Another year is about to end and another re:Invent has come and gone. As we drive into the Holiday season, it is a great step to look into the rear view mirror and observe the new developments during the recently concluded re:Invent 2022. A wave of announcements were made in the past days, as AWS showcased the latest and greatest of their updates to their products & services in their annual conference. As VeUP is an AWS consulting partner that exclusively works with AWS Independent Software Vendors (ISVs), it is important for us to highlight the key outcomes to ISVs from this year’s re:Invent.

The primary outcome for ISVs is the emphasis on AWS Cost Optimization

Due to the double whammy of the pandemic led ‘Great Resignation’ and the ongoing recession, most AWS partners, including ISVs, are currently facing the strain of maintaining optimal resources, both talent & technical workloads.

As the CEO of VeUP I was glad to hear Adam Selipsky, CEO at AWS, discuss this uncertainty in the markets stemming from talent crunch, inflation, supply chain disruptions and energy price fluctuations. He empathized with the cloud leaders around the world who all have been impacted by these external factors. It is clear from Selipsky’s statement and our expert understanding of how AWS ISVs operate, that partners will feel tempted to cut costs haphazardly during this uncertainty. But the smart thing to do for a cloud driven ISV would be to use AWS more effectively to control their costs and improve profitability.

Depending on the kind of vertical one is in, ISV partners will find value in many announcements aligned with improving AWS cost optimization. In my expert analysis, there are 3 key takeaways for ISVs from this year’s re:Invent.

1. Improved supply chain management

Selipsky announced the preview of AWS Supply Chain, describing it as a solution “with actionable insights to mitigate supply chain risks and lower costs.” This service can easily connect with ERP like SAP to pull supply chain data and then create the apt data lake without manual mapping. This can then push insights in form of real-time map of inventory use and improve transparency to stakeholders, reducing costs and risks in the supply chain. With AWS Supply Chain, partner leaders has a singular view of their supply chain data and derive recommendations generated by ML, and built-in collaboration capabilities to resolve unexpected issues faster.

2. Faster integration between AWS Services

AWS CTO Werner Vogel who took lead to announce the Amazon EventBridge Pipes, exclaimed the outcome of accelerated development velocity as this service is able to cut time needed to learn the services and write integration “glue” code. Using EventBridge Pipes, your technical team in a cost-effective manner can:

• integrate AWS and self-managed services, as event producers and event consumers, and
• enrich the events using built in free transformations, or advanced transformations using Lambda, API Gateway, Step Functions etc.

3. Quicker serverless implementation

Despite serverless becoming more ubiquitous in the past years, many developers and engineers are yet to involve themselves in serverless applications. So the purpose of the recently announced Application Composer would be to make developers who have minimal experience in serverless to create architecture and build functions by using just a simple drag-and-drop workflow. On the browser based visual canvas, users can start a fresh architecture, or import an existing CloudFormation templates, and subsequently connect AWS services to generate deployment-ready projects. AWS Application Composer can also maintain the diagram of your application architecture aligning against your IaaC in real time. Werner Vogel’s announcement of Application Composer Preview ensures product leaders can soon leverage this service to achieve faster turnaround time to serverless solution deployment.

VeUP enables better AWS cost optimization for partners

It is important ISVs take the theme of cost optimization into heart and consider these 3 services, and other service announcements, into their service strategy planning exercises. In times of uncertainty, these developments to the AWS technology landscape ensure the product leaders can maintain profitability by optimizing the workloads and business processes. VeUP is always at the forefront of studying the AWS technology landscape and ensuring our partners can leverage such innovative services in a more effective manner. Our services are defined to relieve worries the product leaders have with regards to cost optimization and ensure the partners can devote time to do things they want instead of things they need.

What does it mean to co-sell with AWS as an ISV (Independent Software vendor)? We will explain how AWS Co selling can help you achieve your revenue outcomes and market growth.

Fundamentals of AWS Co-selling

Let’s start with the fundamentals of co-selling and what it means.

• Reactive: If your are working the sales pipeline of prospective customers you can request additional support via your AWS Partner Network (APN) or Partner Development Manager (PDM).
• Proactive: In some cases, when AWS may have a direct relationship with your prospect, they will proactively want to work with you on this opportunity and will provide you with additional help and support in order to close the opportunity. When it comes to AWS originated opportunity, AWS will look to co-sell with an appropriate partner who have the right solution and credentials to ensure that the customer outcomes are served.

That is why co-selling is not just something you do as a secondary option but a must-do if you want to succeed with an improved revenue stream. But how do you make people recognise you as a good partner in the first place? What can you do to make your organization look good to AWS?

The problem with the way ISVs do co-selling

As most ISVs are tech-driven they tend to not have the best commercial structure that brings desired sales outcome. The leaders in such organizations rightfully believe they have a great product-market fit, but aren’t leveraging all the routes-to-market. There are over 40,000 ISVs listed on the AWS Marketplace and only a small proportion are able to turn their products into success. Why is that?

As per VeUP research, the reason for this scenario is that most leaders think if they build a good product, business from the AWS ecosystem will come. Based on our understanding of APN, this doesn’t work. What you, preferably as an AWS Alliance leader, need to do is cultivate your relationship and build confidence with AWS that you have a superior product that addresses specific customer needs.

The initial actions an AWS partner must do

Starting with your partner status, have you taken your AWS partner level from the Enrolled status through to Validated and subsequently Differentiated status? This is important, as the first place that any AWS representative will look is your Partner Scorecard, within the Partner Central portal, to find your status. If you have a great product but your organization is only at Enrolled status, the different AWS selling teams will not see you as a good bet for a partner who can deliver effective sales growth within the AWS ecosystem .

Therefore, to move up the partner tiers, pick the Software partner path, complete the Foundational Technical Review (FTR) and get to the Validated Status. Then look to apply for additional AWS Programs that can boost internally your AWS capabilities and externally your AWS credibility. Next make sure your partner listing is up to date and reflects your capabilities e.g. the number of deployments made.

AWS Co-selling & your reputation at AWS

Now as an ISV, you did the right fundamental steps on the APN – you listed your product in the AWS Marketplace, created your listing and conducted a FTR. This is where most leaders stop working on their AWS partnership, believing that AWS will be passing opportunities to them. But that is never the case as we always hear the leader bemoaningly state “why is no one buying our products” and “I’m listed in the marketplace but I see no sales.”

Now we come to the part where you will find out what is the cure to the problem.

The ‘secret sauce’ to succeed with AWS co-selling is to implement actions that builds your reputation at AWS.

Reputation matters as AWS needs to see the value you bring to your partners and your chance of success in converting prospects to paying customers in the AWS Cloud. Higher the reputation you have, more confident AWS will be in engaging with you on deal support and proactive prospect sharing.

Partner reputation & AWS Alliance Strategy

Having an AWS Alliance strategy that includes your co-selling plan is a very big part of building that reputation with AWS. It is important to not only define a value proposition that targets customers directly but also push a secondary value proposition that is targeted at AWS and your co-sell opportunity. Your co-sell plan must include activities around working with your PDM and Vertical seller teams from AWS. Your plan must also find consulting partners with whom you can create private offers as new route to market.

So on the face of it if you do everything correctly you will see success, but reality is that success is something that needs a lot of effort. VeUP has worked with many AWS SaaS partners through our services who had struggled to find success in co-selling and build their reputation at AWS.

At VeUP, we have formulated an AWS Alliance methodology that if executed successfully will increase your chance of success. Just like a super tanker coming to port needing the help of a seasoned pilot, who knows where all the sandbanks and rocky outcrops are, to navigate the waterway and dock the ship, VeUP can help you to navigate your way around AWS and the opportunities with the co-sell program.

Current state of ISVs emphasize features

Most B2B SaaS providers rely on highlighting features whenever they sell their products. Whether it is the website messaging or the sales playbook, emphasizing features is easy as features are what users see when they use the product. But many leaders at such SaaS providers miss the forest for the trees.

It is not the end users who are responsible for making the purchase decisions but the buyers who in most cases aren’t the end users. Even if the sales leaders are aware of this dichotomy, many such leaders still rely on pushing features to these buyers. This pattern is also observed in many AWS partners we have had observed at VeUP.

Benefits will showcase the perceived value

Now there is nothing wrong in mentioning features in all of your messaging. But the more effective way of selling is by showing the products’ perceived value to the buyers’ organizations.

Now you will ask, then how does one show the perceived value without relying on the feature set the users want? This is where one must look to identify the functional benefits & emotional benefits that your SaaS product provides. Messaging that relies on benefits to show the perceived value is a proven selling technique that helps SaaS leaders close deals faster, with clients who could have a significant impact on their turnover.

There are two types of benefits that your commercial leaders should rely on:

• Functional benefits: How does your product improve functional or business outcomes for your buyer and end user(s). Few examples for SaaS products include, but not limited to, time saved, revenue increased, faster transactions, reduced turnaround time, costs cut, reduced incidents etc. This is the one that quite a few SaaS companies do identify early on during the bootstrap phase of the product but still fail to incorporate this aspect in a serious manner across their messaging channels.
• Emotional benefits: How does your product improve the emotional wellbeing of your buyer and end user(s). Few examples for SaaS products include, but not limited to, feeling comfortable and nurtured, feeling secure, better knowledge, work smarter, feel trustworthy etc. Many leaders still believe unlike B2C SaaS firms where it does make sense to use emotional messaging, B2B SaaS firms need to emphasize rational messaging, which includes features. But current research seem to point in the other direction. One noteworthy research into 1400 successful messaging campaigns, has come out stating messaging that relies on emotional benefits has seen almost double the success (31% vs 16%) compared to the purely rational messaging.

How to define suitable benefits in your messaging

This where you will need to bring in your Cloud COE or team of cloud champions in a session facilitated by the Product Owner, and put themselves in the shoes of the targeted buyer persona and for each feature on your list, ask “if I am the buyer, what do I get from that?”.

By doing so you will find the team has shortlisted suitable functional benefits aligned against your product. Now once you have defined the functional benefits, in that same session make the participants take the features and functional benefits into account to define how does your SaaS product make your customers feel.

The outcomes from this session must be sent to the marketing team who should embed the benefits in the different messaging channels. Few examples of the many tactical actions the SaaS marketing team can do are:

• Mention the emotional benefits in the H2/H3 Heading tags on your website
• Highlight on every product web or catalog page the functional benefits aligned against product performance and efficiency
• Define on the pricing page the functional benefits around cost reduction and emotional benefits around stress-free purchase and renewal process

Conclusion

While it’s important for B2B SaaS providers to offer a feature-rich product, highlighting only the features may not be enough to close deals with buyers. To effectively sell their product, SaaS providers need to focus on showcasing the perceived value of their product by highlighting the functional and emotional benefits it provides to the buyers and end-users. By doing so, SaaS providers can differentiate themselves from competitors and build a better relationship with their clients. Therefore, SaaS providers should prioritize emphasizing benefits over features to improve their sales effectiveness and increase their revenue.

When meeting AWS partners for the first time, often the question we are asked is ‘why does it matter for us to develop an alliance with AWS?’. Maybe the partner has a multi cloud offering that reduces their architectural dependencies, or perhaps there is a reluctance to align themselves with a single public cloud provider at risk of putting all their eggs in one basket. All valid concerns, but once the benefits such as co-selling support & joint marketing funds are explained, along with the potential to leverage and be a key member of a thriving global ecosystem, the question soon turns to ‘why didn’t we build this alliance sooner?’.

As cloud based solutions become ubiquitous, there are 3 domains an ISV firm needs to focus on to succeed- Technical, Commercial & AWS Alliance. Though when it comes to AWS Alliance, unlike the former two domains, many partners are stumped on how to leverage AWS as a partner.

An AWS Alliance provides opportunities for partners to grow and expand their business within the AWS ecosystem. The AWS Software Partner Path in particular takes ISV partners on an accelerated engagement, taking advantage of AWS resources and programs. Developing a clear strategy for a partners business and partnership with AWS will help address challenges and reach business growth potential, drive operational efficiency and retain and grow the customer base, all the while growing the reputation through its alignment with AWS.

1. Commercial benefits of the AWS Alliance

Perhaps the most important incentive for developing the alliance is the ability to co-sell and leverage the vast AWS partner ecosystem. This is indeed a strategic benefit where partners can unlock the ability to co-sell via the APN Customer Engagement (ACE) program and capitalize on the opportunity to partner with other ISVs and resellers to grow new revenue streams for your solution. Like all alliances it is important that the partnership is mutually beneficial and therefore logging opportunities on ACE and developing the relationship with AWS account managers is critical. This step in your sales channel process creates a window for AWS to see the potential of your product, build your network with key AWS stakeholders and make the warm intros to the AWS account teams. This should ideally enable you to get the right type of support to help you convert your opportunity to a paid customer.

Adopting the AWS Marketplace and developing a strategic Marketplace listing is another valuable route to market, streamlining procurement and giving customers the ability to choose from a variety of pricing options. But the hidden value for ISVs is through adopting the Consulting Partner Private Offers programs, allowing custom pricing of your solution and developing strategic selling partnerships with other AWS partners. Here you can develop joint use cases for your products and services allowing other partners to actively sell and market your solution often relieving you of licencing requirements and creating the opportunity to co-market your joint offering.

2. Adoption of frameworks and best practices

As you grow with AWS so should the adoption of AWS frameworks and best practices grow within the organization. Obviously this is a huge benefit from an architectural perspective, ensuring that your software or products are validated via a Well Architected Review (WAR) and Foundational Technical Review (FTR), which is also a prerequisite to unlocking most alliance incentives. Additionally, these validation processes will improve customer confidence as your solutions are approved by a trusted global partner such as AWS. Validating the solution is also an important milestone in the alliance itself as it shows your commitment to AWS and gives their sales teams the confidence to go out and actively sell your solution within the partner ecosystem.

Your AWS business must be secure and built for scale and therefore driving process internally for Cost Optimization, Go-to-Market, Security and Project Delivery are just a few areas where you can leverage the experience and industry best practice of AWS resources and SMEs. Here you can build internal capability, improve operational efficiency and delivery of services to your customers.

3. AWS Partner Programs can optimize costs

There are avenues to explore when it comes to partner programs. Adopting programs such as ACE will grow your commercial opportunities within AWS, including becoming eligible for ISV Accelerate that will allow you to access leads from AWS. It is also at this point that Market Development Funding & Innovation Sandbox also become available to your organization, offsetting good part of marketing campaign spend and receiving technical and usage credit support to innovate and develop your products’ capabilities.

As a consultancy firm, VeUP has built knowledge and expertise to exclusively support AWS partners to succeed within the AWS alliance & ecosystem. Our consultants and solutions architects are enabling our partners achieve success within not just the technical & commercial domains, but also the AWS Alliance domain, unlike other consultancies out there. We support the partners to navigate the high seas on AWS ecosystem and not get overwhelmed by the actions needed to succeed as an AWS Alliance partner.