08
Feb
The Total Economic Impact™ of the Microsoft commercial marketplace
In today’s fast-paced, AI-fueled business environment, organizations require a growing number of cloud solutions. In trying to meet this demand, software as a service (SaaS) sprawl can lead to wasted investments and cost overruns. Research by Forrester found that cloud marketplaces can minimize this challenge by helping organizations balance speed and agility.1 The Microsoft commercial marketplace allows customers to centralize their cloud portfolio, taking complexity out of the purchasing process. In a 2023 Total Economic Impact™ study commissioned by Microsoft, Forrester Consulting found the Microsoft commercial marketplace delivered customers a 587% return on investment (ROI) with a payback period of less than six months.
By connecting customers to our ecosystem of more than 400,000 partners through one trusted source, the marketplace simplifies and accelerates business-to-business (B2B) tech commerce. Forrester Consulting interviewed 10 customers that actively use the Microsoft commercial marketplace to quantify the opportunity. The research found that for a composite organization based on the interviewed customers the marketplace:
- Reduced employee time for onboarding new vendors by 75%.
- Reduced employee effort required for each procurement engagement by 50%.
- Optimized Azure cloud budget by recapturing up to 50% of at-risk spend.
“I can actually do procurement faster. I can make sure that my products get released faster, bringing benefits faster to the company.”
Director of IT, Financial Services
Simplify procurement processes
Enterprise buying is complex, especially in tech and with rapid advancements in AI. Procurement teams must navigate a multitude of choices, manage vendor relationships, and continuously adapt to emerging trends while ensuring investments meet immediate needs, as well as align with long-term business strategy in a cost-efficient manner.
Ultimately, organizations find the most success with the marketplace when the procurement team, or buying office, becomes involved at an organizational level. As a single destination to discover, try, and purchase certified solutions, the marketplace helps customers “make informed procurement decisions without having to devote significant employee time to researching, evaluating, and selecting a vendor,” according to interviewees in the Forrester Consulting study. Using the marketplace reduced employee effort required for each procurement engagement by 50%.
“We have readily available options for our suppliers that are already vetted and available. [Our teams] can adopt without having to go through elongated procurement processes, additional orders, and administrative processes.”
Director of Global Supply Chain, Telecommunications
For finance teams, interviewees reported in the Forrester Consulting study that leveraging features of the marketplace such as automated invoicing and billing systems “reduced manual data entry, eliminated billing errors, and expedited overall invoice processing and billing cycles.” Adopting the marketplace improved time savings for the payments and finance purchasing team by 30%.
“Once I buy a solution from the marketplace, I don’t have the nightmare of managing invoices and checking for accuracy.”
Executive Director, Government
Onboarding new vendors can be slow and cumbersome, at times delaying a customer from deploying new technology solutions. Using the marketplace reduced time required to onboard new vendors by 75%. Vendors can submit required documentation and access guidance and tools directly in the marketplace, reducing the administrative burden of reviewing paperwork and walking vendors through new processes.
“The Microsoft commercial marketplace has been really useful for fulfilling my day-to-day activities and facilitating my vendor relationships. …The contract and red tape is handled by Microsoft. I don’t have to go deep into my NDAs (non-disclosure agreements), legal documents, or contract redlining, and all those kinds of things.”
Director of IT, Financial Services
Maximize cloud investments
As cloud investments grow, customers are looking to maximize value. Many of the customers interviewed by Forrester Consulting for the study had consumption commitments with Microsoft Azure—contracts providing discounts on infrastructure once a customer meets a certain spending threshold.
The Microsoft commercial marketplace is unique in that it automatically counts 100% of eligible purchases towards a customer’s commitment, ensuring more value for the investment. Customers can quickly search Azure benefit-eligible solutions directly in the Azure portal.
Because of this benefit, Forrester Consulting found the marketplace helped customers optimize their Azure commitments, recapturing up to 50% of at-risk spend. Those interviewed by Forrester Consulting are in good company. According to Microsoft data, more than 85% of customers with consumption commitments are already buying partner solutions via the marketplace to maximize their investments.
“It’s dollar for dollar. Whatever we spend, 100% of it goes to our spend commitment, and that was a huge deal. For some of [Microsoft’s] competitors, [that’s] not the case.”
IT Sourcing Specialist, Manufacturing
Marketplace customers also got more out of their cloud budgets by avoiding costly proof of concept fees. Prior to using the marketplace, customers interviewed by Forrester Consulting said they often had to pay up-front fees for a proof of concept to vet new solutions. The marketplace makes it simple to access trial options, including free trials ranging from 30 days to six months, so customers can feel confident before they buy.
Get started with marketplace
The Forrester Consulting Total Economic Impact™ study found the Microsoft commercial marketplace helps customers simplify procurement and maximize cloud investments, ultimately leading to “cost savings, streamlined operations, and increased agility in software acquisition and integration.” As customers look to cloud solutions to solve business and technology needs, the marketplace makes it easier than ever for organizations large and small to access these tools quickly, securely, and efficiently.
- Get the free Forrester Consulting study: The Total Economic Impact™ of the Microsoft Commercial Marketplace.
- Read how Microsoft was named a Leader in cloud and applications-centric marketplaces by IDC MarketScape.
- Learn more about the Microsoft commercial marketplace.
1The SaaS Marketplaces Landscape, Q2 2023 | Forrester.
The post The Total Economic Impact™ of the Microsoft commercial marketplace appeared first on Microsoft Azure Blog.