212 – Beyond the Hype: The True Power of Microsoft’s Marketplace for Partners

Join Vince Menzione as he sits down with Yvonne Muench, a seasoned leader in business strategy, product management, and partner programs. Together, Vince and Yvonne delve into the transformative power of marketplaces, emphasizing the growing importance of AI adoption within the Microsoft ecosystem. Gain insights into the rewards awaiting Microsoft partners, the tangible benefits of Microsoft’s marketplace, and key strategies for success in the commercial marketplace. Discover how strategic alignment, deep audience understanding, and effective partner planning can drive marketplace growth and foster fruitful collaborations with Microsoft. Don’t miss out on this invaluable discussion on navigating the evolving landscape of partner ecosystems.

1. Marketplace transformation and empowering ISVs. (0:00)
2. Marketplace growth and AI adoption in the Microsoft ecosystem. (1:18)
3. Marketplace growth and rewards for ISVs. (5:51)
4. Microsoft marketplace benefits for partners. (12:18)
5. Marketplace success for ISVs in Microsoft’s commercial marketplace. (19:15)
6. Marketplace growth and partner planning. (24:22)
7. Partnering with Microsoft and AI. (29:04)

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marketplace, isvs, partners, customers, isps, microsoft, azure, programme, microsoft cloud, isv, ai, build, benefits, apps, organisation, publish, sales, selling, offers, platform

Vince Menzione 0:00

Hi. I’m Vince Menzione. I’m the host of Ultimate Partner and the CEO of ultimate partner. And I’m on a 10 year mission to empower every individual, organisation and partner to do more through successful partnering. We’re back at Microsoft Studios again today. And this has been an incredible year as Microsoft not only took the world by storm with Gen AI and co pilot, but also doubled down on the commitment to marketplaces. What we’ve been calling this marketplace moment. I’m excited to be joined by someone at Microsoft who has been at the centre of this marketplace transformation and leads the initiative designed to empower ISVs on their marketplace journey. Welcome you Yvonne mench.

Yvonne Muench 0:44

Thank you, Vance. It’s great to be here.

Vince Menzione 0:46

So glad to be here with you. Thanks. So excited about our conversation today. This, I have been also calling this the marketplace moment. As you know, you’ve worked directly for Anthony Joseph who joined us in Dallas for this incredibly engaging conversation and dialogue on marketplace. And a lot of our conversations here on the podcast have been centred on this. So I’m so excited for what we hope to accomplish today to help partners understand this important topic. So you’ve on can you share with our listeners your role and the mission of your organisation? Absolutely.

Yvonne Muench 1:17

So I work in corporate cloud marketing, and on a team that’s focused on marketplace growth. Our mission is to make b2b commerce easier and have a thriving marketplace for all audiences, that’s publishers, selling partners or channel partners and customers. My team specifically focuses on scale global programmes to help ISVs in particular, but increasingly, those channel partners and transacting partners as well help them take advantage both of the Microsoft Cloud to build their applications and the marketplace to grow their sales.

Vince Menzione 1:48

I love what your your organization’s mission is. And you report in through Anthony Joseph, as we mentioned earlier, and you sit outside the partner organisation we work very closely with the partners in that in that organisation as well, correct?

Yvonne Muench 2:01

That’s correct. So I’m in the global demand centre part of Microsoft and that team focuses on onboarding customers at scale to the Microsoft Cloud. And ISVs are definitely a very important partner type. They’re also a very important customer segment as well. And we want to increase the quantity of ISVs that consider and adopt the Microsoft Cloud. And so that’s why the global demand centre is also a partner with our partner team to engage eyespace.

Vince Menzione 2:32

So you’ve on Microsoft has been around marketplace for quite some time, what’s different now? Well, we’ve

Yvonne Muench 2:38

really reached an exciting tipping point of sorts. And there’s a compounding set of factors that all influence that. It’s how the customers want to buy increasingly, in a digital online self serve fashion, the capabilities of the marketplace platform itself with increasing range of types of apps that can be transacted and private offers and flexible billing offers and how to sell them. And then internally, the focus and commitment to marketplace across Microsoft is really come to fruition, from engineering, to marketing, to partner, and sales teams all working together to make sure it’s a thriving platform for ISVs, with apps to find customers and to solve their business problems. So that’s been really exciting, exciting. And you’ll see that in the fact that we now pay our sellers based on marketplace, build sales, for ISVs that are considering but haven’t yet adopted marketplace, we have incentives to help encourage them cash incentives based on early ranges of marketplace, build sales, and all that works together to fuel that momentum we’re seeing, in addition to the platform itself, you know, the era of AI is also a factor that has really increased the number of ISVs that are excited about building apps on the Microsoft Cloud. So whether it’s using GitHub to speed their time to market in writing the code with generative AI, helping them finish the code more rapidly, or embedding the AI into their apps with Azure open AI and cognitive services, or even building ISV, or apps and API’s and extensible plugins into the copilot suite of products, there’s a whole range of new opportunities out there marketplace is going to be the place where they put those opportunities and get them in front of customers. And that’s another fueling factor.

Vince Menzione 4:23

You know, you mentioned AI, and I can’t We can’t have a conversation today without discussing AI, at least at the at the tipping point here that it is caused. In fact, I heard someone say last week that the CEO is now the new CIO, because they’re getting ahead of the transformation at the C suite level. Right. What are your thoughts there?

Yvonne Muench 4:42

Well, I mean, it’s changing everything. It’s exciting. It’s disruptive, and and it’s a new world and I am excited to be here in this moment, and I won’t pretend to know exactly where it’ll lead us. I just know that it what the Microsoft Cloud isn’t Everything to offer and with our partnerships in the best of breed players in the AI space, we want to be a platform for ISVs to build amazing products that we can’t even anticipate or describe right now and the sky’s the limit. And that’s going to unlock new capabilities and innovation with customers.

Vince Menzione 5:17

And tie in the marketplace to this, the momentum is accelerating, in fact that you can sense it right. Canalis is, in fact, had originally said that we would see $45 billion flow through the marketplaces by the end of 2025. Next year, they’ve now since recanted and said it’s going to be the end of this year. And then tackle IO, an organisation that works around marketplace, they have a platform around marketplaces are now predicting $100 billion flowing through marketplaces by the end of 2026. And that might even be sooner.

Yvonne Muench 5:51

Right? Well, I’m pretty bullish on marketplace. So I think those forecasts are really well within range. I see the marketplace as the future of b2b commerce. So that’s been driven in large part, as I mentioned, by those customer preferences that are changing, and today’s fast paced environment and the impact of AI. As we mentioned, organisations need more cloud solutions than ever before. They’re at pressure to remain relevant to accelerate innovation and to balance cost and marketplaces really help with that. So those customers want to maximise the cloud investments that they have the cloud commitments that they can use for app purchases, they want to simplify procurement and have it be really fast and easy click to deploy a SaaS solutions that are already validated for compatibility with the technology they use. So that’s what the commercial marketplace does. And we’ve recently done a study with Forrester a total economic impact study. And we found that customers have really compelling returns on marketplace. So it was actually 580%, three year ROI, with a payback and six months. So that was factors like reduced employee time for onboarding new vendors by 75%, reduced employee effort for each procurement engagement by 50%. And improved time savings with the finance and the payments teams by 30%. So that kind of benefit is creating the momentum of customers moving and embracing this new model of how to buy software applications,

Vince Menzione 7:19

everything you say points to what we’ve been seeing in terms of the changes in buying behaviour, in fact, right? I mean, we’ve, we’re seeing, you know, whether it’s the millennial buying behaviour, or it’s just that we’ve all become accustomed since COVID, to doing things differently. The decisions are being made at the C suite level in terms of cloud commitments, but the line of business owners are making these buying decisions, and they want to make those decisions very similarly to the way they buy things in a consumer fashion as well.

Yvonne Muench 7:46

That’s right. You know, I often think that like the consumer marketplace is, as it many times does, the consumer models lead the commercial models. And we think about the involved purchases that we do in the consumer world that we’re now comfortable with online, people buying houses buying cars buying Wedding Rings Online. So there is no purchase that is too involved or too high priced or too complex that can’t be considered and possibly, or already being done in a commercial marketplace. Absolutely.

Vince Menzione 8:16

So want to double click right you lead a programme called the ISP success programme. And I was hoping you could share with our listeners more about this programme, and its purpose to the partner community.

Yvonne Muench 8:27

Absolutely, I’d be happy to. So it went GA at last inspire in July. And simply put, it’s to help ISPs that want to take advantage of the Microsoft Cloud and take advantage of the marketplace platform. So we support it every step of the journey as they’re building the applications, publishing the applications and selling them through marketplace. And another key concept is that it’s a wide open door available to any b2b ISVs that could publish commercial applications. So that could be a brand new startup or an ISV, building their first app on the Microsoft Cloud or their 10th, or their 50th could be managed or unmanaged. And across the Microsoft Cloud, Azure applications dynamics power platform and 365 or teams. So we actually see really exciting data that over half of the ISPs we work with are building across the Microsoft stack. So the concept of Azure ISV, your team’s ISP is sort of a fallacy. Azure in teams being one of those hero combinations that we see most commonly. Absolutely. So to help build a publish we offer primarily technical benefits in the form of Cloud Credits are cloud sandbox across the Microsoft Cloud, best in class developer tools like Visual Studio and GitHub, as well as one on one technical consults to help both with app building and app publishing. Those are the benefits to help them get that app built and help get it published. And that in a sense, is what the ISP success programme is doing

Vince Menzione 9:54

as partners want to take advantage of that programme. Where do we point them? Well,

Yvonne Muench 9:58

ISP has Above is a website that they can find all the information about the programme, and it has the link to join. A couple other things the ISP has to do if they’re not already a member of our partner network, they will need to join before we can give the benefits. Additionally, they do have to be intending to publish to the commercial marketplace. Very

Vince Menzione 10:20

good. You also lead and you’re very busy. You also lead another probe. The Marketplace rewards programme, correct, right? What’s the difference between these two programmes?

Yvonne Muench 10:30

Well, actually, they’re all part of the same programme. So when we went GA, we incorporated marketplace rewards into ISP success. It still has two separate names, but that was a preexisting programme that focuses on the growth, what I call the growth stage of the process for ISPs that already have published applications. We help them instead of technical benefits now with sales and marketing benefits, to help them grow their sales. So it also doesn’t matter if again, a wide open door if an ISP started at the front door, so to speak with ISP success and build and publish benefits and then they publish great or if they publish on their own and show up in the store friends. That’s also great. Any publisher is invited to join and receive those benefits for free. They increase based on the ISPs performance in terms of application sales. The benefits include things like social promotion success stories, Microsoft seller spotlights, one on one consultations to optimise their listing with keywords and dynamic content, as well as most importantly, perhaps, Azure credits or free Azure grants to accelerate their sales. That is the most activated benefit and the most powerful in closing sales, especially large, even six figure and above deals. So the ISPs can use that free Azure to defray their costs of test drives and trials and proofs of concepts. Or they can use it to act as a deal sweetener with a customer, that can be really powerful. If a customer is first time considering a purchase on marketplace to help get them over the hump. It can also be really powerful. To help them choose the Microsoft commercial marketplace, and the Azure version of the application as opposed to versions that might be built on a alternative public cloud. I’m

Vince Menzione 12:18

so glad we’re having this conversation today. Because I don’t know that every partner knows this and all of these amazing benefits that are available to them.

Yvonne Muench 12:26

I can assure you they don’t I talked to partners all the time. And some of them are very surprised, even though it’s the most activated benefit. Some of them don’t know that marketplace rewards and we’re working hard to change that and do a better job of making it more discoverable. But also, some of them aren’t aware of how they can use the Azure benefits or some of the other benefits. So that’s an ongoing endeavour, we’re

Vince Menzione 12:48

gonna put a shout out here for our partner listeners here to make sure they’re taking advantage of this, please, thank you. There’s gonna be a quiz later. So you Vaughn, I get messages and calls from partners all the time saying, I really would like to be a managed partner, I want to have a PDM partner development manager. What would you say to these partners?

Yvonne Muench 13:10

Well, I hear that question a lot as well. And honestly, PDFs are fantastic. They help an ISP or any partner navigate Microsoft. And we’re a large, complex organisation. But honestly, our goal in in our team and the programmes that we build are designed to drive success across ISVs regardless of managed status. And honestly, we’re seeing that bear fruit. When we look at the ISVs that are progressing up the ranks have generated more and more marketplace build sales, the vast majority of them are unmanaged. And that’s, that’s really exciting. So you know what advice for those without a PDM first, engage in marketplace, and second, use the self serve resources. They’re not perfect, but you might be surprised at how useful they can be. So on engaging in marketplace, I always call that the single most powerful thing that an ISV can do to get the most out of their Microsoft relationship and effectively go to market with and through Microsoft, whether that’s selling through our field since Microsoft marketplace is now the foundational platform for cosell or selling through our channel or your own channels since marketplace provides access to and a way to extend margin to partners, whether that’s CSPs LSPs, MSPs s eyes, any acronym you want to use, and for selling direct to customers through the storefronts and the in product opportunities of Azure portal and team store where 95% of the Fortune 500 are using Azure and an Azure portal and 320 million teams customers are using teams and we’ll see things in team store. So that’s why both ISV success and marketplace rewards work to help ISVs take better advantage of marketplace. On the self serve resources. I want to take a moment and just share a couple of those alongside those programmes which are wide open. So go ahead and join and they all start free There are some really valuable resources and tools to be aware of, perhaps especially valuable to ISVs, new to Microsoft or without a PDF, a rich set of curated self serve content, sometimes referred to as mastering the marketplace. This is code samples and architecture diagrams and sash publishing tools, technical How to videos, marketing best practices, so take advantage of those, and you’ll find them on the SP Hub website. We also have a newly launched app advisor, which is a self serve guided experience that surfaces focused resources tailored to where an ISV is in the development stage, no matter where they’re starting from. So you can also check that out on ISP hub under the resources tab. And then of course, there’s an online marketplace community, and always on forum, peers, other ISVs that have encountered similar things, but also Microsoft experts to quickly and easily get questions answered. So you can find that link to join on ice we have as well, you can post a question to that community is probably been asked and answered before, if not, my team is involved in finding this means internally to answer the questions across engineering partners and sales. The answers provided draw from internal one on one engagements we’ve had from internal forums we have and that’s one of those places where PDFs go to get their questions answered. Yeah,

Vince Menzione 16:16

yeah, it seems like there’s a lot of rich content to support the partners out there today. I did see a lot of resistance this year, to marketplaces, at least the early part of the year, when the announcements came out there was there was some reluctance, and particularly in some of the large ISVs that had well developed channels, right? What do you see from this?

Yvonne Muench 16:38

Well, change is hard. And I definitely understand that and the larger the organisation, the harder changes. So agility kind of skews towards towards young and small. But I would start, you know, when we talk about when we talk with partners that are saying, Why Why should I bother? Why should I embrace marketplace, I often start with that customer angle of customers are moving to marketplace, and you don’t want to be behind on that trend. So you know, pre committed cloud budgets are one of the biggest factors driving that. And almost all of those customers are already using marketplace, 85 plus percent of them are and that body of customers with committed cloud spend, or what we call Mac Microsoft Azure consumption commitments, that is growing steadily 40% per year. So that kind of opportunity is only going to grow. And we often hear from ISPs, hey, you know, my customers ready to buy but only if through marketplace, they want to use their committed budgets, I’m gonna lose this deal. How do I get published quickly. And of course, there’s also benefits on the ISP side. Some additional reasons to embrace marketplace, you can expand your reach basically list once and sell globally, you can let Microsoft be your transactional platform outsourcing invoicing and taxes and currency conversions for almost any country that you might be selling in. You can let Microsoft be your deal making platform using those private offers to sell even highly negotiated price and terms types of deals that are well into the six figure categories. You can also engage your channel and extend margin and sell through partners via CSP private offers or multi party private offers. And finally, of course, you can get rewarded for your performance as I’ve been talking about with marketplace rewards I already mentioned increasing free Azure grants that unlock based on your marketplace build sales. But some publishers are also unaware that there’s also cash incentives for ISVs that kick in at 25k. In marketplace, build sales, and cosell benefits that kick in in 100k of marketplace, build sales. So many partners don’t realise that marketplace is actually the fastest and easiest way to unlock cosell benefits. Yeah, you can unlock them at 100k in Azure consumed revenue 100k a marketplace build sales, which is the full price of your application, not just the Azure component for a deal selling into the enterprise, that might be just one deal or a handful of them. And even top to your coastal benefits. There’s paths to earn them through marketplace that are accelerated. And that’s something really important to check out. If you are an ISV selling into large enterprise

Vince Menzione 19:15

IT marketplaces streamline so much of the CO selling process, I remember back in the day when we would like compare quotes and we would try to reconcile what we were doing. And this has just been totally eliminated through the marketplace. Marketplace is taking and really automating that CO selling process.

Yvonne Muench 19:34

Well deal registration was a burden, not only for ISVs, but also internally for us. And so it’s fantastic that you know, with the commerce platform and marketplace being where the cosell deals are done, then we can just eliminate that step entirely.

Vince Menzione 19:50

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Yvonne Muench 20:52

Well, it’s important to understand that the most successful ISVs are basically the ones that are deeply engaged. So they engage in programmes and use benefits. And in fact, we find ISVs engaged in marketplace rewards outperform their peers by five to one in terms of marketplace, build sales. And also their ISPs are the successful ISVs are still deeply engaged in the marketing and selling of their own applications. Marketplace is a transactional platform with a lot of great capabilities, but ISVs still need to invest and execute effective marketing and sales and or engage partners as their channel so it’s not publish and walk away. For the really leading ISVs in terms of marketplace, sales, we find they have a marketplace first sales strategy. I any deal that can go through marketplace does go through marketplace, depending on the size of the organisation, this can be quite a shift internally in processes of marketing and sales and even operations, compensation and more,

Vince Menzione 21:50

especially the larger organisations, right, the ones that we’ve talked about it or resisting the change is because they basically have to build new processes to drive this. That’s exactly right. So your organisation announced a new programme this year designed to help and was this applies to some of these partners we talked about that have these rich channel organisations. It was designed to help drive channel or seller adoption. This is you mentioned multi party offer. Can you share more about why this programme is so important? Absolutely.

Yvonne Muench 22:19

I would call it more a capability on marketplace rather than a programme. But it is hands down the most exciting one delivered this year. I’m super excited about it. Today, it’s only available in the US but it is coming to additional geographies very soon. In a nutshell, this allows ISPs to engage channel partners in selling their applications through the marketplace. And we know that most ISPs sell through a channel, this is not a surprise, sometimes the majority or all of their revenue goes through a channel. So enabling this marketplace is incredibly important. And it’s sure to be a strategic lever in unlocking this explosive growth that we’re seeing. So established ISPs can bring their channel to marketplace, younger startup or other ISVs can tap into our channel through marketplace. And we’re just over a half a year in this launched in July at Inspire as well. And we’re already seeing that the average deal size in MPO deals are about 3x the size of private offers without up channel partners engaged. So it just makes great financial sense to bring partners into a deal. Basically, the ISV creates a private offer to a selected reseller, which then allows them to extend that margin, the reseller then engages the customer, the deal is still transacted on our commerce platform on Microsoft paper. So that means we still handle all the invoicing for all parties paying out the margin and the remainder to the ISV. And since we’re transacting the deal, importantly, this also means that the committed cloud budgets can be used for that purchase by the end customer. One thing to note to be a transacting channel, partner on marketplace, any interested partner will need to enrol in MPO and get a seller ID. It can sometimes take a few weeks to complete. And we’re seeing channel partners come to us with deals in hand ready to go, which is so exciting. So we’re advising any interested partners to get the enrollment setup and out of the way in advance. So the first marketplace transaction goes really smoothly without any delay. Yeah,

Vince Menzione 24:16

it makes sense. So, again, we talked about this being the year of the marketplace. How do you think the shift in marketplace is going what’s next? And how should partners plan for it?

Yvonne Muench 24:28

Yeah, well, the shift is on we are experiencing a lot of growth. And that is one of the challenges that we’re managing through. But it’s a good problem to have. We’re seeing that growth in all measures such as the number of publishers and apps, the new customers, the deal volume, the deal sizes, especially the deal sizes, and of course the total sales. So what’s next from us, you’ll see a lot of great continued enhancements, additional types of apps are good and offers as well becoming transact Bull, the continued geographic rollout of the multi party private offer capability, continued improvements in customer experience and searchability. And continued investments in marketing the marketplace and driving demand. The latter part I’m really excited about as well, you’re gonna see a lot more from us in terms of driving demand. So for example, this is things like driving increased customer awareness and traffic to the storefronts, merchandising of the leading apps within those storefronts, AI powered discovery experiences within Azure Portal to improve search and surfacing of solutions, proactive recommendation engines to customers, propensity scoring, for of customers for the marketplace, publishers, and marketing campaigns, to the end, through the field sellers to and through the channel and of course, direct to customers, a lot of exciting stuff coming in that space.

Vince Menzione 25:52

So many exciting things coming down the road here. What would partners need to do now?

Yvonne Muench 26:00

Well, you know, a lot of these investments I talked about will focus primarily on the apps that already have some marketplace traction. So my advice would be to jump in. For ISPs. If you have existing publish apps that are just contact me, upgrade them to transactable. If you haven’t already joined ISV success, we can help you whether you’re upgrading an existing app, or building and publishing an entirely new one. If you’re already published, join marketplace rewards and start using those benefits to accelerate and close deals and bring your channel to marketplace and get them enrolled in MPO. And if you are a channel partner out there in the US get enrolled now and for others do so as soon as it’s available when it comes to your area. So

Vince Menzione 26:41

much to be done with these partners, bringing them together, getting them to execute together. I say ISPs channel partners transaction partners, again, to the end customers so much opportunity out there in these durable cloud budgets. It really is. So I have a favourite question. It’s not about marketplaces, though. But every podcast interview I do, I love to ask my guests this. So you’re hosting a dinner party. And you could have this dinner party anywhere in the world. We were talking about Rome a little bit earlier, that might be an interesting place, dad. And you can invite any three guests from the present, or the past to this amazing dinner party. Who would you invite? And why? And

Yvonne Muench 27:22

it’s a fun question. So, you know, for any dinner party, you need to have a great conversation. And I think I’d start with inviting Trevor Noah. I loved his book. He’s fantastic live, and I’m seeing him again here in Seattle in next month. Obviously, he’s a comedian and a great storyteller. I especially admire though, how he can talk about even really difficult issues and topics. Many don’t know he’s Microsoft’s chief questions officer. In that role, he runs a podcast himself, yes, called the prompt, little AI flavour there. With the tagline you can’t find answers without asking the right questions. So you should check that out. I’d also invite the poet Mary Oliver, setting aside that she’s no longer living the line from her poem, wild geese, whoever you are, no matter how lonely The world offers itself to your imagination, speaks to me. And she’s such a keen observer of life and nature, an incredibly beautiful writer. I’d love to see the world through her eyes and ask her about that. But I imagine she’s pretty quiet and introverted. So my friend Trevor would help bring her out or love it. And then for the delicious food, I’d invite Yotam Ottolenghi, he’s my absolute favourite cookbook author. I don’t know if I pronounced his name correctly. But I think I have almost every one of his books, and I adore his recipes and the intense Mediterranean flavours that he brings to them. When I was on sabbatical, I cooked my entire way through one of his books. So I’d love to sit down at a table with him. But honestly, for dinner party, I invited him over early, and he would be in my kitchen helping me cook the food. And I’ve asked him to sign every single one of my cookbooks, Mediterranean

Vince Menzione 29:03

cooking. So maybe we have this dinner somewhere in the Mediterranean is a coastal location that would suit me just it sounds fabulous. I might have to stop by at least for a beverage. Maybe I might see. I’d love that you’re buying you would have been just that amazing guests. I have so enjoyed our conversation. This topic is just so important right now for partners. And I can’t emphasise enough with, you know, $100 billion dollars, projected to be done through marketplaces by the end of 2026. And the amazing opportunity that this is creating around what Microsoft has been doing with AI and the durable cloud budgets, the ability to co sell such an amazing time for us. I want to thank you for joining Ultimate Guide to partner.

Yvonne Muench 29:47

Well, thank you for having me. It’s been my pleasure. It is exciting times and it’s great to talk with you about it. Thank you. Thanks

Vince Menzione 29:54

and thank you for listening and watching the Ultimate Partner Thanks so much for listening to this episode of ultimate guide to partner, online and Ultimate Partner.com. If you liked this episode, I’d be thrilled if you left us up to a five star review on either Apple or Spotify. This helps us to continue to feed your amazing guests. Also, please check out subscribe to our new YouTube channel, ultimate Bart? We’ll catch you next time on The Ultimate Guide to partner