According to a 2025 Key Issues and Prediction Report from The Futurum Group, more than a third of all deals moving through cloud marketplaces now involve some type of channel partner.
Alex Smith is vice president and practice lead for channels and go-to-market at The Futurum Group. He shares that cloud marketplaces were once viewed as a platform for vendors to sell directly. However, as they continue to evolve, they have become a significant route to market opportunity for channel partners. In total, more than $400 billion of revenue now moves through cloud marketplaces, a shift that has been spurred partly by cloud service providers (CSPs) allowing end customers to allocate a portion of their annual commitments to consuming infrastructure to third-party software licenses.
“In effect, CSPs have turned independent software vendors (ISVs) and their partners into another channel through which they consume infrastructure,” explains Smith. “CSPs achieved that goal by reducing the fees they charge ISVs to about 3 percent of the value of the deal to the ISV, which is roughly the same as a traditional distributor would charge them. That leaves enough margin for the ISV to profitably share revenue with the CSP. The ISV can also share revenue with any channel partners that resell their software.”
The growing influence of cloud marketplaces on MSPs
It’s unclear what impact this shift has on traditional distributors, but managed service providers (MSPs) already feel its impact. Many of these MSPs now promote their services in the same marketplaces where customers discover application software.
In fact, Canalys projects enterprise software sales via cloud marketplaces will reach $85 billion by 2028, up from $16 billion in 2023, with more than 50 percent of cloud marketplace sales being driven via channel partners by 2027.
Distributors and some larger channel partners have their own marketplaces. However, cloud service providers have built too many relationships for channel partners to overlook. For example, a recent Forrester Consulting report notes that vendors selling through the Amazon Web Services (AWS) marketplace experienced 50 percent faster deal closures and four to five times larger deal sizes.
Leveraging cloud marketplaces
Forrester Consulting also found that organizations using the Microsoft Azure marketplace could reduce by 75 percent the time required to onboard a new vendor. That’s critical for MSPs trying to drive services revenue, which can only be generated after an application is installed.
Reorienting sales and marketing efforts around cloud marketplaces requires substantial time and effort, but channel partners’ return on investment (ROI) is compelling. The number of increased deals sales teams could drive justifies the effort.
Of course, that doesn’t mean MSPs should ignore other routes to market. As more organizations choose to acquire software and services through cloud marketplaces, the trend is rapidly accelerating. This shift highlights the growing dominance of cloud marketplaces in the industry. Ultimately, revenue generated through other sales engagement channels will not grow as quickly. It will also not grow as significantly as revenue from cloud marketplaces.
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