idea. [00:20:38] Greg Sarafin: Second thing is, particularly if you’re in an industry like tech, where it’s actually not the first sale that matters, it’s the renewal that matters. Selling through the channel typically has a much lower renewal rate than selling direct with customer success. Right. So your, your channel feels good because you’re moving some of your cost of sales. [00:20:57] Greg Sarafin: You’re making it invisible as cost of revenue, as effectively a discount. It’s only two or three points of discount, but then you add a bunch of cost of sales on top of it because now you’ve got a whole team that’s trying to define with those wooden sticks what the actual revenue forecast is gonna be from each of your channel partners. [00:21:14] Greg Sarafin: Right? And we’re heading to a world where the productivity of direct sellers is about the 10 x. Right, because autonomous CRM, what is it going to do is gonna eliminate all of that layer of sales enablement. People that suck at their jobs and can’t enable pretty much anybody, and are a huge drag on expense ratio, expensive cost to sales or sg and a to revenue. [00:21:37] Greg Sarafin: And it is going to now create sellers that actually you can expect to have 10 times the quota that they had yesterday, right? In three years, let’s say. So you actually need to be thinking about. Channel as don’t eat too many of those cocoa puffs, particularly given that you’re about to see a step change in the productivity of your direct sellers in terms of their ability to address the market for you. [00:21:59] Greg Sarafin: Then I’ll stop. I’ll just, uh, I’m gonna jump in on [00:22:02] Greg Sarafin: that. I thought that might get right. I thought that might get right. It’s [00:22:05] Jay McBain: provocative, so I’m gonna disagree with the. [00:22:15] Jay McBain: To determine how their customers buy your category or your industry dictates to you. Uh, I mentioned cybersecurity. If you went with your advice and ignored the 91.6% of customers who bought through channels, you’d be competing in 8% of your tam. If you sell PCs, 70% are bought through Larry and the white van. [00:22:36] Jay McBain: If you decide that Larry and the white van’s not good for you, you’re competing with Dell for the 30% direct. Market by market. There’s 2200 categories on G two crowd of categories that are all predetermined by your buyer and procurement and how it works. Yeah. So your channels, you wanna participate in a hundred percent of your TAM if, if you can. [00:22:57] Jay McBain: And you wanna participate in all the ways that money changes hands, whether it be indirect, marketplace or direct. And that’s one muscle. That’s small. P partnering. That’s the part I agree with. The bigger P partnering is, I’d love to partner with the other six people That’s right, who are doing the co-selling co-marketing, who are doing the consulting design, who are doing implementation integrations. [00:23:18] Jay McBain: That’s right. Who are lowering our cost to acquire the customer who are building bigger deals and closing them faster, and who get us a customer for life. If I can take those six and equate them back to my revenue targets, which is what boards and CEOs and CFOs care about, and do that in a repeatable, reliable way. [00:23:36] Jay McBain: That is the big P partnering. And by the way, every company has to do both. [00:23:42] Janet Schijns: Yeah. So, hey, I’m gonna, so I don’t know if you guys think I should sit between them or like. [00:23:51] Janet Schijns: I’m gonna, so here you go. I’m gonna do the thing. I’m gonna reconcile the two views, right? I think they’re both, I think they’re both right. Yes. [00:23:58] Janet Schijns: So on on the one level, we are seeing a seed change in reliability and how partners, because many of the partners are not commercializing the offer, it’s very hard to figure out, particularly in the enterprise and large multinational space. [00:24:12] Janet Schijns: When the deal’s coming in, if you’re not working it. That’s why folks like I’m looking right here at Partner Tap at Cassandra, that’s why they’re having so much sex success because that integrated selling model is how people are really understanding how they’re gonna get the master kind of massive opportunity from enterprise by doing it with direct and indirect as the old school thing would say. [00:24:31] Janet Schijns: But then to Jay’s point, um, if you don’t do that, if you don’t partner with partners, um, you start to have conversations that sound a lot like funnel reviews. At the C-suite, which means, again, run from the company ’cause they don’t understand partnering. Because partnering is about integrating it through the fabric of your product development, of your enablement, of your sales, right, of your innovation, of your compliance, of your governance throughout the organization. [00:24:58] Janet Schijns: It because it’s 90% in security, it ought to be a core element of your operating model. And if you have flow charts in your company, I always challenge people with this and those flow charts don’t show where the partner tap partner spot is in every single area. Then you are not in partnering, you are in [00:25:15] Vince Menzione: channel [00:25:16] Janet Schijns: to my friend’s point here, channels. [00:25:18] Janet Schijns: So you’re [00:25:18] Vince Menzione: eating Cocoa Puffs, you’re eating Cocoa [00:25:20] Janet Schijns: Puffs, and you’re gonna be disappointed every quarter because unless you have a, a small business kind of package that you know, you get your volume and that kind of even got your, your forecast, you’re being disappointed every quarter. You’re never gonna able to what’s coming in. [00:25:34] Janet Schijns: And they’re friends and they’re gonna hug later. [00:25:38] Jay McBain: I remember sugary cereals were always part of a nutritious breakfast, but you had to have the orange apple and the juice. Lucky Char with all the other stuff that made it part of a nutrition breakfast. Correct? Correct. [00:25:48] Janet Schijns: You had, you had the juice. Yeah. [00:25:51] Vince Menzione: Well, I also think that ignoring the business model in this conversation where Greg is. [00:25:57] Vince Menzione: At the very top of the pyramid. Right. Large enter mostly large enterprise, maybe some mid-market. And I’m, I’m not ignoring the other fourth ’cause you’re right on the channel versus partnering piece. Absolutely. But also as you get higher up in the stack and you have the luxury, I would say, of resources attached to each of those customers that are driving the, the executive level conversations. [00:26:20] Vince Menzione: It’s different than a channel that may or may just come in and accelerate or juice your revenue for a period of time. Right, right, right. Yeah. And I [00:26:27] Greg Sarafin: do tend to buy as big, right in my thinking, right? ’cause I’ve been a big company for a long time and my statements are not meant to address every market segment. [00:26:35] Greg Sarafin: And I do agree with Jay actually, that there are certain companies in certain market segments for, in today’s market, must address the market through channel. They have no choice. I’m also suggesting that the way the world works today and the way the world’s gonna work in five years may be very different. [00:26:50] Greg Sarafin: And so I’m front running that a little bit and there’s no way to know if I’m right or wrong. I’m just telling you the bet we’re making. Yeah. Yep. [00:26:57] Vince Menzione: Let’s, that makes sense. That makes sense. Let’s dive in on that. ’cause I do, you know, you, you, you touched on a AI and AG agentic, and I’d love to see how we talk about this. [00:27:07] Vince Menzione: Like for the hyperscalers in the room. How are we thinking about partner development managers? How are we thinking about partnering in general? We have so many, we’re still using Excel spreadsheets for crying out loud, and we’re doing funnel reviews and we’re having conversations with account executives that are going nowhere because they’re overwhelmed with what they have to go drive with partners, with a group of partners. [00:27:29] Vince Menzione: Again, for every one of their customers, they have to rely, they have to talk to at least seven seats. They have to have all these conversations. They can’t really navigate it. How does AI help us improve that? Like how do we, how do we get better at that through ai? [00:27:43] Greg Sarafin: Uh, I’ll tell you, uh, the perspective that we, we have right now, uh, we believe that we and a lot of our large clients, but I would extend that to any, any customer honestly need to get serious about taking the people cost out of revenue production. [00:27:59] Greg Sarafin: Yeah. Uh, revenue production either needs to be through marketplaces and other automated mechanisms of. Commerce, uh, or it needs to be highly productive sellers, either in your direct sales force or in some channel partners direct sales force. Right? Uh, the cost of sales enablement at most companies, including mine, is outrageously high when you then index it to the benefit you’re getting. [00:28:25] Greg Sarafin: Mm-hmm. Right? I can tell you that I run a, an awesome team of partner development and partner operations people, most of whom I’ve moved offshore. Over the years and then put ServiceNow and other technologies underneath of them to automate all their, I’ve made them TaskRabbits, I suppose. Yeah, to my earlier point, uh, because there was no off the shelf software, we had to build all our own, uh, to satisfy the needs of our business. [00:28:51] Greg Sarafin: That has been reasonably successful. But at any given time, I can only address the needs of maybe 3% of my total sales force across the 160 countries that we operate in. And it is not sufficient. It is too expensive for the benefit we’re getting, and it’s not scalable. I need something I can scale at zero marginal cost to cover 100% of every selling opportunity to any given time, whether it is a partnering selling opportunity and or a selling opportunity where I need to have a deep understanding of a solution that we’ve developed, maybe with a partner, maybe not, right? [00:29:28] Greg Sarafin: So to me, the answer is. All of sg and a that is not direct revenue. Production needs to move to agent capabilities. Mm-hmm. To enable all of sellers and our average bag color should, should have ultimately have 10 x the quota they have today if we do it right, that is our, that is our view and that is our bet on the future of. [00:29:54] Greg Sarafin: Selling it, you [00:29:55] Janet Schijns: know, at least in our shop. Yeah. And we’re seeing the same thing in partners, right? Yeah. The larger partners across the, whether an SI and MSP of, of Iron work or var, right? Um, they’re starting to look at AI and where it can eliminate friction in the system, um, more than where it can eliminate headcount. [00:30:10] Janet Schijns: So instead I wanna repurpose that headcount to build the next great product to sell the next great product to go 10 x um, you know, our revenue, the issue is. That everybody’s doing their little piece products. It’s kind of like when we started putting things in the cloud. Everybody, every single department in a company bought an extra large cloud. [00:30:28] Janet Schijns: Um, they didn’t really need it, but they bought it and they all swiped credit cards and usage rates were going crazy and right. And all of a sudden, at one point in time, the CFO was like, what is happening? Why are our IT expenses so high? Um, and then they consolidated back into centralized it again, right? [00:30:44] Janet Schijns: We’re gonna, we’re gonna manage all the cloud. We’re seeing the same thing starting to happen now with the AI journey across, um, in the partner community, particularly where a lot of pet projects have happened. Um, and they’re not really what’s important. And I’m gonna use a specific example that’s on that chart. [00:30:59] Janet Schijns: You shared the telecom industry. I was the, you know, chief channel officer at Verizon. Um, there’s a massive expense. To run pipe if you actually want an enterprise to have all this great stuff we’re talking about ai, cloud service, the whole nine yards to actually work, it actually has to connect. Um, and so that has been really left behind to a certain extent because the cost is so high, it could cost you $5 million to put a vertical riser in a corporate building. [00:31:26] Janet Schijns: Right. And so what’s happened, innovators have come around like broadband, GPT, who have said, you know what? We can do all the build function up until the person puts the pick in the ground, right? To dig the permits, the sizing, the everything with with ai, and that’s going to not eliminate hundreds of installers and hundreds of engineers. [00:31:49] Janet Schijns: It’s going to mean that rather than waiting nine and a half months on average for an enterprise network. You are going to get an enterprise network in a month. Think about what this does for your level of innovation. So it’s not just a snazzy, pretty hyperscalers and ISVs that are gonna use ai. It’s the the toasters, right? [00:32:08] Janet Schijns: The, the plumbing and it’s gonna get faster and faster. And that pace of speed is what we’re all gonna be measured on. Are we as fast as ai? [00:32:16] Jay McBain: Let me, let me do a real life channel example, uh, in agentic ai. So in the 28 measurable moments. That a customer moves through from, I have a problem to making the purchase and, and how to measure those. [00:32:29] Jay McBain: In today’s world, uh, we live as the products on the internet. So the world of buying buyer intent data, those early moments. And what did they search for? 81% of customers start on Google or now, you know, chat, GBT. Um, where did they move from there? What did they find on Google? Well, they found an ebook, they found a podcast. [00:32:50] Jay McBain: So it’s those early moments. You know, both Google and Facebook have created $6 trillion of value on us being the products and the internet. When you speak in your kitchen, Alexa overhears you and Facebook serves you up an ad two minutes later. That’s 6 trillion of value on the stock market. Yeah. Yeah. [00:33:06] Jay McBain: So we kind of all went to elections last year, 45% of the world and 90% of the incumbents lost. [00:33:14] Jay McBain: And we kind of told our, our elective uh, representatives we’re done with that. So the end of the cookie. It’s creating the biggest change in those 28 moments ever. Another tectonic shift, right? So Google goes and Creeds version two of the cookies, goes to sell it to the European Union, which are the toughest people to sell to, and failed. [00:33:33] Jay McBain: A week later, they lost an antitrust suit in the us. So this was kind of the final, you know, moment. So when you start to look at those 28 moments, especially early, you start to say, well, how am I gonna get to them? Who owns the moment and how do I partner with them? So you use Partner Tap as a perfect example, which is perfect agent, right? [00:33:51] Jay McBain: Not only looking at the two CRM systems for SQLs, but looking at the marketing automation systems for uh, M qls. That’s right. But if I could go and have an agent say, you know, Hey, they, you know, found your ebook, they listened to your podcast, they come to my website and they actually came to my event. You know, just between the two of us, we found four of the first 10 moments. [00:34:11] Jay McBain: Yep. Boy, would it be a great time either digitally or physically. Ushering the customer through the next 18 moments to make sure that we both win. Yeah, absolutely. And in this new world, it’s not just partner Tap. Now I, I have to have an attribution tool. I have to have my, uh, to, uh, my, um, through channel marketing tool. [00:34:28] Jay McBain: I have to have my deal registration tool, my opportunity passing my LEAP app. So here’s like five or six things that I can’t go log into all six and go figure out for a particular deal. All the stuff that’s happening. But boy, could my copilot or my agent go and tap into all these places, put it like in cohorts [00:34:46] Janet Schijns: and Perfect. [00:34:46] Janet Schijns: Yeah. Yeah. [00:34:47] Jay McBain: Um, scenario of, oh my goodness, I’ve now seen 14 of the first 28 moments. I know exactly the customer who they are. I know exactly what they want, and I actually know the seven layers of the stack and the seven people that would be perfect for this. Let me orchestrate the 14 things going on, and let’s go win more deals, but I can’t do it without these layers. [00:35:09] Jay McBain: And I just, in the headless world, I gotta have this data and, uh, be able to execute, you know, within milliseconds. [00:35:17] Greg Sarafin: I’ll also, uh, use a real example. I’ll use us. Uh, we’re working right now with, uh, several of our largest partners and a third party, none of whom I’ll name, uh, at the innocent. But, uh, so here, here’s, here’s the thing we’re solving for, um, in order to replace partner development. [00:35:38] Greg Sarafin: And make it scalable. I wanna say it differently. To make partner development scalable, we need to be able to scale it with ai, not with people. It’s not scalable with people alone. Mm-hmm. [00:35:48] Greg Sarafin: Um, now I could build a bunch of AI on my side, but in order for that AI to really work, it also has to be able to then do work. [00:35:59] Greg Sarafin: And my partner’s systems of record as well. Well, guess what? My partners love me, but not that much. Mm-hmm. [00:36:05] Greg Sarafin: They’re not gonna let me go trade, send around in their patch. Right. And by the way, I have the same view of them. So what we’ve determined is we actually need to work with a trusted third party to sit between us to build the agents to our specifications. [00:36:18] Greg Sarafin: That’s right. And those agents can work both sides of the street, literally. So they understand all my business rules and all of my constraints and, and how to access my systems of record, including my CRM, uh, et cetera. And then they also understand the same thing about the other sites, and they also understand the translation later. [00:36:36] Greg Sarafin: And they also know how to enable my sellers and their sellers to work together, even though they’ve never, they’ve never, never done that before. Right? So that is really where we’re hyper-focused right now, is how you create that sort of. Agent force to use Benioff’s term that works both sides of the organization, but protecting my data from them and their data from me, right, in order to accomplish and then really take the cost out and make it infinitely scalable to do partner enablement. [00:37:05] Janet Schijns: I love that. And that sounds too heady. If you’re listening, uh, here and the audience are on, you’re like, that seems we’re talking headless. That seems like a lot. Okay. But it seems like a lot to do. Right? Um, the simple thing I’ve encouraged people to do is go out and look at the seven or eight. Big partners that you have in your stack, right? [00:37:23] Janet Schijns: You know, maybe your checkpoint for security. Who else is in your stack that a partner would sell? And I know the guys from Unifier are here. They’ve built a cool platform as has Partner Tap, to let you actually integrate with those other parties, the third parties, [00:37:39] Janet Schijns: right? And, and maybe you start there, right? [00:37:41] Janet Schijns: Maybe you start at the very practical, like, hey, if a partner just didn’t have to. From a go to market transactional standpoint, register a lead in nine platforms, maybe that would get us more business. Um, you know, and maybe it would because maybe you’re kind of a pain in the neck to deal with. Um, and so those kinds of platforms that are just saying, Hey, let’s make it one motion for our partners, rip out to Greg’s point, that sales enablement issue where you have to have 10 people just to interface with systems. [00:38:07] Janet Schijns: That’s where you’re gonna see it. And you know, we see this at AV point. Now look, I’m biased, I’m on the AV point board. DS is here and he’s the best marketer in the world. But AV Point stood up one day and said, we’re gonna put a channel expert on the board. We’re gonna go hard at helping the MSPs with their business. [00:38:24] Janet Schijns: It wasn’t about the revenue, but the revenue followed. Right? When the MSPs saw the dedication, the, the things that at Point was doing to simplify their. Life to simplify their business, to help their business make money. The business came with it because the bottom line is partners do vote with the quote, right? [00:38:44] Janet Schijns: They’re not gonna quote you unless you’re a good partner. Um, and while we can sit up here and say, Hey, it’s not gonna be about transactions, it still is half about transactions. And so I would say that the better partner you become, and AV point has demonstrated this, the more and more business you get, the more your partners grow, the more your partners become the top Microsoft partners, because that’s the ecosystem that AV point is in. [00:39:05] Janet Schijns: The more the partners start to use you more and more in their business, the better partners they become. The more big companies now wanna be your partners and integrate into your stack, right? It really comes down to saying, I’m gonna put the revenue over here, as uncomfortable as that sounds. I’m gonna put it over here and first I’m gonna be a good partner and then I’m gonna get the revenue. [00:39:24] Vince Menzione: So I love what you have to say about a point. And, and Ducks is gonna be on a session in a little while talking about marketplaces. In fact. So I, we haven’t really touched on marketplaces in this conversation. We have two of the three are here in the room talking about marketplaces today. So I think it’s a really great, like we have $419 billion in durable cloud budgets today, right? [00:39:48] Vince Menzione: Why, why isn’t it moving as fast as it? I believe it should. I don’t feel like it’s moving as fast as it should. Partners are selling [00:39:54] Janet Schijns: against it. That’s my final answer. Okay. [00:40:00] Jay McBain: It it’s that there’s a couple layers to the answer. Yeah. Uh, one is that 82% compounded growth is nothing to scoff at. Right. That’s almost doubling in size every year. [00:40:10] Jay McBain: Yeah. AWS became a top 10 distributor in less than two years. A distribution business has been around 40 years. Mm-hmm. Agree. It took them two. Agree, agree. And that was top 10. Now we’re starting to talk about them as a top five, right. Joining TD Cynics Ingram, who are 60 and $50 billion distributors bigger than Nike and Coca-Cola and Starbucks and McDonald’s combined. [00:40:33] Jay McBain: That’s the size we’re talking about. That’s pretty fast. And that’s doubling almost every year when you add the agentic models. It continues to grow even faster than that, [00:40:44] Vince Menzione: but how much of it is fulfillment on private offers versus net new revenue? That’s, that’s the question I have. The thing that [00:40:50] Jay McBain: doesn’t change that quickly, which, which you know, is procurement. [00:40:54] Jay McBain: Procurement and large enterprise, especially procurement. In the government, 56% of our industry is enterprise. Mm-hmm. 44% is SMB does turn faster. Right. But SMBs are not buying cloud consumption. No. So to go to the procurement divisions, uh, and the government is getting dozed pretty quickly. Yes. In terms of how they buy. [00:41:16] Jay McBain: In other words, they’re turning everything off. Now. It’s a verb. I like it. And getting everything turned on. So we saw yesterday that, you know, Gartner just got like $5 billion of business shut off by the federal government. Yeah. And nobody looked to see if there was creating value and why, and who and where. [00:41:31] Jay McBain: And all they said is, it’s all off now. It’s canceled, and now you’ve gotta go reapply for the money. Mm-hmm. [00:41:37] Jay McBain: And so it’s just a kind of a 50% cost savings. But procurement is in, you know, dog years. Yeah, yeah. And that’s why it’s happening. And procurement, what you feel is slower procure and procurement has the [00:41:47] Janet Schijns: relationship with who? [00:41:49] Janet Schijns: The partner. Right. We’ve seen this 70 plus percent of the time they’re buying through the partner. The services is leading the sale inertia. So now when you try to push that to the marketplace and cut the partner out, and I’m sorry, with all the love in my heart to the hyperscalers, you are trying to cut the partner out. [00:42:02] Janet Schijns: You can talk to me about your partner program and what you’re trying to do and how you’re helping, but it’s not true. 50%, right? Exactly. It’s not true. You’re not integrating the partner into your marketplace play. So you’re forcing the partner to do the only thing they can, which is sell against you. And then the next thing they’re gonna do is find an alternative and we can smile and say, we’re too big to fail, but the hyperscalers are not too big to fail. [00:42:24] Janet Schijns: We have seen big companies in our industry fail before. So the hyperscalers that get it right. That. Get the partner to understand how it works in their business and how they can use and place orders in the, in the marketplace. Use it as part of their thing, lower their costs, because they’re putting their customers through marketplaces. [00:42:43] Janet Schijns: That’s the hyperscaler that wins. [00:42:45] Vince Menzione: I think we’re gonna hear some of that later. [00:42:47] Greg Sarafin: I’ll just give a slightly different take on marketplace. Different perspective, I suppose. So I, I don’t know where marketplaces end, but I can tell you they have already had a massive impact that may not be as visible to many of these. [00:43:00] Greg Sarafin: Uh, so in our business, you know, we, we sort of go to market by industry and then by buyer, right? So the, the head of, you know, uh, insurance operations at, in the insurance industry. And so it used to be for years that we had a partner ecosystem curated around that buyer. With a bunch of different technology products that we had pre-integrated together, and that was sort of our easy button offering. [00:43:26] Greg Sarafin: Now, if you wanted to piece part it out, that’s fine. We would do that for you too, but we always would come with an easy button. What’s happened with the marketplace is it is so dramatically changed buying behaviors. We had to actually create three versions of that ecosystem. One for the Microsoft stack, one for the Amazon stack, and one for the Google Stack, because clients want the draw down. [00:43:47] Greg Sarafin: That they get through the marketplace. Mm-hmm. And so if you go to them with an ecosystem that has something that can only be drawn down in Amazon, and it’s a Microsoft, it’s a Mac, that that client has a massive Mac and they need to draw down there, that’s gonna be a losing value proposition. So those marketplaces from one perspective are extremely, uh, successful from my per ’cause. [00:44:05] Greg Sarafin: They are shaping the winners and losers around each of those stacks. And then that has a wash back effect on us because we now have to support three different versions that’s right, of ecosystems for each of the solutions that we bring to market. So that’s a different take. I’d share with you all. [00:44:21] Jay McBain: I’ll take, uh, just three reasons why looking forward of all the trends coming together. [00:44:26] Jay McBain: One is the new buyer. 51% of our buyers now love marketplaces. Yeah. [00:44:30] Jay McBain: The second reason is all the models, subscription consumption, and now micro consumption over the next 10 to 20 years. Favor. Marketplaces. Absolutely. [00:44:40] Jay McBain: So this is, you know, your buyer creating change. This is the marketplaces. The one thing I haven’t talked about, which is a major trend is the new buyer, which is finops. [00:44:49] Jay McBain: There’s a new set of people, there’s 24,000 of them now that are 50% trained in tech and 50% trained in finance, and they’ve been employed now between the CFO and the CIO originally to kind of move around hyperscaler workloads to save money. Then moved out to kind of edge to cloud. Hey, should we run, run this on that old Dell server ’cause we, you know, could do it cheaper. [00:45:11] Jay McBain: And now they’re expanding into this agentic ai, which is the cost to the organization of tech, of every company in the world is outrageous. And the boards and everybody else have a laser focus on it. And now there’s somebody that’s trained on both sides and these, if you go to finops.org and, and study this model, these people love marketplaces. [00:45:34] Jay McBain: It this commit, the $419 billion of commit is coming out of Fin Ops because I don’t want shadow it. That’s right. I don’t want managers putting things on credit cards, bringing in security risks and other things. I don’t want our pub, our data going out to public clouds consolidate. This is becoming a center where the CFO and the CIO are both gated. [00:45:55] Jay McBain: And they are reporting up to the board [00:45:57] Vince Menzione: consolidation. Yeah. Yeah. I wanna open up the, I’m sure there’s gonna be a lot of questions and we have a short period, short window time. Mm-hmm. Uh, but for, for the studio audience, they’re gonna get more time with you all later. But questions I, I see. Is anybody up at the mic or anybody have any questions they want ask? [00:46:14] Vince Menzione: I’ll ask you to go to the mic though, if you can, Erica. [00:46:21] Audience: Well first I feel personally attacked by the comment, um, around the nine different platforms. ’cause I work at Microsoft, so it is a pain in the butt. Oh, thank you. Uh, that was not my question though. Um, earlier, uh, mark and I, I don’t know where he went, but we were chatting about some companies are actually, they are not, they’re drawing a line in the sand when it comes to ai and they’re, they don’t want it. [00:46:46] Audience: And I started to really think about that. And I’m just curious, you know, are what your thoughts are. Are those folks just doomed? You know, are they gonna have to pull it together or should there and could there be an uprising of people that are like, listen, we have got to make some changes here. Not just for compliance and safety reasons, but for human reasons. [00:47:11] Audience: And I’m just super curious on your thoughts about that. [00:47:14] Jay McBain: Yeah, I, I, I can take a stab. Two things to look at is, um, the integration first fire. And if, you know, a certain company in my stack, personal or professional life doesn’t wanna play and my co-pilot can’t go and do the work I need and I have to manually go and do things, I’m gonna stop by kinda like today, if, if somebody doesn’t take, uh, my version of payment. [00:47:38] Jay McBain: I, I find a new place to shop. Mm-hmm. Yeah. Mm-hmm. So that’s kind of the, your customers are gonna force the change on the integration first world. And then, you know, one thing I didn’t say is 50% of the Fortune 500 fail, and over 20 years, 71% of tech companies fail that aren’t in the Fortune 500 and can’t buy their way outta problems. [00:47:59] Jay McBain: 71% fail within 10 years. Yeah. Yeah. So what creates, you know, change? And if you’re not playing in this stack. And if you’re not having that agent and data model that you can add value, you, you know, this is, I, I can’t see a way forward and that’s why this is different than I ot and it’s different than other changes. [00:48:19] Jay McBain: It’s just the way we’re evolving, uh, as a society and the way we’re evolving in business to, I do agree [00:48:27] Janet Schijns: though that there’s going to be a, not a reckoning maybe is too call of a word. You know, back to the Arnold Schwartzenegger. Um, but there is a, a movement among younger people, gen Z, particularly back to the basics, back to hands-on loving bookstores, loving record stores, loving experiences. [00:48:46] Janet Schijns: And I do think that especially in SMB, if you think about shopping local, there’s gonna be a huge return to anti-technology to places you can go and get away from it. Where the robots won’t be, where there won’t be automation, where like actual humans talk to you. I, I represent this myself. My daughter has a PhD. [00:49:03] Janet Schijns: She was in research analyst in this industry. She’s dropped out of this industry and she’s opening an independent bookstore. Why? Because that’s where the money is for her long term. That bot’s gonna replace her as a research agent, and she sees it and she talks to her friends, and she knows that’s where the money’s gonna be in the local community. [00:49:22] Janet Schijns: So I think in the local community, you’re going to see an anti AI kind of sentiment in small business. [00:49:30] Greg Sarafin: Uh, I’ll just do a quick, quick take. Uh. First, I think co-pilots were certainly the place to start, but we’re never gonna be successful because changing the ways people work is super expensive. Nobody wants to spend that money, especially for somebody that does not have easily quantifiable benefits, which co-piloting does not. [00:49:47] Greg Sarafin: Uh, we are a use case for that at my firm. Uh, the second is that in general, companies want to have big returns that are measurable. Not little returns. And so if they’re gonna allocate capital, they don’t allocate capital. They, they, they have capital projects to make big changes to the equation of their value in the market. [00:50:09] Greg Sarafin: And so genic technology, when it is fully mature, I think will be that break point where you’re really gonna start to see capital allocated in large chunks to then change the way the enterprise operates. [00:50:20] Audience: That makes good sense. Yeah. Alright, [00:50:23] Audience: I have a question. We have a question. I have a question for Greg and then I have one thing. [00:50:26] Audience: So, Greg, you talked about how, you know, with agents, sellers, we’re gonna have fewer sellers. They’re gonna rise to the top, but, and, and the channel’s basically gonna go away. Totally disagree here. And I’m wondering, you know, with agents and looking at channel account managers, partner account managers. I mean, it’s the same thing on this side of the house too, on the partner side. [00:50:53] Audience: There’s so much coming out, so much technology coming out that’s gonna do the same job on the sales side as the partner side and trim that fat. But these channel relationships, like the seller, needs to have the needs to have those relationships. But I see fewer channel account managers, fewer partner account managers, fewer sellers, but we’re using agents to really get the right people to the dance for the relationships. [00:51:27] Greg Sarafin: Yeah. I don’t believe channels going away. My point was fairly, it didn’t make it well. Okay. It was trying to be a little provocative here to get him going, but, uh, I like to get rise. [00:51:40] Greg Sarafin: Yeah. Is you gotta think about your balance. Mm-hmm. And you also have to take to account as this genic technology makes your direct sellers much more effective. How do you rethink allocating cost of sales that way where you have much higher likelihood of draw down and renewals as well as potentially a better customer experience if you do it well? [00:52:02] Greg Sarafin: Right. That’s my only point. You’re still gonna have channels and all this is gonna play out. But my point is start thinking about what is that balance? Because the calculus is gonna change a bit for a whole lot of reasons, including how channel will evolve, right? [00:52:16] Greg Sarafin: Right. And these mechanisms like marketplace, not other things. [00:52:18] Greg Sarafin: So I’m just, the only point I’m really trying to make to you is think carefully about your entire go-to-market calculus and realize that direct. Done correctly with this technology can be a much more powerful way to shape the future of your business revenue plus, [00:52:38] Janet Schijns: oh, and I just have to say, no. I’m so sorry. [00:52:40] Janet Schijns: I really do like you. But yet you have thousands of partners who sell seven to 13 solutions to the customer. You are one solution If you are thinking about your direct team, right? You’re one solution. Yes. I would really focus first on empowering and automating and streamlining in your partner community. [00:52:59] Janet Schijns: Because your direct sales team is much smaller. Um, and then you can apply what you learned in your partner community to your direct team. So I’m just gonna flip that on its head a little bit, um, because I think the efficiencies are more from your partner community that you can get them from your direct team. [00:53:12] Janet Schijns: And again, some 28-year-old that comes in and swears he owns Bank of America, doesn’t own Bank of America, the partner probably does [00:53:21] Vince Menzione: final answer. [00:53:27] Vince Menzione: And I wonder, but I have to keep us somewhat on time. Let’s do it. So, uh, I wanna thank each of you, uh, it was really a provocative conversation, which is what I was hoping for today. So we’re gonna have some more talk and then there was a question about marketplaces and ai, and I’m gonna ask one of either Microsoft or Google to answer that question for Jeff Chewy, who is in the live stream and asked that question. [00:53:49] Vince Menzione: Thank you. So thank you so much. [00:53:57] Vince Menzione: Thank you for joining this episode of Ultimate Guide to Partnering, and if you haven’t done so already, mark your calendars. Ultimate Partner Live Spring is coming to Redmond, Washington on May 1st and second. This is going to be an incredible event like each of our ultimate partner events. This one is going to be just a little bit better than the one before. [00:54:18] Vince Menzione: We’re having incredible leaders from Microsoft industry leaders talking about co-selling. Marketplaces aligning to Microsoft priorities and more. You don’t wanna miss this event. Sign up today before seats run out. up today before seats run out.

Jay McBain, an industry analyst at Canalys renowned for his insights on tech trends, dives into the future landscape shaped by AI. He discusses the seismic shifts influencing the partner ecosystem, emphasizing the immense investment in AI and the necessity for vendors to adapt to changing buyer behaviors. McBain highlights the rise of 'micro-consumption' and the importance of engaging the 'seven trusted partners' surrounding customers. He encourages businesses to transition from traditional sales models to strategic partnerships, aiming for growth in a rapidly evolving market.

Jon Yoo, CEO of Suger, Joins Ultimate Guide to Partnering What is the future of B2B sales in the new landscape of marketplaces and AI? Jon Yoo, CEO of Sugar, joins us to discuss the evolution of B2B sales and the rise of hyperscaler marketplaces. Subscribe to our Newsletter: https://theultimatepartner.com/ebook-subscribe/ Check Out UPX: https://theultimatepartner.com/experience/ https://youtu.be/q_81pmJct2Q Jon Yoo shares his insights on how companies like Snowflake are leveraging these marketplaces to drive significant revenue and streamline operations. Discover how Sugar is empowering businesses to embrace a consumer-like buying experience, simplifying complex deployments, and automating workflows for greater efficiency. Jon also delves into the future of B2B sales, highlighting the growing importance of AI and microtransactions. Learn how Sugar is staying ahead of the curve by investing in AI-driven solutions and catering to the needs of both buyers and sellers in this rapidly changing landscape. Key Takeaways: Hyperscaler marketplaces are transforming B2B sales: Companies are increasingly leveraging these platforms to drive revenue and streamline operations. Sugar is simplifying complex software sales: The company is bringing a consumer-like buying experience to B2B by simplifying deployments and automating workflows. AI is playing a crucial role in the evolution of B2B sales: Sugar is investing in AI-driven solutions to enhance efficiency and provide valuable insights. The mid-market presents a significant opportunity for growth: Sugar is focused on empowering mid-sized companies to leverage the power of marketplaces. A unified approach to sales channels is essential: Sugar enables businesses to manage all their sales channels, including direct sales and marketplaces, seamlessly. The buyer side of the marketplace is often overlooked: Sugar is addressing this gap by providing tools and insights to empower buyers. Partnerships remain crucial in the B2B landscape: Sugar recognizes the importance of collaboration and is working to enhance co-selling and bundled offerings. Continuous learning and adaptation are key to success: Jon Yoo emphasizes the importance of staying intellectually curious and embracing new technologies. Don’t miss this opportunity to gain insider knowledge from industry leaders shaping tomorrow’s digital world. Tune in now for an inspiring conversation that could redefine your business strategy! Registration NOW Open!!! Register Today! TRANSCRIPT Transcription: Jon Yoo Audio Episode [00:00:00] Jon Yoo: But I think the most untapped potential is in the mid market space where, you know, maybe one of the kind of players who worked at, you know, one of these mega enterprises that we’re doing that has tremendous success goes to work at, you know, a smaller company, as I mentioned before, and they’re bringing that motion, that playbook. [00:00:18] Jon Yoo: to drive marketplace for them. I think that’s very interesting. [00:00:23] Vince Menzione: We believe this time is like no other. We believe, we refer to these as the tectonic shifts. [00:00:29] Intro: All the hyperscalers in the world, if you add them all together, managed services will be one and a half times larger. [00:00:34] Vince Menzione: Because it is the customer buying behavior that has created the need for all of us to rethink our models. [00:00:41] Intro: Until we have data quality, the effectiveness of AI cannot be realized, and effectiveness of the partnerships cannot be realized. Can you figure out first what your purpose is and how Microsoft can support your purpose and how you can support Microsoft purpose? Now we have a partnership. It’s the ultimate partnership. [00:01:01] Vince Menzione: Welcome to or welcome back to the Ultimate Guide to Partnering. I’m Vince Menzione, your host. And my mission is to help leaders like you achieve your greatest results through successful partnering. Today, I’m excited to be joined in the studio by a leader who’s leading some of the change we’re seeing in this world of marketplaces and hyperscaler co selling. [00:01:20] Vince Menzione: John Yu is the CEO and co founder of Sugar, an innovative company that’s helping leading some of this incredible change and growth, and I’m excited to have him here in the studio. [00:01:31] Jon Yoo: John, welcome to the podcast. Thanks so much for having me Vince. And by the way, what a great event last night. [00:01:36] Vince Menzione: Thank you. The whole day was amazing. [00:01:38] Vince Menzione: So for those of you who haven’t watched or listened, we have the Ultimate Partner Winter Retreat is on our YouTube channel as well as this. So I encourage you to go there and watch what an incredible session. So many great leaders in the room, including yourself. Well, we, I feel privileged to get to know you a little bit better these last couple of years. [00:01:56] Vince Menzione: Uh, we met, I think it’s almost two years now. Yeah. Yeah. And, uh, you were just kind of at the early stage of, of starting up sugar. Right. Yeah. Kind of like two garage kind of thing, but it was really, you were very at the early stage and I really want to spend some time learning about you, your company, your journey, and where you hope to take this market. [00:02:15] Vince Menzione: So I thought we’d start there. Like what was the inspiration behind Sugar and talk, talk to us about that journey to this role as the co founder and CEO of Sugar. [00:02:23] Jon Yoo: Yeah, definitely. So I guess if I rewind it back all the way, you know, I, I’ve wanted to be an entrepreneur since I was 16. So my, my first job, I don’t know if I told you this, but, uh, first company was around like led technology of, can you print these like, uh, display chips, so to speak on a pliable surface. [00:02:42] Jon Yoo: Turns out no one actually wants. Uh, a fricking phone screen on your, like, ski jacket. Uh, so that’s always like, you know, they say a founder is like first, you know, product is, you know, based on technology and then you work your way backwards to the problem. And in this scenario, you know, we really started with the problem. [00:03:00] Jon Yoo: And part of that came from my time at Salesforce, where we saw just how complex these systems can be and workflows can be when you start to expand to multiple channels. But it’s really my co founder and CTO, Changjun, who had the idea and really felt the pain deeply. So, you know, he worked on, he was at Facebook for a bit, was at, you know, worked on AI at Google for a little bit. [00:03:20] Jon Yoo: And then he ended up at Confluent, where he was the tech lead of their marketplace product, you know. And they were doing 40, 50 percent of their revenue through, through these hyperscaler marketplaces. I mean, they were feeling the pain. They had roughly 10 engineers and, you know, tens of ops people, whether in the U S or offshore that was actually helping to, to manage this channel. [00:03:42] Jon Yoo: And so he really felt the pain point, um, deeply and thought, Hey, not everyone has to The, the payroll, you know, to, to go hire 10 engineers and multiple house people to manage this. So why not? It’s very complex. It’s super complex. Yeah. [00:03:56] Vince Menzione: And for those of our listeners or viewers who don’t understand, tell us a little bit more about what Sugar’s mission is and what you, your organization does. [00:04:03] Jon Yoo: Yeah. I mean, super high level. It might sound a little, you know, cliche, but we really want to bring a consumer experience to B2B sales. And we see that these hyperscaler marketplaces is really the best wedge. Uh, for us to, you know, kind of see this, you know, marketplace like activities where, you know, I, I always wondered why can I go on amazon. [00:04:24] Jon Yoo: com and pick up, you know, cameras here or, uh, bed sheets and be able to compare different products, uh, as any consumer does. And, you know, like the, the one click purchase now, and you can have it delivered to your door. Uh, we really want to bring that experience into. You know, if you want to deploy a database, for example, how can you actually do that with one click of a button, uh, where all the procurements, the deployment is, is handled through these marketplaces. [00:04:49] Jon Yoo: And so amazing benefits. We want to bring it and democratize it to like every single B2B software company in the world. [00:04:56] Vince Menzione: Very cool. You know, we talk about at Ultimate Partner, we talk about the tectonic shifts, incredible change and transformation going on in our world, right? Our lives are shifting weekly. [00:05:05] Vince Menzione: It seems, right. We talked about. Uh, deep seek moment that is already past us and, uh, Stargate and all the investments that are going on. Just, just the way the world is rapidly changing. We also talk about marketplace moment quite a bit. Oh yeah. And the role of the hyperscalers. And I still feel that a lot of organizations come at this thing called partnership at it from the wrong angle. [00:05:27] Vince Menzione: And they miss the fact that I say three sets of rails, and maybe it’s more than three sets of rails, but the hyperscalers really with the level of investment. The hundred billion dollar type of investments annually that they’re making each in this world and then driving it around marketplaces that this is a moment that I feel that not enough people are embracing the right way. [00:05:49] Vince Menzione: Would you agree? [00:05:50] Jon Yoo: I would think so. Um, it’s not like, like, for example, with AI, you know, there’s a chat GPT moment where everyone just saw the value. I mean, I mean, it took you 15 minutes to start playing with it, to realize what the possibilities are. And the tectonic shift was immediate. I think marketplace, um, shift or like adoption has been a lot more gradual. [00:06:10] Jon Yoo: I mean, of course this exploded over the past couple of years, but these hyperscaler marketplaces have been around for 10, 12 years. Um, but it’s really only in the four, the past four or five years where you start to see, you know, the marketplace moments where you have companies like Confluent, you know, there has been earnings reports of like CrowdStrike doing so much. [00:06:30] Jon Yoo: I mean, Snowflake, one of our customers was. The first across a billion dollars in AWS marketplace revenue alone. And so I think we’re starting to get to the early majority. Um, we, I’ve seen it personally over the past two, three years where, you know, in the past, it used to be like the, the top, like a hundred companies are doing majority of the marketplace transactions. [00:06:50] Jon Yoo: And we’re actually seeing a ton of early stage startups, you know, growth stage startups that are actually. Starting to really adopt marketplace and, you know, drive all their upsells and renewals through it for all these benefits. Not just like commit drawdowns, but actually leveraging, you know, the speed of delivery or the fact that you can have flexible billing and you don’t have to worry about, you know, debt collections. [00:07:11] Jon Yoo: If someone goes out of business or some, you know, or they don’t want to pay. And so. It’s been super exciting to see that gradual evolution, and hopefully we can play a huge part in accelerating that adoption. [00:07:20] Vince Menzione: I’m glad, I want to tease out what you just said here too, because I wanted to emphasize this. We had this moment where five companies crossed a billion dollars aggregate in transactions, right? [00:07:32] Vince Menzione: And it looked like we were on a greater path, but when you peel back on some of those, it was really the fulfillment, right? They were private offers, these were big contracts, uh, and they were just taking it through fulfillment, uh, through marketplace. To burn down on the commitments. Yeah. But it wasn’t this organic thing. [00:07:49] Vince Menzione: Yep. And you, what you’re discussing now is this, like, how do you organically get at it? Yep. How does a company that maybe is just, uh, just got to product market fit? And they’re taking their product to market and it’s a great product. And how do they utilize the marketplace to drive awareness, to drive buying behavior and for that, those customers burn down, I guess. [00:08:09] Vince Menzione: And I think that’s what you’re talking about. [00:08:10] Jon Yoo: Yeah. I mean, talk about like the moment of marketplace. I actually think that, um, you can kind of break it up into a couple of pieces. I mean, private offers coming in really led to major adoption. I think you’re starting to see the hyperscalers, uh, really think about the PLG emotion. [00:08:25] Jon Yoo: How do you actually. You know, drive like trials and POCs and discoverability really through these marketplaces. And, you know, if I pick, you know, a new functionality, for example, AWS came out with like the buy with AWS functionality where, you know, you can actually, um, embed like the little button into your exact website where you’ve already constructed the website to capture all the foot traffic. [00:08:50] Jon Yoo: And so it’s kind of taking the power of marketplace. Uh, what’s the right word? Like everywhere? Yeah. Extending it. Exactly. Extending it. Instead of actually just curating this storefront where you have to drive for traffic too. And so we get very excited about that. So I, instead of saying like age of marketplace, I’d actually say like age of marketplace PLG, because that’s, that’s the future that I get super excited about. [00:09:13] Jon Yoo: Not just, you know, draw down on, on, uh, cloud [00:09:15] Vince Menzione: commitments there. So you just had a seminal moment, I would say. Congratulations. You’ve raised 15 million series. A, uh, how do you plan to utilize the funds and how are you thinking about your growth? Hmm. Uh, [00:09:29] Jon Yoo: carefully, uh, so that we don’t run, you know, they always say the CEO’s job is to make sure you don’t run out of money. [00:09:34] Jon Yoo: Um, so I, you know, we’re certainly not just like going out and, you know, Buying you didn’t get a Lamborghini. Yeah, absolutely not. Absolutely. We put it all on Bitcoin. I know. Yeah. Um, [00:09:45] Vince Menzione: that might’ve been a good thing a few months ago. [00:09:47] Jon Yoo: Yeah. Yeah. Yes. Uh, that’s a whole nother story. I might need a cocktail for that. [00:09:53] Jon Yoo: But, um, You know, we really think about it as investing in R and D. Um, we’ve, I think we have semblance of product market fit, but that’s costly evolving rates. Competitors catch up. The cloud providers aren’t, aren’t stopping anytime soon around, you know, making their own kind of native experience better. [00:10:10] Jon Yoo: Um, and so we’re, you know, we’re going to try to hire a ton of engineers and we are already doing so, uh, to invest. Not just in our core product offering around Marketplace and CoSell, but invest in a lot of AI use cases that we’ve been thinking about for the past two years. We just haven’t been able to, you know, there, there’s all these table stake functionalities that we need, we need to like set the foundation for. [00:10:31] Jon Yoo: Um, and then there’s so many other things around the buyer side of Marketplace because, you know, you talk about, okay, how do we, you know, I think we can shape seller behavior, but it, you know, sellers want to meet the buyers where their budget is and where the ease of transaction is. And I think there’s some level of. [00:10:48] Jon Yoo: Market disequilibrium, where it’s a lot easier for sellers now that sugar’s around and some of our competitors, you know, but the buyer side is still very ignored, so to speak. Um, you know, when, when we talk to our customers who are trying to sell into a mega enterprise, they always talk about, man, it’s really difficult to find, you know, who the right. [00:11:07] Jon Yoo: Like budget owner is, or who the right person who can actually accept the private offer. They struggle with figuring out, you know, let’s say you’re a Walmart and you have. 10 billion committed across the three cloud providers. How do you know which cloud to procure through? Um, if they have 10 different business units, do they have specific, you know, budget for, you know, third party purchases through these cloud commitments? [00:11:30] Jon Yoo: Um, it was the approval workflow because that also sits outside of, you [00:11:33] Vince Menzione: know, kind of their direct approval because you have to go through the procurement process that might be very, especially in a Walmart, exactly. A whole different building than the campus. [00:11:41] Jon Yoo: Exactly. Um, and so we really want to bridge the gap and. [00:11:44] Jon Yoo: And ultimately, once we are able to fulfill both sellers and buyers, we’re able to provide a lot more data and insights, uh, you know, that kind of fulfills the vision of what we’re looking for, of how do we recommend, you know, what type of products to purchase or bundled offerings, et cetera, et cetera. [00:11:59] Vince Menzione: Yeah. When you described to me too, you know, this is why co selling is so important, right? Because they become your Sherpas in a way, because if you are a buyer, You’re working with a cloud provider, absolutely relying on your account executives, your account, their account executives are then relying on the partner tech team and their own organization that are then crossing over to the partner and trying to navigate this journey, which can be very complex. [00:12:25] Vince Menzione: And what you’re saying is you’re going to streamline some of that process. [00:12:27] Jon Yoo: Absolutely. We’re not, you know, similar to like this whole provocative death of SaaS. We’re not saying death of CoSell, you know, with, with this, we’re really talking about how do we evolve what CoSell looks like, you know, beyond just. [00:12:38] Jon Yoo: Hey, let me just go share a thousand offs and hope the spray and pray approach that, you know, a lot of people talked about yesterday. How do we actually make it a lot more intelligent, you know, based on some of these buying behaviors and account mapping and whatnot? Yeah. [00:12:50] Vince Menzione: So provocative question. You’re at the first to market, right? [00:12:52] Vince Menzione: Yeah. Some people call them enablers or marketplace platforms. Yeah. Uh, you came at the problem after a couple other solutions were out there. How did you think about the problem differently? Yeah. And how do you uniquely solve for it today? I [00:13:06] Jon Yoo: mean, first and foremost, we Have tremendous like respect for our competitors and competitions get, you know, it deflates prices and it makes us better, makes us move faster. [00:13:17] Jon Yoo: And I certainly tried to use that to motivate the team around like, Hey, if we’re not moving 10 X the speed of some of our competitors who have a lot more funding, we’re screwed. Um, but you know, I think we have a lot of second mover advantage because. We got started after a lot of these APIs were available and, and, you know, based on changing his experience from Confluent, he knows where a lot of the skeletons are buried, and so we were able to rearchitect it from the ground up to be very API first. [00:13:42] Jon Yoo: So what I mean by that is, you know, I think about it as, Hey, let’s unify all the channels. So an offer is an offer, regardless of whether it’s through AWS or direct or GCP, et cetera. And what that allows you to do is you can build a workflow on top of it. Where you can trigger a series of actions based on any events from marketplace, regardless of which partner it was. [00:14:06] Jon Yoo: And so like, you know, if you, if you kind of talk about, Hey, we can do bi directional lead sync or send offers or, you know, recognize revenue. It’s not that hard and a lot of people can do it. And that still requires a ton of manual effort by different teams. And I think about like in the life cycle of a transaction, there’s like, you know, opportunity management. [00:14:27] Jon Yoo: So like there’s co sell, you know, product that really helps with that. The entire quote to cash process of how do you actually, you know, have an AE that, you know, co sells, but all, or, you know, as part of a co selling motion, but also has to go figure out the account ID, blah, blah, blah. Uh, have a handoff to deal desk or ops or whoever’s managing that process to send an offer. [00:14:47] Jon Yoo: And then, you know, once the offer is sent, like there’s a level of workflows of, you know, reaching out to the end customer, making sure internal teams are aligned. And then once the offer gets accepted, like there’s a bunch of system things that needs to happen, whether it’s updating a field in Salesforce, uh, sending the metadata to, you know, your ERP solutions like we, or NetSuite a lot, uh, so that they’re not double invoicing the end customer. [00:15:11] Jon Yoo: And so all this work, all these workflows are things that, um, people do manually today. I was going to say, well, manual process. Yeah, [00:15:19] Vince Menzione: it’s very, the complexity is astounding. Actually, you described it. [00:15:22] Jon Yoo: Totally. I mean, it’s, there’s whole like products and companies built around these processes and none of them extended to marketplace. [00:15:28] Jon Yoo: And so how do we actually, you know, just sending an offer, for example, uh, is really the beginning part of a very. Long, complex process. And so based on that offer, how do we trigger everything so that people don’t actually have to do manual work? And again, just focus on selling and not having these like siloed operations team having to, you know, send a hundred private offers, you know, in the last day of the month or quarter and freaking out because. [00:15:56] Jon Yoo: You know, we’re having to like enable all of them to even understand what a private offer is and things like that. I think that’s the key to, to removing the adoption and, um, or sorry, removing the barriers to adoption of marketplace. [00:16:08] Vince Menzione: And then I think I heard you say, like, you streamlined it and it’s sort of like one set of tools and then the APIs and signals all come into the one set of tools versus maybe building out on AWS and building out on Google, then building out on Microsoft app. [00:16:23] Jon Yoo: Yeah, totally. Um, it’s, you know, we always talk about like unified experience, um, because the experience that I had with Salesforce was just every new channel has different APIs or requirements or policies, or oftentimes different teams working them. And then there’s usually a team that sits horizontally across these channels, whether it’s IT or ops that are just like pissed off, you know, to be frank, you know, and the sales people don’t care. [00:16:48] Jon Yoo: They just want to close the deal. Absolutely. And so, you know, while we actually serve. Sales and partnership people like frontline, you know, facing customer facing partner facing folks, the, the real power users we found of our product are kind of the, the unsung heroes, so to speak, like deal desk and rev ops. [00:17:04] Jon Yoo: Yeah. [00:17:05] Vince Menzione: And those are the people that have to deal with the complexity all day long. Exactly, exactly. The tough jobs. Yeah. Yeah. So, uh, a lot of talk about AI and how AI is going to help us. And then also these, uh, microtransactions and AI, agentic AI. What trends do you see or foresee in the future as this world evolves around marketplaces? [00:17:25] Jon Yoo: Yeah, I mean, couple things. One is, uh, I start with, there’s a lot more self hosted deployments that we’re seeing. So, you know, you think about pure SaaS where it’s all running in your cloud and then like hybrid SaaS or, you know. Uh, whatever else, but we’re definitely seeing a lot more where, you know, the control plane might be running on X cloud, but then they have agents running in the customer’s VPC and because people are very, um, like guarded with their data, you know, we talked a lot about data security and governance yesterday. [00:17:57] Jon Yoo: And so that’s certainly a big piece that we’re seeing around marketplace. Like, you know, AWS, for example, there’s a lot more AMIs and containers that were. You know, getting asked to, to help with, for our customers. It’s a lot more complex to be frank with you than SaaS, but we’re also the only player in the market that’s doing it today. [00:18:12] Jon Yoo: Um, the second part that I’d see is more and more companies earlier on, um, like a lot of these startups. I mean, we came out at Y Combinator and we see AI agents is like 60 percent of every cohort, if not more. And they’re actually having a seminal moment around being able to break into enterprises. So maybe five, 10 years ago, not very common that these. [00:18:35] Jon Yoo: You know, early stage startups to enterprises. Now you have things like companies going from like 1 to 12, 1 to 50 million ARR, um, selling these eight. We’ll see how sustainable that is. Yeah, that’s wild. Yeah. That’s pretty wild growth. Yeah. But they’re leveraging marketplace earlier and earlier in their journey versus a couple of years ago where. [00:18:52] Jon Yoo: They might wait until they get to a certain level of maturity, uh, to actually leverage marketplace. So I think it’s very, very, um, it’s just awesome that, that people are deciding, Hey, we’re going to be marketplace forward from the get go. And there’s actually, you know, as adoption of this channel grows and people move jobs here and there, we’re seeing a lot more of, let’s say some grizzled veteran who have seen what marketplace at scale looks like. [00:19:17] Jon Yoo: They go work at a smaller company. And immediately the first thing is. I want to turn on marketplace because I had such great success. And so this cross pollination across different companies and different segment lines is, I think, a really good thing [00:19:30] Vince Menzione: overall for the industry. Yeah, it’s good for the growth of all. [00:19:33] Vince Menzione: Yeah. And I still come back to the 420 billion in durable cloud budgets. And yeah, so underutilized. That helps. It’s a huge number. It’s the TAM is incredible. So you talked about some customers. I was kind of interested from a partner or customer because the partner. We talk about the word partner and partners are actually customers of yours. [00:19:50] Vince Menzione: And you mentioned Snowflake. I’m just kind of interested on Snowflake because they’re, they’re evolution. They’re a huge player. They’re a platform company. Mm hmm. Like what did they, what did you see from them and what have you seen from the best of the best that you’ve worked with? [00:20:03] Jon Yoo: Yeah, it’s, they, they certainly invested a lot into the tooling. [00:20:06] Jon Yoo: So they had a teams like aligned to, I mean, when you get into an enterprise, it’s not just Snowflake, but almost every company that we see verticalized around, around different clouds. So you have an AWS Alliance team, Azure Alliance team, GCP Alliance team, and then separate teams. Yeah. But then there’s a partner ops team that usually sits horizontally across all hyperscalers. [00:20:27] Jon Yoo: But even then they might have like kind of a business partner relationship. And, you know, what I saw Snowflake do is they invest a lot in automation. Um, so they built a lot of the tooling in house before we came in and just seeing the level of sophistication of like custom objects they created, uh, flows they created, um, is you kind of need that at that scale. [00:20:49] Jon Yoo: Yeah. And so when we talk to some companies who want to learn, you know, cause they always come in and saying, Hey, I want to learn what. X, Y, Z is doing that’s working out so well, right. I think one advice that I give all the time is just have the right tooling that best fits where you are in the maturity curve of marketplace. [00:21:07] Jon Yoo: So, you know, I’ll give you an example. Some people, you know, are very mature and they come in and they don’t have any automation set up and they have like 30 ops people. Literally going into the respective cloud portals, uh, which I’m just going to say it sucks. It’s terrible. Uh, no offense. Uh, and yeah, and you know, they have to have these business partner, like kind of subject matter experts, because if you’re very familiar in AWS console, but you’re not very familiar in Azure and GCP, does that mean that they should have to learn like three different consoles and Update everything in their own internal system as well. [00:21:45] Jon Yoo: So there’s a tremendous stress that it puts on those teams to scale. But then there’s also the flip side where certain companies come in and, you know, they, they see the power of our workflow builder and they’re like, we want to automate this, this, this, this. And I have to kind of, you know, say, hold, hold your horses. [00:22:01] Jon Yoo: Let’s, let’s get a couple of transactions first. You know, we can do it manually. Uh, and then we can start to automate away each pieces because. The way that I think about kind of, you know, not necessarily the world, but product is it’s a supply chain. It’s like, uh, I think about it as a flow chart of, Hey, um, let’s chart out exactly what the flow is. [00:22:20] Jon Yoo: And then one by one, we’ll, we’ll automate that away, depending on, you know, the level of impact or how much frictionless this process can get. And some people just want to come in and do the whole thing. And it’s like, it is not worth my time, your time, anyone’s time until we get the initial. [00:22:36] Vince Menzione: Well, we get, get an old conversation about process and process engineering. [00:22:41] Vince Menzione: And the fact of the matter is you, if you start inventing the process before you’ve actually taken through and shaking it out, you’re really not, you’re, you’re gonna have to go do it again anyway. Yeah. [00:22:50] Jon Yoo: It’s a, a lot of people in this industry talk about playbooks. Um, what’s the right co sell playbook or marketplace operate? [00:22:57] Jon Yoo: Like what does good look like, you know, effectively. And that’s where, you know, right now it does require some discovery, uh, for us to really tease out what is your float today and what’s the ideal state. I think as we evolve our workflow offering, we’ll be able to provide basically like a library or template of plays and temp, uh, you know, yeah, like plays that they can, they can choose, or they can, you know, describe in natural language, what they expect the float to look like, and all these notes can snap into place, or, you know, they can just pick out of. [00:23:30] Jon Yoo: You know, a list of automation that they want, that’s most common that we see as good looks like, and that hopefully should, um, make not just our own cost of service go down, but also provide a lot quicker time to market around the value offerings that we, we provide. [00:23:46] Vince Menzione: So you came in as the CEO and co founder, right? [00:23:49] Vince Menzione: You had a, you had a co founder who had, who understood the problem. What did you do from a startup perspective? Like, how did you think about it as the CEO coming in? What layer did you bring of the observability and change into the process? And then, and then what is the outcome been different maybe than where it was from the beginning? [00:24:09] Jon Yoo: Yeah, uh, I think the first interesting learning was, Hey, listening is valuable. Cause like with any startup or with any, you know, company just starting, usually starting the S and B space and then you move up markets and. That was kind of a goal from the get go, because when we actually started working with a lot of these earlier C startups, they, they want us to want to use us for listing. [00:24:33] Jon Yoo: But then, you know, we realized like we’re not getting the best feedback because they use our tool like once a month if they need to do a transaction. And yeah, you know, yeah, they give me a call and he’s like, well, a few a year. Yeah, exactly. And so then we, we. You know, went over to kind of the mid stage, late stage startups and, you know, volume starts to take up and they start to use our product more. [00:24:55] Jon Yoo: But it’s really when we started to work with like fivetrain, for example, that was doing not just a ton of, you know, marketplace private offers, but a ton of public offers, which we always shared a vision around like, Hey, this PLG motion, but also like billing and metering because they, you know, bill on a consumption based model. [00:25:12] Jon Yoo: And, you know, they had like a 10 tack Google sheets, uh, to. Like massage the usage of ads to, to actually convert to the right billable metric or billable output. Um, and so I’d say that that’s one, just kind of the decision to move up market. The second piece was coming from Salesforce. I, you know, one of my projects briefly was to kind of be the internal PM or like a PM for the internal business tools. [00:25:38] Jon Yoo: Um, like North America, like, like, uh, sales tooling initiative or whatever. And. I realized that people just do not want to ever leave like Salesforce, or, you know, if you use HubSpot HubSpot, um, those are not just a system of record, but it’s also where people like have all the reporting, they really operate their entire business out of. [00:25:59] Jon Yoo: And so the, the first like immediate action that we took outside of CoSell, which is what we learned from our space. Like everyone that does marketplace also CoSells. is we have to have the best native app experience, um, you know, so that people can work the way that they like, where they work. And so we immediately came out with a Salesforce app and we’ve just been iterating on that since the, the last. [00:26:20] Jon Yoo: Do direct interaction or. Exactly. And, and the last, you know, kind of piece that we learned was we thought that having just these being API first, like these unified APIs would. Um, be really helpful for a company like Confluent that has all these engineers who want to leverage these APIs. Turns out no one actually wants to use our APIs. [00:26:41] Jon Yoo: They just want us to do the work for them, which is why we actually, it was painful, but you know, for about six months actually worked on building the workflow refactor entire backend so that I can actually support this. Uh, that was painful, but you know, frankly, we kind of called it initially the improvisation tool because. [00:27:01] Jon Yoo: When we started working with these larger volume, you know, players, they would just come to us with XYZ features and Change and I are just like, holy shit. Like if we just keep building these features for these customers that all vary depending on their Salesforce setup or workflows, we’re screwed. Like it’s going to be a Frankenstein product. [00:27:19] Jon Yoo: Um, and so let’s build something that can abstract all that away and make it customizable to, you know, each respective custom, uh, companies and their very specific [00:27:28] Vince Menzione: workflows. So I have a pyramid, we don’t have the slide here, but I have a pyramid slide. And I talk about the very top of the pyramid being some of the largest software companies in the market. [00:27:39] Vince Menzione: And you can recognize some of the snowflakes up there and Google, uh, Cisco and some of the other real super giants. Yeah. And then there’s kind of the next layer down, which is sort of like the 750 to a thousand software companies. And then there’s sort of this mid market. Where do you see the growth? And then this down below, obviously the digital natives and some startup organizations, but where do you see the growth in that period? [00:28:04] Jon Yoo: Mid [00:28:04] Vince Menzione: market. Mid market. [00:28:05] Jon Yoo: Yeah. I mean, enterprise is not going anywhere, but I mean, if they’re already doing 30 to 50 percent of their revenue through these hyperscaler marketplaces. It’s kind of hard to grow that much more beyond that, but I think the most untapped potential is in the mid market space where, you know, maybe one of the kind of players who worked at, you know, one of these mega enterprises that we’re doing that has tremendous success goes to work at, you know, a smaller company, as I mentioned before, and they’re bringing that motion, that playbook, uh, to drive marketplace for them. [00:28:35] Jon Yoo: I think that’s very interesting. Um, and then. My, my, my hope is that as, you know, there’s a gentic AI and, you know, as companies start to convert to more of like a consumption outcome based billing model where, you know, cloud marketplaces have historically been very powerful in, and a lot of these consumption, you know, pricing models, uh, that they’re going to adopt it more and more, both in SMB and mid market. [00:28:59] Jon Yoo: Um, and so very optimistic about that future. But of course, we’re still, I think our product generally does best with companies with high volumes. [00:29:09] Vince Menzione: And you mentioned you’re putting a lot of the money investment into engineering. How do you think about the go to market strategy? What are you doing there to build awareness around sugar, uh, you know, deliver the right outcomes, revenue perspective for the company. [00:29:22] Jon Yoo: You know, we’ve been super fortunate to have just tremendously talented people join our company. Um, not just on the engineering front, um, but on the go to market side as well. So. You know, they’re all in on kind of sugar and this vision for the future. And it’s funny, like I was saying, like CS is actually the hardest role to, um, enable customer success. [00:29:48] Jon Yoo: Customer success is so hard to enable because, and we have, in my opinion, the best in the industry, but they. Have to learn so much across three clouds, across all the different modules, not just within our product, but like, you know, different programs that are going on at these respective clouds that are also always changing, you know, but from a go to market perspective, it’s really about like selling the vision around like workflows, we just help you accelerate revenue because you can access this amazing marketplace, um, with all these benefits and we help that, that access be very seamless and embedded into your core workflows that you already have today. [00:30:25] Jon Yoo: Um, but the other piece is like cost efficiencies. So it’s not just top line, but bottom line of, you know, do you want to go down this like complex path of a confluent where they have 10 plus engineers working on this, uh, for multiple years and it’s not like a one time set up and go. Um, and so we’re certainly investing a lot more there as well. [00:30:43] Jon Yoo: And not just around awareness of like sugar, but awareness of our space. Um, because I think. You know, we really want to become a thought leader, like, you know, some of the incumbent players out there who have been paving the way for us in many aspects. And, um, we can’t just make it all sugar, sugar, sugar. [00:31:00] Jon Yoo: It has to be about, you know, the cloud partnerships and marketplace. [00:31:04] Vince Menzione: So where do you see this going? Like the journey has been amazing. Uh, the next few years, is it, is it three years? Is it five years? Like what, what are the outcomes you hope to achieve? What’s the vision? [00:31:16] Jon Yoo: Well, this is getting recorded. So, you know, we want to IPO, uh, you know, and, and do this for 10 plus years. [00:31:21] Jon Yoo: Okay. Um, you heard it here. Yeah. Uh, it’s not about calendars. We’re not trying to, you know, be like a cashflow positive or of course we want to be cashflow positive and profitable, but. Um, we’re really reinvesting all of our growth back into the product, um, because we, we don’t want to just stop at marketplace and co sell. [00:31:38] Jon Yoo: Um, we want to make it like interoperable across every channel. Um, so that could be direct channel as well. Um, and what is unique about us is twofolds. Like one is we’re not just about us, but the space. Uh, one is we have the chance to work across. Every persona that touches, you know, uh, a stage in the life cycle of a transaction. [00:31:59] Jon Yoo: And so whether that’s at the opportunity stage with sales and partnership people, uh, throughout the whole quote to cash process, deal desk and rev ops, and the finance gets very involved around rev rec. And so there’s going to be different parts where we can go horizontal across all channels, not just marketplace and co sell, which we get very excited about. [00:32:15] Jon Yoo: But as I mentioned, um, the buyer side is the part that is super exciting to me because it’s untapped. There’s no one really playing that space. Uh, I’m sure competitors will rise, but that’s honestly good for the entire industry, so we welcome that. But the ultimate like, you know, vision that I see that, that I get very excited about is, um, that consumer experience to B2B sales. [00:32:39] Jon Yoo: And if you talk to any CIO of a company, they don’t buy the ROI analysis that sellers are putting in front of them. Or if they do buy it, it’s kind of murky, you know, and if you want, I’m a data nerd, so how do you actually bring a very data? Oriented approach, a very programmatic approach to procuring software. [00:32:56] Jon Yoo: Well, you know, if similar to how I can like buy or like be able to compare different products and all the feature specs, et cetera, where I can do a free trial and get like six different sheets, test it out and then return it with 30 day policy, I would love to be able to do that for a B2B where, you know, the business owner, their unit owner, um, is able to outline a PRD or the requirements that they want. [00:33:23] Jon Yoo: Uh, set a budget for POC across X, Y, you know, and we were able to provide the insights around, Hey, these are the couple of products that, you know, uh, people have purchased that fit these requirements and they can actually set a budget, you know, against those, you know, and that’s part of the things that we’ll, we’ll uncover with the buyer side. [00:33:39] Jon Yoo: Very cool. And, you know, once they actually trial it using our metering engine, they can actually define the outcome that they want to see and meter against that outcome to determine what is the product they should choose the best. And then we can send all this data. Around the outcome to price, you know, ratio to the CIO, CFO, CEO, so that they can make the best decision. [00:33:57] Jon Yoo: Um, and that’s super cool in my opinion, but we’ll see if we can get there. And I think it’s really about sequencing the product lines versus trying to do it all at once. How [00:34:07] Vince Menzione: do you layer in the partner ecosystem into this conversation? Cause I also, as, as you were describing this to me, I was thinking about the different partners along the journey that are part of the, you know, Jay likes to talk about the 28 moments. [00:34:20] Vince Menzione: And you know, you have partners on the front end, maybe doing consulting work. You have other organizations that are coming in as trusted, maybe it’s an SI, maybe it’s some other partners. And then there’s the solution, which in effect, isn’t usually just one solution. Totally. A lot of times it’s like grass security. [00:34:35] Vince Menzione: I’ve got data. Uh, I’ve got Kubernetes, other things I’m layering like Kubernetes and other things that I’m providing here. And maybe two or three. Yeah. And then I’m stitching it all together. Maybe I have an MSP on the back. How do you think about that layering into that discussion you just described? [00:34:53] Jon Yoo: Yeah, partnerships are not going anywhere and they are going to be the tip of the spear in driving this. So just because we provide any recommendation doesn’t mean that that’s it. You have to actually drive that outcome with the hyperscalers, for example, or, or, uh, You know, one of the big things that we see kind of trend or, you know, trend in this industry is like bundled offerings. [00:35:12] Vince Menzione: Yeah, that’s [00:35:12] Jon Yoo: right. So all the, you know, different cloud providers are realizing, okay, how do we factor in services or how do we have two different ISVs go to market together, you know, in this motion with these bundled offerings? And so partners are always going to be kind of at the intersection across. I think someone yesterday mentioned like, uh. [00:35:31] Jon Yoo: Partnerships, the intersection of like tech and relationship or something like that. Yeah. And I, I think that’s so true. Um, and if you see that this bundled offering of X and Y are going really well together, you’d expect the partners to be at the forefront of actually driving a, a joint go to market together. [00:35:47] Jon Yoo: Yeah. And of course with, uh, the top providers as well. Yeah. It’s exciting times we live in. Yeah, totally. Uh, it’s hard to see. What the future will look like completely. And I think every week to week, as we’re talking about before it changes, but, um, it’s super exciting. [00:36:03] Vince Menzione: So for our viewers and listeners today, they want to learn more about working with you, partnering with you, or maybe. [00:36:09] Vince Menzione: Uh, deploying sugar as a solution for their company. How do they do so? [00:36:14] Jon Yoo: Yeah. You know, reach out to me, you know, John at sugar. io, you know, John, without the H sugar with an E, uh, it’s like, say classy San Diego now, um, you can go to our website and, you know, just reach out to us, but, but truly I am all over my email, so reach out to me directly if you want to, uh, to join the growing team or of course, uh, leverage our [00:36:33] Vince Menzione: product. [00:36:34] Vince Menzione: And we have some rapid fire questions. I had some questions I want to ask you today before we, before we break. Uh, so what book is most influenced your work? Hmm. [00:36:44] Jon Yoo: Um, I do two pieces. Um, one is, um, like hard things about hard things. I think it’s a title with, by Ben Horowitz, you know, that’s kind of a very well known startup book, but. [00:36:59] Jon Yoo: You know, it kind of details the, the story of how everything can go wrong at a startup. And, and it does usually, it does, it, you know, the power might go out. Yeah. But you know, it’s painful. And when I think oftentimes, like when you’re from the outside looking in, everything seemed like it’s going smoothly, but internally it sometimes freaking sucks. [00:37:26] Jon Yoo: And, and you have to have uncomfortable conversations or handle crises or. You know, everything seems to be breaking. And so how do you actually keep a level head around it all? Um, and not, you know, lash out or be bannock or, or all these things. And just realizing like, this is part of the journey and this is not anything new. [00:37:45] Jon Yoo: Like every other company goes through some of these hardships. And also when you see some of the crazy stuff that happens in that book, it really tames what we’re going through in some regards. And so I’m like, okay, I always have a saying with the team. Uh, The toughest challenge is always ahead of us. So I’m not even worried about this at the moment. [00:38:03] Jon Yoo: Um, the, the second book is another cliche one a little bit, but atomic habits. Atomic habits. Yeah. It’s, uh, James Cleary. I have a tendency to just want, my eyes are bigger than my stomach in many regards. And I have all these like grandiose plans for myself and how to operate, but, you know, really thinking about how do I create this compounding behavior and. [00:38:26] Jon Yoo: That’s also very similar to building a culture at a company. You know, if, if you have a view on this is what greatness looks like and being a well oiled machine, like it, that doesn’t happen overnight. And so how do I set some of the structure and cadence in place so that we can start to build on that culture by, you know, building block by building block, same thing goes for product development, right? [00:38:49] Jon Yoo: Like, yeah, here’s the ideal state, but if you try to do it all at once, you’re. You’re, you’re usually going to come out with a pretty crappy product. Right. And so changing really believes in iteration, like little by little and just shipping it, you know, without like too much, like hand wringing. And, and, you know, we’ll learn pretty quickly and we’re going to iterate and fix any bugs or, or things like that. [00:39:10] Jon Yoo: So John, what’s one ABI you can’t live without? Honestly, uh, maybe it’s advice, but coffee, I have to have coffee when I wake up in the morning where I am just, you know, cause during the week I’m averaging like four hours of sleep and I just need, we have Celsius in the office, but I’d say, um, two, two real habits. [00:39:30] Jon Yoo: One is I try to get some exercise in, even if it’s 10, 15 minutes, I’ve been, I haven’t been the best about it over the past couple of years. Um, but I, I found that the, my, my mood and. My ability to think clearly does fluctuate a lot based on whether I just get my body kind of moving somewhat active. And so I try to bike to the office, I bike back, and so that’s, you know, 45 minutes to an hour. [00:39:53] Jon Yoo: Um, just You’re exercising. Somewhat. Yeah. Yeah, trying to. What about the sleep? Let’s talk about the four hours. Does it feel like that’s enough? Uh, but I try to catch up on sleep on Fridays and, uh, the weekend. As long as there’s not like a wedding or something. But, uh, it’s a The second piece, by the way, I’m pretty good at operating, you know, without sleep, but it’s certainly something where, uh, I can be a little bit more cranky, you know, if I’ve had like consecutive nights of, of, uh, pretty late nights of work and say the second habit, I always need to do this of, um, the night before the next day, I always review kind of my calendar, figure out what’s really important, figure out what I want to get accomplished that day. [00:40:37] Jon Yoo: If I just wake up and I have to go immediately into a call with like, One of our European customers and I’m like foggy and you know, you’re just in back to backs over and over again by, by, by like 4 PM you’re just like, I have no idea what I actually did. Uh, I was just a zombie work, uh, working through, so I’m trying to be very deliberate by reviewing that same thing with like going into a new week, right? [00:40:58] Jon Yoo: Uh, on a Sunday night, just making sure I know exactly, you know, what the, the goal for that week is. Um, and I try to, we’re trying to set better, you know, similar cadence with all of the leadership team on our team, uh, as well. Yeah. [00:41:11] Vince Menzione: Well, by reviewing the night before your subconscious mind works on it. [00:41:15] Jon Yoo: Oh, yeah. [00:41:16] Vince Menzione: They say that that helps. It helps in terms of like thinking through the problem and getting a solution before you start. [00:41:22] Jon Yoo: Totally. Or like, you know, if I know I’m walking into an important meeting, I have to do some mental prep of like, what are the three things that I really want to get accomplished out of this meeting? [00:41:31] Jon Yoo: If I just walk into it without having even like two minutes to think about it, [00:41:35] Vince Menzione: you’re, you’re, you’re just lost. You’re cold. Yeah. So is there a quote or a mantra that you, that inspires you? [00:41:43] Jon Yoo: Yeah, I, you know, I, I, there is a lot of moments from my days at Salesforce that was, I was so lucky to work with some phenomenally talented folks. [00:41:56] Jon Yoo: Um, and each kind of manager or boss that I’ve had have imparted some wisdom. So I remember, uh, my first manager was Mackenzie. Uh, I was probably a pain in the ass to, or a pain in the butt to, to, uh, deal with this angsty kid who, who wanted to accomplish a lot and do cool things. But she always said, John, like, I think she got frustrated at just all the different products I wanted to work on. [00:42:19] Jon Yoo: She goes. It’s, it’s a Venn diagram, you know, there’s a Venn diagram of what the company and the team needs. And then there’s a Venn diagram of like, or the circle of what you think is cool. You have to play in that little overlap or what the company needs and suck it up, you know? And I try to bring that type of mentality to our team as well, because we, you know, our chief of staff for him, for example, is incredibly ambitious and incredibly talented. [00:42:41] Jon Yoo: And so I always say two things for me, one thing for you, uh, but all three needs to be something that helps the company move forward. Um, I had another manager, Nick, who then this, I think about this every day of, um, you know, motivation is incredibly powerful, uh, and, but it comes and goes and discipline is what gets you through the day. [00:43:01] Jon Yoo: Yeah, absolutely. And so, you know, even if you don’t want to do something just like. You know, being disciplined about doing it is, is, and, and setting that like muscle memory is something that is incredibly important. And then finally, sorry, I know you asked for one quote, but I’ll do the whole chronology. [00:43:20] Jon Yoo: My old boss at Salesforce also was Denise Dresser, who is now like the CEO of Slack to have done amazing things, uh, since then. And, uh, you know, she said, uh, she really preaches radical candor. And so I’ve seen her just be incredibly. Like straightforward, uh, and honest with her direct reports around, Hey, this is what, you know, good looks like and asking very tough questions of why this has been done or not been done. [00:43:51] Jon Yoo: And it’s never emotional. It’s very like facts based object, uh, objective. And so I try to bring some of that into, man, into the team as well. [00:43:59] Vince Menzione: It’s good, especially in the startup world. Right. We have to quickly get to the solution to the problem. Yeah. Dilly dally in it. And you talked about like powering through the problem. [00:44:08] Vince Menzione: Like just power through, I think you talked about motivation, but that also helps with motivation, right? Cause when you power through an issue, like even when you don’t, when you don’t want to go do it, you get to the outcome and that kind of propels or helps motivate you to, to continue to do those things. [00:44:24] Jon Yoo: Oh yeah. It’s just a muscle memory. And I always say like, we have to get more at bats. And once you do, once you solve like one very problem, um, the next problem doesn’t seem as hard. Or. It doesn’t seem as daunting if the challenge is higher. So very cool. [00:44:39] Vince Menzione: So I have a favorite question. Okay. I asked this of almost all my guests. [00:44:42] Vince Menzione: It’s a favorite of mine and, uh, you’re hosting a dinner party, John. Okay. Um, you can host this dinner party anywhere in the world. We could talk about locations. It’d be very interesting to hear your point of view on that. And you can invite any three guests from the present or the past, this amazing dinner party. [00:45:00] Vince Menzione: Whom would you invite and why? [00:45:04] Jon Yoo: There are so many. Um, when I was young and I would answer this, or I guess I’m still young, but you know, in my teenage years, yeah, in my teenage years, I’d always joke like Kim Jong-un because yeah, it’s such a interesting character around, um, fascinating. Yeah, exactly. Yeah. In some ways, , but in reality, I’d say number one would be my, um, my, my grandfather and my mom’s side, who, who, who passed away, uh, my grandfather. [00:45:31] Jon Yoo: Um. You know, many years ago and I, you know, growing up in the U S I didn’t get a chance to spend too much time with him, but I later learned after he passed of some of the crazy stories that he’s dealt with. So, you know, when, when Japan, like colonized Korea, for example, you know, it was in Japan, he got shipped to Japan for a little bit and then actually had to go to a concentration camp up in Serbia or, uh, yeah, or no, not Serbia. [00:45:57] Jon Yoo: Um, what’s the tundra, the frozen tundra. I don’t know the, oh, uh, yeah, Russia where they said, yes, I need to Siberia, Siberia. Yeah. Siberia. And he actually walked back from Siberia, uh, barefoot back to Korea. It took him like many, many months and just showed up in my grandmother’s doorsteps, like thin as a stick with long hair. [00:46:20] Jon Yoo: Uh, I would love to just learn about what type of will it took and how that shaped them as a person for any like hardship down the road. Um, yeah. Yeah. Yeah. You know, I want to write like an autobiography about, or not a biography about that. Very cool. Um, I think one of my favorite people is, uh, Jon Stewart. [00:46:38] Jon Yoo: Yeah. I think he’s a, uh, has such a wide range of, of expert, you know, not expertise, but just topics that he can engage in incredibly intellectually curious. And I think I’d be able to. Like ask so many questions or you know, so witty. I want to be Jon Stewart. He’s a funny guy. Yeah. Yeah, exactly. Exactly and then Final one is it’s kind of a funky one, but Jim Carrey. [00:47:06] Vince Menzione: Yeah [00:47:06] Jon Yoo: he’s I saw an interview where he talked about how there’s this face that you put on for everyone and there’s who you are internally and And when you’re an actor or like people kind of pigeonhole you into a specific image, you know, there’s such a hard pressure to live up to that image or be that person when they meet him in person. [00:47:26] Jon Yoo: Um, and not saying I have, I have, I’m like two face where there’s like me, personal John, and then there’s like professional John, but you know, that’s definitely converged more and more as work has become more of my life. And so, you know, one of the things I want to talk to him about is just how do you maintain kind of your self identity and who you are? [00:47:46] Jon Yoo: Even if it clashes with what you need to be in a professional setting, um, or as a CEO of a company. And so I think those are pretty [00:47:54] Vince Menzione: interesting topics. Yeah, because we do have to have a persona in the business world. It might be different than our kind of personal. [00:48:00] Jon Yoo: Yeah, that’s [00:48:00] Vince Menzione: right. [00:48:01] Jon Yoo: Well, everyone has it. [00:48:01] Jon Yoo: Everyone has like the phone voice. Yeah. Or the podcast voice. Yeah. Yeah. It’s very nice by the way. Yeah. I feel your battle voice. [00:48:09] Vince Menzione: Where are we hosting [00:48:09] Jon Yoo: this [00:48:10] Vince Menzione: dinner? [00:48:11] Jon Yoo: Ooh. Um. I mean, anyone that’s gone out with me knows, uh, I’m a big Korean barbecue guy. Okay. So we’re going to be in Seoul at one of my favorite Korean barbecue spots. [00:48:22] Jon Yoo: It’s a little dingy hole, hole in a wall. And, uh, we’re just going to grill some pork belly and, and, uh, you know, beef and have some soju and just talk about life. All right. I’m kind of [00:48:33] Vince Menzione: come join you. Yeah, absolutely. That’d be, that’d be a lot of fun. Meet your granddad, uh, Jim Carrey and Jon Stewart are two amazing individuals. [00:48:40] Vince Menzione: Yeah. So it’s really cool. So, you know, we are living through an amazing time of change and transformation. And we are in 2025 and really the early first quarter of the year. What would you say to our viewers and listeners to help them optimize for their success this new year? How do they need to lean in? [00:48:57] Jon Yoo: Specific to marketplace or just in general, [00:49:00] Vince Menzione: just [00:49:01] Jon Yoo: in [00:49:01] Vince Menzione: general. [00:49:03] Jon Yoo: I’d say, uh, just being intellectually curious and tinkering around. So we’re going through such a rapid evolution in technology and a lot of the. Adoption in like your day to day work setting, for example, uh, because enterprise adoption generally is much, much slower than consumer adoption. [00:49:25] Jon Yoo: And so tinker around with all these different tools that are out and figure out like what the art of the possible is. And just being very curious about that mentality, I think is super important for you to understand what the value of this technology and how it can change the world, um, like me, myself, like I play around all the time with like chat, GPT, clod, like, you know, perplexity to figure out like. [00:49:47] Jon Yoo: Where does the system break? How can it actually enhance my productivity? Um, I mean, just the other day, this is such a stupid use case, but I wanted to like recreate a slide and, you know, I didn’t want to go ask someone on our team to do it. So, and I haven’t written Python in like years, but like just asking Chachapik exactly how I do it, was able to do it in 20 minutes. [00:50:07] Jon Yoo: And now any other kind of work that, you know, I want to be able to do that with, I can leverage this like little snippet of code that, you know, GPT gave me. Or like creating images, for example, for LinkedIn, then there’s so many different applications and you have to tinker around with it to understand what’s possible and what’s not. [00:50:23] Vince Menzione: So I recently downloaded cloud and perplexity. I’m kind of curious. Cause I’ve been using chat GBT, which is your favorite. Chat GBT. Yeah. Yeah. Pretty cool. I [00:50:32] Jon Yoo: think partly cause I just use it for most. Um, but yeah, they’re all pretty good. You know, [00:50:38] Vince Menzione: you can’t go [00:50:38] Jon Yoo: wrong. [00:50:40] Vince Menzione: John, so excited to have you here today. [00:50:43] Vince Menzione: Thank you for making the trip from San Francisco all the way here to Boca Raton, Florida. And, uh, so glad you get to spend time with our viewers and listeners. I want to thank you for your support and partnership. Thank you for joining the Ultimate Guide Department. [00:50:54] Jon Yoo: No, thanks for having me. It was such a blast. [00:50:57] Jon Yoo: Um, I always, as I mentioned, learn something new at all these events and It helps that Boca Raton is phenomenal, you know, and the venue and everything was phenomenal. So I really appreciate your partnership. Appreciate you. Yeah. Thank you so much. Perfect. Appreciate [00:51:10] Vince Menzione: you. Thank you. Thank you, John. And thank you to our audience at ultimate partner. [00:51:15] Vince Menzione: We strive to bring you great leaders like John to help you achieve more. If you like our podcast and like watching us on YouTube. Please tell your friends about us and hit the subscribe button on either Spotify, Apple, or our YouTube channel. You can also follow along on TheUltimatePartner. com to learn more about our events, our podcasts, and our community. [00:51:40] Vince Menzione: Together, let’s spark the ecosystem.know. It’s incredible. I know, I just gotta find, you know, block out some time to be able to visit it, but that’s probably where I would hold it.

Dai Vu, Managing Director of Google Cloud’s Marketplace and ISV Go-To-Market programs, shares insights on Google Cloud’s impressive growth, skyrocketing from $1 billion to a $48 billion run rate since 2017. He discusses the transformative role of AI and the emergence of AI agents, emphasizing partner collaboration to enhance the customer experience. With a focus on evolving marketplaces and strategic partnerships, Dai provides valuable advice for companies looking to thrive in the dynamic cloud landscape. He also reflects on adaptability and personal insights from his own career journey.