Vendor Marketplaces from a commercial perspective
Vendor marketplaces offering applications, application extensions and services to customers are gaining importance. Most people are very familiar with these concepts of purchasing applications or subscribing to services in cloud environments in their private life. However, the usage of these kind of marketplaces in the corporate environment is only starting to spread.
The number of offerings in vendor marketplaces is growing fast
Most major vendors for infrastructure or application services are offering online marketplaces, where customers can purchase or subscribe to native applications and services as well as products from 3rd party vendors. The different marketplaces usually offer partnership programmes for 3rd party vendors in order to offer their applications and services via the marketplace. Even though the general idea and display of the different vendor marketplaces are rather similar, the offerings and requirements of each marketplace may differ significantly. The number of applications and services as well as partners for each marketplace increased significantly over the past months and years.
Depending on the infrastructure and application services used in your organization your employees could have access to variety of different vendor marketplaces such as for example the Azure or AWS marketplace for infrastructure services and SAP or ServiceNow store for application services and many more. These vendor marketplaces are usually available to all employees using these application or infrastructure services and give them easy and quick access to a huge amount of application and services at the push of a button.
There are challenges and commercial implications associated with using marketplace offerings
Whereas these marketplaces offer an enormous potential and many business opportunities to organizations, there is also a downside to the flexible setup of vendor marketplaces. The terms and conditions, pricing and invoicing options for purchases and subscriptions from 3rd party vendors are unfortunately not standardized and mostly chosen by each vendor according to their preference. In addition, the possibility of central administration is entirely contingent upon the vendor marketplace. This may lead to a wide-spread purchasing spree of employees within these marketplaces, which depending on the marketplace cannot be controlled centrally. Therefore, the possibilities of implementing control mechanisms or restricting purchasing rights for employees should be evaluated carefully to avoid exploding costs and potential compliance issues.
Considering the evaluation of new partners and products are not necessarily vetted by the vendor as proprietor of the marketplace, this might lead to compliance, compatibility and security issues. The customers cannot rely on the product quality, existing terms and conditions as well as support structure of their trusted vendor. Instead, the vendors often make the 3rd party vendors responsible for their own products and services including the support offered behind those products. In some marketplaces it is possible to limit the application and service portfolio for your organization based on your security, compliance and architectural regulations.
In general, unfortunately not all marketplaces offer central administration, invoicing and control for organizations. The overall use of these marketplace by your employees for business purposes should be assessed carefully and possible restrictions or standard processes implemented to ensure there are no nasty surprises.
Author: Jessica Loi Müller