The Total Economic Impact™ Of AWS Marketplace

Procurement Efficiency

Evidence and data. Before using AWS Marketplace, the interviewees’ organizations had mature procurement processes. After an initial trial period with AWS Marketplace, these organizations experienced procurement efficiency gains, including reduced time for solution discovery, contract drafting, procurement processes, and invoice processing.

• Interviewees reported that solution discovery was a major pain point in their traditional procurement processes. Procurement teams often received requests from different business units, requiring extensive back-and-forth communication with MSPs to find the right software solutions. AWS Marketplace provided a centralized catalog where procurement teams and business users could access organized and searchable vendor information.
  
  The cloud FinOps lead at an online food delivery company shared: “[With AWS Marketplace,] we can see what’s available. We can see terms and conditions right off the bat. We have contact information for the seller; it’s all really streamlined. There are efficiencies around discovery, 100%.” The technology procurement manager at an IT services company also commented that searching for vendors was much quicker in AWS Marketplace not only because of the available information, but also because of the support from the AWS team. He said: “I do feel like we can definitely lean on the AWS service team and they come back relatively quickly with suggestions. The biggest value is time.”
• Traditionally, procurement teams managed the coordination between legal departments and MSPs or vendors and dealt with customized contracts that required extra communication. Interviewees’ organization utilized the standard contracts available through AWS Marketplace avoiding repeated reviews and streamlining the process. The procurement excellence lead at an IT services company shared: “I would say there’s a one-day savings. You can get the contract terms right away versus waiting for a turnaround. Once we get the document, we have it readily available in AWS Marketplace. … Having access to those documents is almost instantaneous.”
• When procurement teams identified a solution, their tasks typically began with contracts, including confirming terms, reviewing details, signing contracts, and onboarding vendors. Traditional channels involved significant time spent coordinating with the right people and documents, leading to inefficiencies. AWS Marketplace reduced waiting times by offering standard contracts or private offers. The technology procurement manager at an IT services company said, “Forty-five percent of the entire procurement process is reduced from a timing perspective whenever we have a transaction through AWS Marketplace.” The cloud manager at a financial services company also commented: “Before, it may have taken us a couple of weeks to onboard a vendor, get them on the system, and pair them. Now we would be able to pair them under AWS Marketplace.” The head of UK infrastructure and hosting at a utilities organization said, “[Procurement] likes to buy things from AWS Marketplace because they don’t have to spend 90 days, and I remember one person saying they can do it in less than a month.”
• Interviewees also reported faster invoice processing with AWS Marketplace due to consolidation. Instead of processing individual invoices for each solution, AWS Marketplace consolidated all transactions into a single invoice. The procurement excellence lead at an IT services company shared: “I definitely think that processing one invoice and one payment one time versus five invoices and five payments is an added benefit. I would say two or three people are processing that invoice and payment, so you’re probably saving about three hours of work per invoice.”

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The composite organization transacts 10 software solutions via AWS Marketplace in Year 1, 15 solutions in Year 2, and 20 solutions in Year 3. The increased transaction volume is attributed to the confidence and efficiency gained from previous experiences.
• With traditional procurement channels, the composite organization spends 20 hours on each solution discovery. Using AWS Marketplace reduces this time by 70%.
• AWS Marketplace saves the composite organization 8 hours of contract drafting per transaction.
• The composite organization spends 160 hours on the procurement process using traditional channels, from contract review to vendor onboarding. Using AWS Marketplace reduces this time by 60%.
• On average, the composite organization saves 2 hours per invoice through AWS Marketplace consolidation.
• The fully burdened hourly rate for a team member involved in the discovery phase is $44, and the fully burdened hourly rate for a procurement team member is $61.

Risks. The expected financial impact is subject to risks and variations based on several factors that may reduce or slow the recognition of this benefit, including:

• Existing procurement methods that may hinder the transition to AWS Marketplace.
• Organizational changes required to use AWS Marketplace effectively.
• The adoption rate of AWS Marketplace.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $165,000.

Deployment Efficiency

Evidence and data. After completing necessary procurement processes in their prior environments, interviewees found that deploying software solutions with previous purchase channels was less smooth than expected. However, with AWS Marketplace, organizations experienced improved deployment efficiency.

• With previous purchase channels, there were many coordination tasks between contract signing and solution deployment. The cloud FinOps lead at an online food delivery company said: “Before AWS Marketplace, the process included logging into [the online electronic agreement platform] and signing several areas in the document. We could potentially make a mistake with a purchase order number because of a missed email or something like that. Then, we’d probably get an email with some license key information and would need to copy it.” Using AWS Marketplace lowered the chances of making mistakes and streamlined the process.
• Many solutions transacted through AWS Marketplace could be deployed directly in an organization’s cloud environment, saving time and resources from necessary security checks if the solution needed to be installed to the cloud.
• In the AI era, companies are purchasing more big datasets and development tools. Interviewees noted that transacting these tools via the AWS Marketplace was more efficient, with almost simultaneous deployment. The procurement excellence lead at an IT services organization shared that their organization automatically approved development tools like Amazon Machine Images on AWS Marketplace because AWS means less risk for us. On the deployment side, he commented: “Buying a development tool through AWS Marketplace gives us the ability to have it right away. Because we’re buying it through AWS Marketplace, it’s already there, and it’s already installed. Time to market is faster by probably between 20% and 30%. I would also say we saved internal headcount costs.”

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• Thirty percent of the total SaaS solutions transacted in AWS Marketplace are new to the composite organization. This includes three new SaaS solutions in Year 1, five in Year 2, and six in Year 3.
• With AWS Marketplace, the composite organization saves 20 days per each new SaaS solution on security checks and deployment.
• The organization purchases five new development tools or datasets in AWS Marketplace in Year 1, increasing to 10 in Year 2 and 20 in Year 3.
• The composite organization saves four days on development tool or dataset deployment with AWS Marketplace.
• On average, the newly purchased solutions affect five senior engineers, and they have a fully burdened hourly rate of $75. The 30% faster time to market with AWS Marketplace translates to a 30% productivity recapture rate for these engineers.

Risks. The expected financial impact is subject to risks and variations based on several factors that may reduce or slow the recognition of this benefit, including:

• The volume of solutions transacted through AWS Marketplace.
• The efficiency of previous purchase channels and deployment processes.
• The size and scope of the engineering team and the projects they are delivering.

Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $244,000.

Customer Benefits from Spending on AWS Marketplace

Evidence and data. AWS customers that spend consistently with AWS may receive additional discounts on their total AWS spending. The head of UK infrastructure and hosting at a utilities organization shared: “One of the big incentives for us was that spend on AWS Marketplace unlocked customer benefits for us. That’s how we first started looking at it. If we buy stuff through AWS Marketplace, not only might we get a great deal, but it’ll also unlock other benefits at AWS. So that was certainly the thing that first got people interested.” Most of the interviewees’ organizations found that spending more money with AWS cloud and AWS Marketplace resulted in more benefits from AWS.

• Interviewees also leveraged AWS commercial credits on vendor solutions. Buyers received additional credits when purchasing vendor solutions listed by AWS through AWS Marketplace.
• In addition to credits from discount programs, interviewees’ organization also benefited from features like Free Trials. The head of UK infrastructure and hosting at a utilities organization reported that their business users could try new solutions freely, giving them a low-cost proof of concept.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The composite organization’s total AWS spend is $70 million per year.
• The average contract value of solutions purchased through AWS Marketplace is $300,000.
• With additional AWS Marketplace spending, the composite organization receives another 0.1% discount on total AWS spending. Using quarterly commercial discounts on certain vendor solutions results in the composite organization receiving an average 1% discount on AWS Marketplace spending.

Risks. The expected financial impact is subject to risks and variations based on several factors that may reduce or slow the recognition of this benefit, including:

• Total customer benefits from spending on AWS Marketplace.
• The vendor solutions purchased through AWS Marketplace.

Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $240,000.

Implementation Cost Savings

Evidence and data. A growing trend at interviewees’ organizations is for internal business units or engineers to prefer a self-serve model over working with certain MSPs when purchasing software solutions. Interviewees reported that their internal teams had gained more knowledge, although MSPs often pushed for extra, unnecessary professional services. The technology procurement manager at an IT service organization shared: “We have clever people here, especially our colleagues who work in the technology space. They tend to not require any hand holding or any professional services when it comes to actually utilizing the software that we purchase. And I noticed for a long time that some of these traditional resellers would often try and sell their managed service solution. … There were a lot of conversations, and they were pushy in that regard … but it wasn’t necessarily fit for purpose here at our organization.” Internal business units or engineers started leveraging AWS Marketplace more since it gave control back to the team and saved professional services costs.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The composite organization purchases professional services for 20% of the solutions it implements each year.
• The average implementation support cost is $100,000 per solution. With AWS Marketplace, the composite can save 50% of the implementation support cost.

Risks. The expected financial impact is subject to risks and variations based on several factors that may reduce or slow the recognition of this benefit, including:

• The internal capacity and the team’s skill sets.
• The cost of support and the number of solutions implemented.

Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $292,000.

Unquantified Benefits

Interviewees and survey respondents mentioned the following additional benefits that their organizations experienced but were not able to quantify:

• AWS Marketplace enables private offer negotiation, which allows companies to collaborate directly with vendors on custom pricing and terms. With a new procurement channel, interviewees reported that their companies could explore new vendors or migrate previous relationships to AWS Marketplace with the Private Offers option. Interviewees appreciated the flexibility of continuing their direct negotiations and existing vendor relationships via AWS Marketplace while leveraging Private Offers to gain the procurement benefit.
  
  The technology procurement manager at an IT services company shared: “We have our monthly invoices, which clearly depict the software procured with the relevant costs and the term that we agreed to execute. It’s not like we have our hands tied from an agreement perspective. We can negotiate with the supplier directly and then have that agreement uploaded into the private offer in the AWS Marketplace, which means that we’re bound by well-negotiated terms, which is very helpful for us.”
  
  Interviewees found that transacting by private offer was very efficient, and the same interviewee noted: “From a time perspective, the ability for a supplier to create a private offer and have us as a client accept that private offer, I’ve seen that take one hour or two hours. Whereas historically, having a reseller raise a quotation, and having us sign the quotation, generate a purchase order, and distribute the purchase order, that could take a week.”
• The customer experience provided by the AWS Marketplace team reduced buyer stress. AWS Marketplace offered interviewees’ organizations a low-touch transaction mechanism, although they could engage professional support from the AWS team as needed. Interviewees valued the expertise and support provided by the AWS team. The senior manager of vendor sourcing at a fintech company estimated that AWS support had saved two-thirds of his time. He commented: “AWS Marketplace is an effective transaction mechanism. There are good people working there, which is nice because they’re very helpful. So they know what solution to recommend. They’re able to find us the resources we need. We don’t have time to engage different vendors ourselves. If you are comparing three different solutions, you can maybe reduce the time of three different contacts to one contact with the help of AWS.”
  
  Interviewees also mentioned that the AWS team’s customer service quality improved their internal customer service efforts by helping solve technical issues. The head of UK infrastructure and hosting at a utilities organization shared: “A lot of the work we did during the past 12 months enabled us to quickly get to the bottom of unhappy customer demands and understand what was really going on to fix them. From a reputational point of view, I think the way we’ve used AWS and AWS Marketplace over the past year has helped us improve the customer experience. We used the whole sentiment analysis and everything there. It’s going to exponentially improve the way we deal with our customers.”

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement AWS Marketplace and later realize additional uses and business opportunities, including:

• The Private Marketplace can potentially meet special procurement requirements. Enterprises have the option to set up their own Private Marketplace within AWS Marketplace. This allows organizations to curate lists of vetted software solutions that comply with their policies and grant controlled access to meet internal compliance requirements. Some interviewees have started exploring the Private Marketplace and believe it can benefit their organizations. The procurement excellence lead at an IT services organization shared: “Now they’ve offered Private Marketplace, which gives us an opportunity to put in a check and balance barrier for third-party risk management. I think that’s good.”
• AWS Marketplace offers AI-related tools to help organizations achieve their AI goals. AWS Marketplace offers various AI-related tools that organizations can leverage to achieve their AI goals. Organizations are looking for ways to boost efficiency by integrating AI into various aspects of their operations, and interviewees are using specific AI tools available on AWS Marketplace to meet these demands. The head of UK infrastructure and hosting at a utilities organization said: “There are some really good examples of how we’ve speedily done some things in recent months, and it’s been on the back of AI, and it’s been on the back of AWS technologies. We are definitely leveraging AWS Marketplace spend for the AI models.”

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).