No Borders in the Cloud Ecosystem

CloudBlue’s Mike Jennett offers insights on how there are no borders in the broader cloud ecosystem. This article originally appeared on Solutions Review’s Insight Jam, an enterprise IT community enabling the human conversation on AI.

In a more connected world, cloud marketplaces are powerful gateways for organizations looking to expand into new international markets. They enable businesses to transcend geographical constraints, scale faster, and transact in various languages and currencies. A Canalys report predicts that hyperscaler cloud marketplaces are gaining significant traction, with sales expected to hit $85 billion by 2028. The report also forecasts that in a few years over half of marketplace sales will be conducted through the channel.

This promise of borderless growth comes with its own set of complexities, requiring strategic planning, a thorough understanding of global operational nuances and localized follow through. One size does not fit all.

Entering a new market isn’t as simple as listing a product on a cloud storefront. Each region has unique requirements, from tax laws and data governance to cultural nuances and buyer behavior.

Top 3 Challenges to Consider

Currency Preferences: Not all countries transact in U.S. dollars or euros. Local currency options build trust and enhance user experience. Research whether your payment system can handle multiple currencies or regional nuances like dual pricing.

Tax Laws: Compliance with tax regulations is non-negotiable. Determine if your transactions require adherence to local, regional, or international tax laws. For example, selling products in the European Union requires compliance with value-added tax (VAT) regulations, while in Brazil, distinct state and federal tax frameworks may apply.

Data Governance: Compliance with data protection laws like the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA) is essential. This includes understanding where data must be stored, how it is encrypted and ensuring secure handling with tools like web application firewalls. Deploy robust encryption protocols and multifactor authentication to protect sensitive data.

Utilizing a “Local Fixer”  

Cloud marketplaces often require partnerships with local distributors, service providers or resellers who understand the regional dynamics. Building these relationships can streamline your entry into new markets.

Organizations should develop a checklist for launching in new regions, covering distributor agreements, legal compliance and platform readiness:

Distributor networks: Evaluate whether you need a local distributor or an existing partnership with a global player like Arrow, Ingram Micro, or Tech Data that operates in the region.

Commitment expectations: Cultural differences influence partnership agreements. While some regions favor long-term contracts with volume-based incentives, others may prefer shorter commitments or a one-time purchase model.

Product availability: Confirm that your product can be legally sold and supported in the new market. In some cases, it may require adjustments to meet local standards or regulations.

Create pre-built templates: Streamline your entry into new markets by developing a repository of templates that address common operational challenges. Outline country-specific tax laws, data storage requirements, and seller-of-record details.

Localized Systems: Preconfigure software to handle local currencies, payment systems and regional accounting software.

The Flexibility of a Unified Platform  

It is important to ensure your platform supports multiple user bases with varying subscription models, payment preferences, and tax requirements. For instance, Infinigate Cloud, a division of Infinigate Group specializing in cybersecurity, sought to streamline its vendor onboarding process to expand its marketplace efficiently. Traditional methods were slow, resource-intensive, and complex due to regulatory and technical challenges.

By leveraging a unified platform, Infinigate Cloud created a flexible marketplace ecosystem, enabling seamless vendor integration, unified billing, and regulatory compliance. This solution significantly reduced onboarding time and costs, allowing Infinigate Cloud to scale rapidly, successfully expanding into 10 new European markets within a year.

Organizations can leverage several benefits from a unified platform, including:

Hyperscaler integrations: Cloud marketplaces offered by hyperscalers are rapidly emerging as an essential channel for software and SaaS companies to connect with their customers.

Payment Gateways: Different countries have different payment processing standards. Integration with regional tax-compliance software can simplify operations.

CRM Customization: Optimize your customer relationship management system to support multi-language communication, localized marketing materials, and culturally relevant customer engagement.

Avoiding Culture Clash 

Understanding cultural differences is crucial for building trust and fostering long-term relationships in new markets. For instance, in parts of Asia and the Middle East, informal discussions over tea or coffee often precede formal negotiations, emphasizing the importance of personal rapport before diving into transactions. While this approach may seem at odds with the streamlined, automated nature of cloud marketplaces, it is essential to incorporate such cultural nuances into your strategy.

Tailoring your sales approach to align with regional buying patterns is also essential. For example, while U.S. buyers may prioritize return on investment (ROI) and scalability, other markets might value immediate affordability or prefer bundled solutions. Adapting to these preferences can significantly enhance your ability to connect with and serve diverse customer bases effectively.

Localizing the Customer Experience 

Marketing materials and customer-facing content must resonate culturally and linguistically to foster trust and engagement. Regional marketing teams can adapt promotional campaigns to align with local cultural norms and expectations. For example, while direct sales pitches may work well in some markets, other cultures may perceive them as intrusive. In such cases, adopting a relationship-focused approach can lead to better outcomes.

Providing multi-language documentation is also important. Translating technical documentation, user guides and FAQs into the local language not only builds credibility but also reduces friction by ensuring customers can easily access and understand product information. Support teams should also be equipped to address region-specific issues and communicate effectively with customers.

The Balancing Act 

Cloud marketplaces open doors for organizations to tap into new international markets and industries, but having a solid strategy is key. Partnering with a provider of a mature, unified platform alleviates the heavy lifting and allows organizations to focus on their core business.

The path to thriving in international cloud marketplaces lies in blending agility with precision, leveraging global opportunities while respecting regional nuances. Organizations that can master this balance will position themselves not just as participants in these ecosystems but as leaders in the evolving global digital commerce landscape.