Procurement Efficiency with the Microsoft Commercial Marketplacev1.0

1. Executive Summary

The rapidly growing adoption of public clouds by IT organizations is frequently motivated by a desire to be more adaptable, agile, and even free of the technical debt that restricts the options for solution providers. Businesses increasingly turn to SaaS solutions, public cloud hosting, and quick deployment technology across all markets and industries for cloud solutions. Ultimately, businesses use the public cloud to use scalable infrastructure, reduce application development costs, and provide greater flexibility and speed when deploying their solutions.

Many organizations find that one aspect of this digital transformation—procurement—has not changed. It often still takes several pre-sales meetings, days or even weeks of waiting for estimates and quotes, potential negotiations, and finally, a review of agreements and additional approvals before moving from the selection of a product or solution to the integration and usage phase. This makes it more important for organizations to have visibility into the status of their procurement process and manage their cloud spend across all vendors to control costs and avoid surprises down the line.

Through cloud marketplaces, companies are aiming to change the procurement experience. The Microsoft commercial marketplace helps connect customers to thousands of solutions—many that are pre-configured to run on the Microsoft Azure cloud platform. It offers a wide range of products from leading software vendors, open source projects, and Microsoft products. Customers can find, try, purchase, deploy, and manage thousands of applications and services from a single catalog. The applications and services can be found by browsing or searching for them, and they can filter results by attributes such as software category or application type.

In this benchmark, we set out to test the value of the marketplace.

We used the marketplace to buy and deploy three well-known products and contrasted that experience with buying each service separately. We selected a public cloud cost-saving solution provided as a service, an event streaming platform, and an application delivery solution frequently used for its load balancing and web firewall capabilities.

Thousands of carefully chosen apps and services are arranged by category, workload, and industry in the marketplace, where you can find and assess them. Additionally, some apps offer free, time-limited trials so you can see if they’re right for you. Consolidating your marketplace transactions onto a single invoice through the Azure portal can help you save time and money. You can control spending across your company by using defined user roles and permissions.

2. Competitive Approaches and Platforms

We recommend the enterprise procurement process starts by ranking the requirements according to the software’s intended end users. Every feature included should be considered, including functionality, platform support, and commercial aspects such as price and contract terms. Start with a shortlist of potential suppliers and invite them to test their software against your checklist. Negotiate with each vendor in parallel, focusing on the initial license cost and the yearly maintenance fee. There should be a go-to method of procurement.

The marketplace is a channel that offers applications and services either built on or designed to integrate with the Microsoft Azure public cloud. The products and services sold through the Azure portal come from either Microsoft directly or its partners. Before solutions and services are listed and available for purchase, they are certified through the Microsoft Azure Certified program to ensure compatibility with the Azure public cloud and to ensure code quality and compliance with privacy considerations.

Access to a variety of solutions that are built on Microsoft cloud services or integrated with them is made possible by the marketplace. These options range from stand-alone, multitenant software programs with Microsoft 365 to specialized goods and services that support particular corporate goals.

3. Tests and Results

This benchmark compares how “traditional” procurement techniques and buying direct from software vendors stack up against Microsoft. Three factors were considered when evaluating each solution:

• Time to value
• Ease of procurement
• Billing transparency

We start by thinking about the advantage of time to value. Does purchasing every solution through the marketplace save time (either in terms of overall resources or skilled resources) between the moment a solution is determined and when it is deployed and available for use?

Second, we look at the effort and difficulty involved in acquiring a solution. We considered the length of the quote request process and the number of third parties involved in procurement.

Third, billing complexity and visibility were considered. The procurement process does not end with the initial purchase of a solution, and the cost of solutions hosted in the public cloud can vary widely. IT organizations using the public cloud must have a thorough understanding of the costs of the components and services.

To provide a clear explanation of the findings of our comparative testing, we developed a rubric that assigns a numerical score (from one to five according to time required, difficulty, and skills) to each grading category procurement method. The outcomes are reported for each of the three procured and deployed systems. A higher score indicates a greater advantage in the designated category.

Application Delivery Platform

Our first experience in this benchmark was the procurement of an application delivery solution. This product is typically deployed as an appliance in a perimeter network that protects and adds an extra layer of security to an organization’s internal local-area network from untrusted traffic and assists internally with load balancing and reverse proxying. We planned to deploy a pair of appliances in Azure using both procurement methods.

Vendor Direct
We began by creating an account with the vendor and submitted a request for a sales call. This call was scheduled several days out due to the limited availability of the technical team that would review our use case and help us determine which product was best for us. This conversation may have been more of a confirmation of previously held knowledge for some organizations with experienced network resources than a discovery of new functionality. During the call, we identified which licenses and support model would be needed and were informed that a reseller would reach out to us shortly with a quote.

The reseller responded the same day but told us the quote was still in progress. We received the quote a week later, approximately 14 days after initial contact with the vendor. Due to limited time available for this exercise, we did not complete procurement and deployment using this method, but typical steps would include internal approvals, submission for a PO, invoicing, service agreements, and security reviews prior to beginning the installation of the solution. In many organizations, this process can take several weeks.

Without the license, we could still evaluate the deployment process as free trials and virtual appliances were available from the vendor. This was, naturally, a longer process than a deployment wizard within Azure, as the appliance required importing and network resources needed to be created. As a result, we scored the Time to Value at two points. The 14 days to receive a quote was the main reason for grading Procurement Complexity at the lower end. Having billing for licensing maintained separately from the resources deployed in Azure also resulted in a 2 grade.

Azure
By contrast, we found the same application delivery solution in Azure, with various purchase options. We selected a pay-as-you-go option that offered the same licensed functionality we had received from our sales call. To procure and deploy the solution via the marketplace, we only needed to provide an Azure subscription for billing, select a few options in the deployment wizard, and then wait a few minutes for the appliances to be deployed. This activity took only a few minutes, and afterward, we had an appliance pair connected to our desired network and ready to be accessed and configured. To obtain support for this product, we could call in and identify our organization. They were also able to configure web support access for us when we provided our Azure account information.

For this test, we found a very significant advantage for Azure Marketplace (as shown in Table 1). We were able to deploy a solution in minutes, have licensing and support billed directly to our Azure subscription, and avoid waiting for quotes and working with a reseller.

Table 1. Application Delivery Platform Scores

Event Streaming Platform

The next solution selected was a popular event streaming platform, which enables the collection, storage, and analysis of data in real-time, enabling organizations to gain insights and make decisions quickly.

Vendor Direct
A few days after our initial contact using a web form, a sales team called us. Unfortunately, our modest size and desire for a short-term (one year or less) deal made it difficult for the sales staff to gain approval to move ahead. Although we received a ballpark estimate, we could not finish the procurement process by working directly with this vendor. As a demonstration, we installed the product under a trial license, but we were unable to secure the paid assistance required to complete a production-ready deployment. Larger businesses may receive more attention than we did, but they will still face many of the same obstacles we experienced— delays, vendor sales approval, and complications over paid assistance. Credit card was the only option, which is a blocker on deployment for most organizations.

Azure
With Azure, a production-ready deployment was configured and deployed with relatively little effort. Following a step-by-step deployment wizard, we selected our desired sizing and feature configurations. After a few minutes, in our selected resource group, we found several security groups, virtual machines, and network adapters, all with software configured and ready to use. This deployment even included Ansible infrastructure, an open-source automation platform used for configuration management, application deployment, and task automation. It is designed to help manage complex IT environments by automating routine tasks and simplifying complex processes.

For time to value, we graded Microsoft a 4 compared to a 1 for Vendor Direct due to the complexity of the solution, which was greatly simplified by the deployment wizard in the marketplace. Licensing for this deployment could be requested from within the application (a free trial is included by default) but would still require meeting and negotiating with a sales team. We gave Microsoft a slight advantage for procurement and billing, with a score of 2 compared to 1 for Vendor Direct, as the already-deployed solution infrastructure offered the benefit of having the components needing licensing already deployed, which provided an aiding description of what licensing would be required. The clear advantage here was the ability to deploy a complex solution in minutes from the marketplace. Table 2 shows the scoring.

Table 2. Event Streaming Platform Scores

Public Cloud SaaS

Finally, we tested the procurement of a popular SaaS solution that is designed to help optimize resources utilized in various public cloud providers. This solution required a direct integration with our Azure cloud subscription, a factor to consider for organizations pursuing cloud strategies. We believe it to be a logical step to seek unification for billing of solutions that work directly with the same public cloud provider. This solution also offered the most straightforward access through both methodologies.

Vendor Direct
By signing up for an account directly on the vendor’s website, we could input payment information directly into the account portal. Support tickets were easily handled via their messaging system, and response times were within 24 to 48 hours. As a result, we graded both methods a 5 for Time to Value and Procurement Complexity. Connecting the solution to an existing public cloud environment was a lengthy but well-documented process. As this was a SaaS solution, the interface for performing this work was published by the vendor and accessible outside of Azure. This remained true when procured through the marketplace, as noted below.

Azure
When we visited the marketplace page for this particular solution, clicking the “Get It Now” link took us to an Azure wizard. Here, we selected the subscription and resource group to which we wanted to link the SaaS application in Azure. After deployment, we needed to visit the vendor’s portal to log in and set up the solution. However, as we used the application over time, we could see charges detailed in the billing section of Azure. This factor gave Azure an advantage as a procurement method, with a score of 5 for Billing Transparency compared to a 3 for Vendor Direct. This was a perfect experience, as shown in the scores in Table 3.

Table 3. Public Cloud SaaS Scores

Overall Scores

Our application delivery solution was not a significantly complex deployment with either method of procurement but clicking through a wizard in a web console is faster and simpler than choosing firmware and/or virtual appliances to download from a vendor and then import into Azure. Our proposed use case for the solution was an industry standard, but we still waited two weeks from contact to receiving a quote, not even reaching a point of successful fulfillment. When we deployed via the Azure Marketplace, we were licensed and operational with unified billing to our existing subscription in minutes.

For our event streaming platform, we saw a large benefit in engineering deployment for the required infrastructure. This solution was complex, and even the most minimally viable architecture required several components to be deployed, configured, and integrated. The Microsoft commercial marketplace offered a quick deployment through an easy step-by-step configuration wizard. The end result had all the components and required resources created, running, and configured on Azure, ready for us to use.

Even with a SaaS solution that accepted credit card information through a simple billing interface, we still saw additional benefits with billing through the Marketplace. First, using a credit card to pay for services is not desirable for all organizations. In this situation, the extra effort to obtain an alternative billing arrangement with the vendor was immediately evident. Second, this particular product was billed based on usage. That is, the pricing was performance-based and calculated from the savings generated by using the product. Having the billing information within Azure means authorized users can directly see the cost calculation for each billing cycle. Finally, unifying the billing within Azure for a product that integrates with Azure is a logical step toward cloud strategy adoption.

Table 4 shows the aggregate scoring across our three scenarios.

Table 4. Overall Scores

4. Analyst’s Take

The contrast between procuring solutions through the Microsoft commercial marketplace and direct to vendor was apparent in multiple areas. Unified billing is undoubtedly a significant advantage that can be quickly identified. IT organizations in Azure looking at public cloud, or planning to grow and test drive multiple solutions, will find a well-defined and consolidated billing solution highly beneficial. The time spent waiting for sales teams to organize calls, often unnecessary demonstrations, and being handed off to resellers carries a heavy cost with great impact on agile efforts within IT organizations.

Through our testing, we learned that organizations of all sizes can benefit from the Microsoft commercial marketplace. IT organizations can leverage the marketplace to quickly deploy and integrate solutions, often without needing to work through a supply chain team, reseller, or sales team to procure the desired products and services. To achieve an agile-driven engineering standard, organizations deploying solutions in Azure need a process that allows proof of concept deployments, fast integration efforts, and a clear correlation of resource consumption to cost. The marketplace provides this benefit with streamlined ease and adds to the attraction of leveraging Azure to support rapid deployments of all types.

In our test, the marketplace performed far better than purchasing directly from the provider. It is significantly better in terms of Time to Value and Billing Transparency. The product plays a significant role in the appraisal. Some products are simply more difficult to obtain, reflected in lower Azure Marketplace and Vendor Direct scores, while Azure Marketplace performed better for each product acquisition.

Also, eligible marketplace solution purchases count toward any Microsoft Azure Consumption Commitment (MACC). For example, if a solution is MACC-eligible, and if the customer has a $1M Azure consumption commitment with Azure when the customer buys that solution, it will count towards their MACC, which gives them discounts on their Azure infrastructure.

With the marketplace, you can find and evaluate thousands of selected apps and services organized by category, workload, and industry. In addition, select apps provide free, limited-time trials to determine if they’re appropriate for you. You can save time and money by consolidating your Azure Marketplace transactions onto a single invoice. Utilizing established user roles and permissions, you can manage expenditures across your firm.

5. Disclaimer

GigaOm runs all of its assessments and tests to strict ethical standards. The results of the report are the objective results of the application of a scoring methodology using the same rubric across all the competitive platforms

This is a sponsored report. Microsoft chose the competitors. GigaOm developed the methodology and scoring. While we made every effort to remove subjectivity from our assessment, certain criteria are inherently subject to judgment. We have attempted to describe our decisions in this paper.

6. About William McKnight

William McKnight is a former Fortune 50 technology executive and database engineer. An Ernst & Young Entrepreneur of the Year finalist and frequent best practices judge, he helps enterprise clients with action plans, architectures, strategies, and technology tools to manage information.

Currently, William is an analyst for GigaOm Research who takes corporate information and turns it into a bottom-line-enhancing asset. He has worked with Dong Energy, France Telecom, Pfizer, Samba Bank, ScotiaBank, Teva Pharmaceuticals, and Verizon, among many others. William focuses on delivering business value and solving business problems utilizing proven approaches in information management.

7. About GigaOm

GigaOm provides technical, operational, and business advice for IT’s strategic digital enterprise and business initiatives. Enterprise business leaders, CIOs, and technology organizations partner with GigaOm for practical, actionable, strategic, and visionary advice for modernizing and transforming their business. GigaOm’s advice empowers enterprises to successfully compete in an increasingly complicated business atmosphere that requires a solid understanding of constantly changing customer demands.

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GigaOm’s perspective is that of the unbiased enterprise practitioner. Through this perspective, GigaOm connects with engaged and loyal subscribers on a deep and meaningful level.

8. Copyright

© Knowingly, Inc. 2023 "Procurement Efficiency with the Microsoft Commercial Marketplace" is a trademark of Knowingly, Inc. For permission to reproduce this report, please contact sales@gigaom.com.