How to Develop Strategic Cloud Partnerships

There are many ways to engage with a cloud provider. If your company is at the right stage, and your product is a good match, a partnership can drive significant growth. So, how do you actually know? This section outlines how cloud partners could add value to your company and customers, what makes a good fit, and alternatives to consider if your company isn’t ready just yet.

Firstly, as a partner, you get access to the wide range of technical resources that any cloud provider already has. You could use these resources to optimize your architecture to scale with projected growth, or develop a new proof of concept with the cloud provider’s guidance and investment so that your internal engineering resources don’t have to be diverted from their current priorities.

Secondly, the cloud provider’s sales team could help with selling on your behalf. Earlier in my career, I worked with a tiny 5-person company that had partnered with a cloud provider to help them scale. Through the partnership, they now had access to over a thousand salespersons and their contacts. By offering the right incentives and aligning their product to the cloud provider’s roadmap, the tiny company grew their sales footprint and ended up having a very exclusive product relationship with the cloud provider and became a top co-selling partner. Their strategic partnership with the cloud provider continued to grow as did the company, which now has hundreds of major enterprise customers – a scale they were able to achieve because of the partnership.

In addition, most cloud providers have solution marketplaces that allow software companies to transact on the cloud provider’s paper. For most companies that are looking to reduce time to signature, transacting through a cloud provider’s marketplace and on the provider’s paper can lend instant credibility and significantly lead to deal time. For instance, I once saw a start-up close a $2.5 million deal in three months. Without the partnership, closing the deal would have taken three times as long. A cloud provider’s marketplace can also act as a discovery platform (through organic interest and marketing campaigns), providing new leads to companies that would not have otherwise surfaced.

Lastly, being backed by a cloud provider aids marketing efforts by giving your company’s credibility a huge boost. Some of the many benefits include reaching new markets by having your products and company showcased on the provider’s websites and case studies, and by generating new leads and gaining mindshare through joint go-to-market campaigns.

However, the benefits are moot if your company doesn’t have sufficient resources to handle significant deal flow, or if its products aren’t a good fit. Be realistic as you assess the two questions below.

Do You and the Cloud Provider Serve the Same Market?

These partnerships generally work best for B2B products simply because sales teams at most cloud providers support enterprises and small/medium corporations for cloud-based services.

To illustrate: returning to the example of the tiny 5-person company, the solution they had created enabled compliant online archiving for businesses. Archiving can be tricky because there are compliance requirements to adhere to, and these requirements are constantly evolving. Stored data also needs to be retained and searchable, and comply with regional requirements including privacy and data storage and passage . Partnering with a cloud provider offered benefits to both the company, which was able to scale its services significantly while minimizing incremental resources, and the cloud provider, that was able to expand the value it provided to its customers via service offerings.

You’ll also need to understand how to position your company’s value proposition in the context of the cloud provider’s customer base, and explore overlaps in your customer segments. For example, if your solution provides core banking as a service, your company will be very appealing to any cloud seller whose account list contains a bank, whether regional or global. Due to the fundamental nature of this offering, the total addressable market overlap between your company and the cloud provider’s will be large, which makes a compelling case for partnering with a cloud provider and jointly going to market.

What Can Your Current Sales Force Handle?

Your sales team needs to be ready to both receive and close leads generated by the partnership with the cloud provider. Let’s say the partnership generates over 100 leads a month, and you’re only able to handle 15 at a time. This bandwidth constraint limits growth opportunities significantly for both your company and your cloud partner, and it is important to set expectations up-front on partnership goals and capacity before engaging in a joint sales motion.

What if Your Company Isn’t Ready Yet?

It can be disappointing to acknowledge that this is not the right time to partner deeply with a cloud provider, but this also represents other opportunities for growth that might be a better fit. After all, beyond a partnership, there are many other ways for you to engage with a cloud provider. Use this as an opportunity to explore the different ways you could benefit from their services and build towards a partnership.

Most cloud providers offer programs for startups that have been in business for a limited period of time or earn revenue below a certain threshold. They offer a sampling of services to these companies, and generally provide cloud credits without requiring any commitment from the start-up itself. Look up the different programs and apply to the ones that better suit your needs. This gives you a chance to test assumptions you may have about the partnership before committing resources, such as migrating to a different cloud provider or expanding your sales team to gear up for higher deal flow.

More importantly, start building your network and establishing your presence in the cloud provider’s ecosystem. There are aspects of the partnership that you could achieve on your own such as getting listed on marketplaces offered by cloud providers. Partnering with established players in the cloud provider’s ecosystem could incentivize potential cloud partners and potential customers to reach out to you if they find your solution interesting. The marketplace listing can also be a powerful tool for breaking into the cloud provider’s ecosystem as most marketplaces allow you to unlock incentives based on the level of business you transact through your listing.