The realm of business-to-business (B2B) software procurement is undergoing a significant shift spurred by the burgeoning success of software marketplaces. If predictions are accurate, by 2030, such marketplaces could account for up to 10% of all global enterprise software purchases.
Industry provider of strategic business insights, IoT Analytics, delved into this evolution in their comprehensive "B2B Technology Marketplaces Market Report 2024-2030", uncovering the transformative effect of these marketplaces on enterprise software procurement dynamics.
According to the report, organisations are in an incipient phase of this transformative shift, migrating from the traditional 'direct-sale' approach to these new-age software marketplaces, a unique segment of B2B technology marketplaces. This new procurement platform is a fertile breeding ground for a host of benefits, all of which are serving to propel its growth.
These software marketplaces are witnessing exponential growth, quickly becoming the fastest-growing procurement channels. For example, marketplace platform provider Zuora has seen its revenue balloon nearly 3.5x in the past six years. Additionally, sellers are reaping rewards, with CrowdStrike amassing over $1 billion in sales solely from their AWS Marketplace listings. With the AWS Marketplace itself hosting nearly 25,000 unique offerings, it's clear the evolution of industry dynamics is stirring a wave of significant changes.
Knud Lasse Lueth, CEO of IoT Analytics, commented: "We are witnessing a fundamental shift in the dynamics of both software sales and procurement, moving towards a more efficient, subscription-based model... We anticipate the emergence of a significant number of meaningful B2B marketplaces in the coming years, and we expect the share of marketplaces in enterprise procurement to increase fivefold in the next six years."
Justina Alexandra Sava, Analyst at IoT Analytics, concurred, noting that the shift to a subscription economy centred around marketplaces and the efficient streamlining of procurement processes is beginning to establish new benchmarks and redefine business models within the technology industry.
The findings of the report suggest further evolution lies ahead as industrial automation companies managing hardware and software solutions, manufacturers wishing to build industry-specific app stores, and companies offering a mix of services explore the opportunities that these evolving marketplaces present.
However, while the growth and success of B2B software marketplaces is unequivocal, their proliferation brings its own set of challenges relating to training of sales teams, frictions with existing resellers, and strategic decisions about whether to develop proprietary marketplaces.
Nevertheless, the concluding note of the analysis is one of optimism, emphasising the potential for the reimagining of procurement dynamics, the emergence of new benchmarks in marketplace governance and the redefinition of established business models. For software vendors, the rise of B2B software marketplaces could be the dawn of a bright new era in enterprise solutions procurement.