A cloud marketplace is an online store run by a major cloud provider where businesses can find, buy and deploy third-party software and services, with the charges appearing on their existing cloud bill. Listings range from SaaS applications and security tools to software that runs in your own cloud account. Many buyers use marketplaces to simplify procurement and, where the provider’s rules allow, to count software purchases toward a committed cloud spending agreement.
At a glance
- Marketplaces are run by large cloud providers and list software from many independent vendors.
- Charges are billed through your cloud account, consolidating invoices with one supplier of record.
- Some purchases may count toward a cloud spending commitment, depending on the provider’s eligibility rules and your agreement.
- Private offers let vendors give a specific customer negotiated pricing and terms.
- Governance matters: without purchase controls, teams may be able to subscribe to software on their own.
What problem it solves
Buying software from a new vendor usually means a security review, contract negotiation, supplier onboarding and a new invoice to process. For a small tool, that overhead can take longer than the evaluation. Meanwhile, businesses with a committed-spend agreement with a hyperscaler may be at risk of not using all of it before the term ends.
A marketplace addresses both. The cloud provider is already an approved supplier, so purchases can use an existing billing relationship. Where the provider counts eligible marketplace spend toward a commitment, buying software that way can help use committed funds that might otherwise go unused. For finance, it can mean fewer separate supplier invoices.
How it works
Listings. Software vendors publish products with public pricing, which may be per user, per unit of usage, or a fixed subscription. Some listings are software as a service (SaaS) applications; others deploy into your own cloud account.
Private offers. For larger deals, the vendor (or in some marketplaces a reseller or channel partner) creates a private offer for one customer with negotiated pricing, term and contract terms. The buyer accepts it in the marketplace, and charges follow through the cloud bill.
Contract terms. Buyers usually contract with the software vendor, either under the vendor’s own terms or a standard contract the marketplace provides. The cloud provider handles billing and payment.
Commitment drawdown. Cloud providers set rules on which marketplace purchases count toward committed-spend agreements and how much of the spend counts. These rules vary by provider and agreement and can change, so eligibility should be confirmed for each purchase. Cloud commitments work much like a minimum annual commitment: depending on the agreement, a shortfall against the committed amount may still be billed, which is why eligible marketplace spend can matter.
Governance. Administrators can usually restrict who may buy and which products are approved. Without that, marketplace subscriptions can become another form of shadow IT.
To see how marketplace spend fits into a broader cloud plan, read our public cloud solution page.
When it matters for buyers
- When a cloud commitment is under-used. Check whether planned software purchases are eligible to count toward it.
- When buying software quickly. An existing cloud billing relationship can shorten supplier onboarding.
- At software renewals. Ask whether moving a renewal to a marketplace private offer changes price or terms.
- When consolidating spend. Marketplace billing can reduce the number of separate software invoices.
- When managing SaaS sprawl. Marketplace purchases need to be tracked alongside other software, for example in a SaaS management platform.
Questions to ask vendors
- Is your product listed on our cloud provider’s marketplace, and do you offer private offers?
- Does this listing count toward our committed-spend agreement, and at what rate? Can you confirm in writing?
- Whose contract terms apply, and can we negotiate them in a private offer?
- Who provides support, and who do we deal with in a billing dispute?
- Will the price, term and renewal terms be the same as buying direct?
- How will we see marketplace charges broken out on our cloud bill?
How it differs from a value-added reseller
A value-added reseller (VAR) is a company that resells products and adds its own services, such as design, installation and support, under its own contract and invoice. A cloud marketplace is a self-service storefront run by the cloud provider, where billing flows through your cloud account and the contract is usually with the software vendor. The two can overlap, since some marketplaces let resellers create private offers, but a marketplace on its own does not supply the advice and services a VAR typically sells.