The Six Five On the Road at AWS re:Invent with Matt Yanchyshyn

By Patrick Moorhead - December 1, 2023

On this episode of The Six Five – On The Road, hosts Daniel Newman and Patrick Moorhead welcome Matt Yanchyshyn, GM at AWS Marketplace and Partner Engineering for a conversation on what is driving the growth and adoption of AWS Marketplace and what buyers and sellers can expect in the future.

Their discussion covers:

  • An introduction from Matt Yanchyshyn as GM at AWS Marketplace
  • What factors drive the growth and adoption of cloud marketplaces
  • How important is AWS Marketplace to the AWS business and their partners
  • What buyers and sellers can look forward to from AWS Marketplace in the near future

Learn more about AWS Marketplace on the company’s website.

Watch the video here:

 

Or Listen to the full audio here:

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Transcript:

Patrick Moorhead: The Six Five is on the road in Las Vegas at AWS re:Invent 2023. We’re having incredible conversations about great technologies, useful technologies to really move the needle inside of businesses and everybody out there. It’s great to be here, Dan, great to see you, my friend.

Daniel Newman: It is good to be here, Pat. This is one of the marquee moments of every year if you’re a tech analyst or if you are a user of technology, because AWS has been setting the tone and the pace for the cloud for nearly two decades, as you remind me regularly, back when I was still in college and you were… anyway. Yeah. Look, it’s great to be here. These conversations are always a lot of fun, Pat, and I have to say, I’m just really excited to kind of see this whole chips to SaaS experience that AWS is building. Gosh, what a massive progression this company has had over the past more than 10 years.

Patrick Moorhead: Yeah. It’s been incredible, and one of the key hallmarks, and it interestingly even goes back to the formation of Amazon.com, which is about simplicity. And part of the element of simplicity is sometimes being able to just go into an app store and grab an app and pull it down. And I know it sounds really easy and trivial because we do it every day on our own personal electronic devices, but a lot of customers out there are able to take advantage of the AWS Marketplace for applications from pretty much all the way from born-in-the-cloud apps to companies that have been around literally for over 50 years and are putting their software on marketplace. It’s my pleasure to introduce Matt, who runs AWS Marketplace, to the show. Welcome to Six Five, first time. Thanks for coming on.

Matt Yanchyshyn: Thanks for having me. Appreciate it.

Patrick Moorhead: Yeah.

Daniel Newman: Yeah, Matt. It’s great to be here. Rumor has it you’ve maybe done a few podcasts in your career.

Matt Yanchyshyn: Yeah. Yeah. I’ve been with AWS for 11 years now, and I used to run the This is My Architecture video series, so I’ve done quite a few.

Patrick Moorhead: What’d you say, 600 or something like that?

Matt Yanchyshyn: We had about 600 episodes.

Daniel Newman: Gosh. That’s great.

Patrick Moorhead: A lot. Impressive.

Daniel Newman: Yeah.

Patrick Moorhead: I love it. Gosh. I hope- We need to rise up to this occasion.

Daniel Newman: So-

Patrick Moorhead: We have a pro here.

Daniel Newman: Yeah. We’ve got an absolute pro here, and now you are the general manager of the Marketplace, and extended into Services as well. Let’s start there. Let’s just get the couple of minute background. Talk a little bit about what you’re doing here at AWS.

Matt Yanchyshyn: Yeah. Like I said, I’ve been at AWS for 11 years. I started in the field. I was a solutions architect working really closely with customers and partners, and then gradually moved into the Services organization. And I’ve run a few different services at AWS, with Marketplace specifically and other partner services. It’s really all the software, all the SaaS software and other types of software we build to help partners be successful with their customers on AWS.

Patrick Moorhead: I love it. You run the business. You’ve got all-encompassing. The buck stops with you at Marketplace.

Matt Yanchyshyn: That’s right.

Patrick Moorhead: I love it. Let’s dive in here. What is it about Marketplace that defines its growth? What is happening out there? Is it as simple as, hey, it started this year, it took a while to do? But I’m feeling a hockey stick. I meet with your partners, who quite frankly, five years ago, if you had asked me, “Hey, would they be on AWS Marketplace?” I would say an enthusiastic, “No, unless something changed a lot.” Something changed here. What’s going on there?

Matt Yanchyshyn: Marketplace is almost as old, in AWS terms, as I am. It’s been around for over a decade, and so it started around the same time as when I joined AWS. And when it first started, it was really self-service oriented, really what we’d call infrastructure partners. I’d say that there were actually a lot of yeses from partners.

Patrick Moorhead: Maybe the picks and shovels of infrastructure?

Matt Yanchyshyn: Yeah. Security, data partners, storage, bread and butter of kind of cloud usage, a bit like AWS itself with its services. And I think what you’ve seen, certainly whether it’s a hockey stick or just sort of sustained growth, what we’ve really seen the last couple years is a lot of business applications come onboard and a lot of those more sort of enterprise focused SaaS applications. Just this morning, we announced a strategic partnership with Salesforce.

Patrick Moorhead: Yes.

Matt Yanchyshyn: They’re going to be selling through-

Patrick Moorhead: Saw that.

Matt Yanchyshyn: … Marketplace.

Patrick Moorhead: Got pre-briefed on that.

Matt Yanchyshyn: Yeah.

Patrick Moorhead: That is incredible, for-

Matt Yanchyshyn: I-

Patrick Moorhead: … CX and everything they do.

Matt Yanchyshyn: Yeah. That’s a shift. We’re starting to see, really, all types of software that customers would use in the cloud, in addition to data and other things like professional services that it wasn’t a thing to buy through Marketplace a decade ago. We’ve seen growth along a few different dimensions over the last few years.

Daniel Newman: That’s actually really interesting. As soon as you said that, I started thinking about all the companies that have seen meaningful monetization shifts in partnership. And obviously, marketplaces are complex. It’s complex because where does deals originate? And we know how much complexity is in the actual global market, because we all use it on our phones, whatever devices. How do we end up getting that application onto our system and then make it accessible at scale? And so, for instance, a partnership like Salesforce, that’s really unique, because the typical… Actually, I’d love for you to talk a bit about that, because the typical motion of someone buying Salesforce was it was always very much like this is just pure SaaS. We are going to start our CRM journey. We are going to go to Salesforce.com. We are going to register an account. We’re going to talk to a salesperson. They’re going to stand up three seats. Now you’re kind of saying, “Look, the way people are actually engaging with their global architecture then running an app in Salesforce is starting with AWS or kind of evolving with AW…” Just talk on how that comes to be, because that is a very different motion.

Matt Yanchyshyn: Well, I think there’s really, we’re seeing two things. You said it yourself at the beginning in the intro. There’s the born-in-the-cloud, and then there’s, I guess, companies and people who’ve been around sort of pre-cloud. And you have this whole generation of buyers, software buyers, data buyers, et cetera, who grew up in the app store generation. And they expect kind of immediacy. They expect procurement now, effectively. And those types of buyers are much more comfortable with a self-service motion, even for massive enterprise applications. And so you are seeing that sort of trend in the market, where people want instant access, instant discoverability, instant kind of procurement, even for things that were kind of, you would never think they’d be bought in that way. But a lot of people, when they think Marketplace, they immediately think app store. And I think what people learn later is that one of the core value propositions for Marketplace is that even for those, whatever you want to call them, enterprise or heavier, longer procurement motions, Marketplace is also super valuable. And so the traditional procurement teams who I talk to every day also like using it, because it makes… They’re still buying using private offers. They’re still buying using their incumbent reseller partners. And they can still do that through the Marketplace and have that count toward their committed spend and all these other sort of enterprise benefits. You see those two motions. It makes traditional enterprise buying faster and easier, but it also caters to this new generation, some of whom are now CIOs, of people who grew up in that app store, kind of give it to me now generation.

Daniel Newman: It comes down to friction, though, like kind of we talked about this on a few other shows. AWS is sort of born on the idea of removing friction. It was the removing it in the buying, basically connecting buyers and goods in a marketplace. That’s actually the Amazon core business. And now, you’re kind of doing the same thing with IT and technology. You’re connecting buyers, and you’re making, hey, I keep saying, “Choose your own adventure.” I don’t know what to call it, but if this is the way you like to buy, buy it this way. If you like to buy it that way, you can buy it that way. But we’re going to make it easy. We’re not going to create extra boundaries, if this is the way you’re used to consuming IT, if this is the way you’re used to consuming applications, because my point is kind of like there are really these kind of entrenched buying motions. As a Millennial myself, I do think that the rising CIOs that you’re mentioning, they’ve always bought this way. They’ve always bought with no friction. They’ve always bought with, they can be up at midnight, tapping away on their keyboards, testing new applications, starting new trials of data platforms or AI tools. They just want to go into their system, log in, start using it. And then if they want to buy more, they buy more. Is that kind of what you’re saying, is you just want to make that expansive from kind of infrastructure to apps?

Matt Yanchyshyn: Yeah. First of all, things are just moving a lot faster these days. You need to respond to new trends, whether it’s generative AI or whatever, a lot faster. And often, that requires looking at additional third party solutions. And the ability to buy them and actually put them in the hands of developers more quickly can sometimes mean life or death in this business world these days. Yes. It’s all about speed, but I think also, even for large and complex applications, we find, we did some research, for example, and 24% of all customer types across the spectrum would prefer to have a free trial before they committed. And so that’s the meeting of, even for a complex application, you still want to kind of try it before you buy. And so that’s the meeting of kind of the old app store or the new app store generation, I guess, and the more traditional procurement. And so with Marketplace, you can sign up for free trials. You can request a demo. You can extend a private offer. You can do all this stuff that, again, meets the customer, sort of what you were saying, where they are. But I think more customers want some of the things that the app store provides, like free trials, like instant discoverability, like the ability to evaluate whether the terms and conditions of the legal contract or the compliance frameworks that it supports meet their needs. And the faster you can get that information, the faster you can buy it and ultimately get it in the hands of developers, so everyone wins in that situation.

Patrick Moorhead: I know it’s always hard to pick your favorite child, but I’ll put you on the spot here. We talked about early on with Marketplace, it was, my characterization, or important picks and shovels. It could be virtualization technology, security, backup, a lot of the things that AWS did. And we also talked about, congratulations by the way, Salesforce putting some of their core applications on the platform as well. Can you talk about some of the most maybe unique compelling ones right now, to give the audience a flavor? Maybe you’re proud of, you’re excited about. Again, you can’t say you love all your children for the answer.

Matt Yanchyshyn: I do love all my partners and my children, but whoever I don’t say here, I’ll get in trouble, so let me, like you said, let me put it, trying to say who’s really impressed me, who jumps to mind. There’s partners who got in really early, and they’re reaping the benefits right now, like Trend Micro. They’re an example of a multinational SaaS-based solution. They made that successful jump to subscription SaaS-based model, and they made that work on AWS, and they’re using all that stuff I talked about on Marketplace, like the SaaS-free trials. They’ve really been taking advantage of our features early and often, and so that’s a big one. You mentioned Salesforce. I’m proud of that one, but also IBM. IBM’s now a big Marketplace company. I think they have 19 or more listings on the Marketplace now. That’s a company, a few years ago, maybe you wouldn’t have seen that.

Patrick Moorhead: I’m with you. We interviewed their executives last year at this event, and they were very excited about that.

Matt Yanchyshyn: Yeah. They’ve been really great to work with, actually, and really excited. I was actually just out with them a couple weeks ago in New York, and they’re just getting started. But also people like, I’ve got to congratulate CrowdStrike. They hit a billion dollars through marketplace. It’s a really key milestone. That’s significant business for them, and that didn’t just happen. That’s because they’re investing in a mix of these features that cater to the enterprise buyer, but also like we’ve been talking about, some of the newer capabilities of cloud marketplaces like self-service discovery. And they’re kind of getting leads and opportunities and conversions on both ends, and it’s leading to big numbers like that. CrowdStrike, Palo Alto. Another one I’ll call out, because it’s a little different and I think in a pretty cool way, is MongoDB, because they’ve actually, they’re kind of radical in a great way. They’re pivoting towards a self-service motion, primarily in Marketplace, which is really interesting, because most software, whether it’s new companies or old companies, are still selling through a private offer sort of traditional human negotiation. And they’re betting big on, how can we attract people and reduce our cost of sales by leveraging self-service through AWS Marketplace? And it’s paying off. It’s working. I think that is innovative, and it’s gutsy, so I like what they’re doing, too.

Patrick Moorhead: That’s cool. We interviewed Mongo executives too.

Daniel Newman: Yeah. Jonathan Davis and-

Patrick Moorhead: talked about this, so-

Matt Yanchyshyn: Nice.

Patrick Moorhead: Yeah.

Daniel Newman: Yeah. We had Jonathan Davis.

Patrick Moorhead: I love how this is all kind of tying together, almost like we planned it, but we didn’t. Just for everybody out there, we did not plan-

Matt Yanchyshyn: No. Yeah.

Patrick Moorhead: … these examples.

Daniel Newman: I believe we talked to Jonathan Davidson last year in their Mongo, their little space over in the Venetian, and they were very excited. Look, you said something that really resonated with me that I think our audience would love to hear about, too, is you talked about CrowdStrike getting to a billion. You talked about MongoDB moving their sales motion substantially to Marketplace. How important is the Marketplace to AWS’s business, and maybe even moreover, how important is it to your partners? Are you seeing meaningful shifts of their revenue to Marketplace-led adoption, as opposed to like you said, more traditional selling motions?

Matt Yanchyshyn: Yeah, because I think that reflects the reality of the market. Any complex application for customers these days typically requires a mix of what I would call first party, like AWS Services, and third party, partner solutions. And you put those together to solve a business case for customers, and the best solutions out there are almost always a mix. And so it totally makes sense that we all rise together. AWS benefits from making partners first class citizens as a key part of their portfolio. Marketplace is the way that we do that. And so I think that sounded a bit like a sales pitch, so let me give it to you in real terms. A lot of people don’t know this, but Marketplace is actually integrated in 15 AWS Service consoles today. If you look at EKS or Kubernetes console, there’s third party add-ons. And just recently, we actually tweaked it, so now you can discover and buy partner solutions in EKS without ever leaving the EKS console.

Patrick Moorhead: Interesting. I did not know that, so thank you.

Matt Yanchyshyn: Yeah. It is a big deal, because if you’re a Kubernetes cluster administrator or developer, and you’re in the EKS console, guess what, news flash, you probably have a higher propensity to buy container solutions. The container partner wins there, because they get a highly intentioned buyer. The customer wins, because they get that partner solution that completes their application. And EKS wins, because it makes their offering even… I think we’re realizing this “we all win together” kind of strategy, and by integrating partners into the AWS experience and meeting customers where they are is really working out, and we’re seeing that in the form of higher conversion rates and just success.

Patrick Moorhead: Through re:invent, this is all about innovation, and I like to put an exclamation point. It’s not about innovating for innovation’s sake. It’s innovation to help your customers, your clients, your partners, and everybody in between. As we look to the future, what is, from an innovation point of view, what’s exciting for you in the near future for Marketplace and your customers?

Matt Yanchyshyn: Yeah. Well, I’ll give you two. Is that okay?

Patrick Moorhead: Absolutely. Yeah. It’s-

Matt Yanchyshyn: So-

Patrick Moorhead: We’re a flexible show here.

Matt Yanchyshyn: All right. All right, so-

Patrick Moorhead: I’m not going to-

Matt Yanchyshyn: Yeah. The first is what you were saying before. I am pleasantly surprised by the joint success we’re seeing with the IBMs and the Salesforces and the N4s and the BMWare of the world. And I think I want to continue to be the AWS Marketplace for all partner types and not limited to software.I think we’re just getting started with SIs and professional services. We have a strong data business, obviously, machine learning business. And I don’t want to be just the software marketplace. I want it to be the AWS Marketplace for everything customers need to be successful in the cloud. And I think we still have a long runway there. That’s a big part of our future.The other big part of our future, and I sort of alluded to this, is meeting customers where they are more. I said we’re integrated in 15 AWS service consoles in varying degrees today. That’s just the beginning. I have something I like to call Marketplace Everywhere, and that’s just the way I describe a strategy for, where are customers? Where are the buyers? What’s the best place to meet them so they can find what they need and deploy it quickly and easily? And so far as we can use our Marketplace APIs and widgets, et cetera, to put Marketplace there, that’s where I need to be. And in that area, too, we’re only just getting started.

Daniel Newman: If-

Patrick Moorhead: Marketplace Everywhere. Love that.

Daniel Newman: It’s spoken here on the Six Five, but-

Patrick Moorhead: Exactly.

Daniel Newman: … it’s really interesting. You only said generative AI once, by the way, this whole conversation, but I have to imagine there’s also an era of Marketplace where there’s going to be the implementation of your own technologies, building on bedrock and doing more application matching and helping companies basically optimize everything from workload placement, data fabric, and of course, apps that they can use to run their businesses better. I just see, there’s a lot of potential to unlock here in a marketplace, because right now, it’s still, like you said, it’s discovery. But how are you matching companies of a similar ilk, genericizing data sets and helping companies that are AWS users in different regions, geographies, find the best applications that have helped other companies that are similar? You know what I mean? It feels like there’s a lot of opportunity to take your technology, put it to use, and actually make the marketplace even more friendly and usable. Now, again, I’m building product here. It’s easy for me to say, but I have to imagine there’s a place for that, where taking data use case, customer satisfaction, experiences, and then putting the right apps in front of people.

Matt Yanchyshyn: Yeah. You’re right. Generative AI and just machine learning and … statistical analysis in general, making the right recommendations to customers in the right time is something we’ve already started to do, like if you look at search, for example, in the AWS console. If you start typing in search, you get a mix of third party Marketplace solutions and AWS solutions. It’s only natural that in the future, excuse me, we look to a future where we more prescriptively recommend partners in the right context. That’s part of Marketplace everywhere. It’s part of meeting the customer where they are. Hey, what are you trying to do, customer? And how can I help you with a mix of AWS Services and partner solutions? And that’s certainly the direction we’re going. And I’d be remiss not to say this, too, but if you look on the Marketplace today, we actually have, I think, 89 generative AI listings that are directly tied into SageMaker JumpStart. We’re also making it easier for customers to find generative AI solutions themselves and then deploy them and launch them right into SageMaker. And that’s part of that integration story, too.

Daniel Newman: Yeah. It’s powerful. Matt, I am excited to continue to track the progress that you make. As analysts, it’s our job to sort of look and put the pieces together and help the market synthesize and understand, but what you’re doing is nothing if not compelling, so-

Matt Yanchyshyn: Appreciate it.

Daniel Newman: … congratulations on that. Look forward to continuing to watch it evolve. And at some point, I just want to walk into the console. I just want to tell it, “Hey, I need a cloud. I need this app. I need these instances.” And just, poof. And it’s a dream, but it’s my dream. Matt, thanks so much for joining us here on The Six Five. Let’s have you back again soon. Let’s-

Matt Yanchyshyn: That sounds great. Appreciate you having me. Thank you.

Patrick Moorhead: Thanks.

Daniel Newman: Absolutely. All right, everybody. Hit subscribe. Join us for all The Six Five shows here. We are on the road at AWS re:Invent 2023 in Las Vegas. For this show, though, for Patrick Moorhead, for myself, it’s time to say goodbye, but we’ll see you all really soon.

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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.