MongoDB delivers strong Q3 revenue growth

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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MongoDB saw revenue growth accelerate in its fiscal third quarter as its MongoDB Atlas platform saw revenue growth of 26%.

The company reported a third quarter net loss of $9.8 million, or 13 cents a share, on revenue of $529.4 million, up 22% from a year ago. Non-GAAP earnings in the quarter were $1.16 a share.

Wall Street was expecting MongoDB to report non-GAAP earnings of 69 cents a share on revenue of $495.72 million.

• MongoDB 8.0 generally available, along with Atlas updates
• MongoDB rebounds in Q2 with better-than-expected results
• MongoDB adds to Atlas platform, scales partnerships, flexibility
• MongoDB Atlas expands Google Cloud Vertex AI integration, eyes vertical use cases

CEO Dev Ittycheria said the company saw “success winning new business due to the superiority of MongoDB's developer data platform in addressing a wide variety of mission-critical use cases.”

The company said Michael Gordon, MongoDB’s operating chief and CFO will step down at the end of the fiscal year. MongoDB said it has started a search for a new CFO and Serge Tanjga, MongoDB's Senior Vice President of Finance, will serve as interim CFO starting Feb. 1 if a successor hasn’t been named by then.

As for the outlook, MongoDB said revenue will bet between $515 million and $519 million with non-GAAP earnings of 62 cents a share to 65 cents a share. For fiscal 2025, MongoDB projected revenue of $1.973 billion to $1.977 billion with non-GAAP earnings of $3.01 a share to $3.03 a share.

Constellation Research analyst Holger Mueller said:

"MongoDB had a good quarter, fueled by its cloud based MongoDB version Atlas. But the hard work happened on the cost side, where MongoDB still invested and grew budgets, but managed to grow at 70% of revenue growth. When vendors pull this off good things happen, and for MongoDB it is the first quarter since it early days to have a loss of under $10 million. MongoDB certainly feels the pressure to deliver a quarter in the black, and for now all is set for MongoDB to deliver even a small profit in Q4. Time will tell."

C3 AI posts strong Q2, credits Azure, Google Cloud partners

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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C3 AI reported better-than-expected second quarter results with revenue growth of 29%. CEO Tom Siebel said the company is seeing traction with its Microsoft Azure partnership.

The company reported a second quarter loss of 52 cents a share on revenue of $94.3 million. Non-GAAP loss was 6 cents a share.

Wall Street was expecting C3 AI to report a non-GAAP loss of 16 cents a share on revenue of $91.02 million.

In a statement, Siebel said:

“By establishing C3 AI as a preferred AI application provider on Azure and creating a Microsoft-scale go-to-market engine, we’re making it easy for businesses to adopt and deploy C3 AI applications. This is an inflection point for Enterprise AI, driving growth.”

The Microsoft deal was signed Sept. 30 in a partnership that puts C3 AI Enterprise and C3 Generative AI on Azure Price List and Azure Marketplace. Azure can also sell C3 AI applications with bonuses and design wins attached.

C3 AI said it also closed more than 20 agreements with Google Cloud. C3 AI added that it closed 58 agreements including 36 pilots in the quarter.

As for the outlook, C3 AI projected third quarter revenue of $95.5 million to $100.5 million with a non-GAAP loss between $38.6 million and $46.6 million. For fiscal 2025, C3 projected revenue of $378 million to $398 million wit a non-GAAP operating loss of $105 million to $135 million.

• C3 AI Q1 solid, outlook slightly light
• C3 AI highlights C3 AI Vision, roadmap ahead
• Enterprise generative AI use cases, applications about to surge
• Constellation ShortList™ Artificial Intelligence and Machine Learning Best-of-Breed Platforms

Holger Mueller, an analyst at Constellation Research, said:

"C3 had a good quarter growing revenue by almost 20% on the product side. But growth came at a cost as it spend almost $10 million more in sales and marketing, so the revenue came with a cost. Coupled with its high cost of subscription, it is hard for C3 to move forward to generate a profit. C3 remains an enigma that does the right things in product, lands blue chip customers, has systems integrator partnerships yet struggles to grow profit and toward the significant $1 billion revenue mark with the speed." 

Oracle Q2 strong, but falls short of expectations

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Oracle’s second quarter was strong, but light relative to expectations. Oracle’s cloud revenue was up 24% in the second quarter from a year ago with cloud infrastructure revenue up 52%.

The company reported second quarter earnings of $1.10 a share on revenue of $14.1 billion, up 9% from a year ago. Non-GAAP earnings were $1.47 a share.

Wall Street was expecting Oracle to report second quarter earnings of $1.48 a share on revenue of $14.12 billion, up 9% from a year ago.

• Oracle Database@AWS hits limited preview
• Oracle databases everywhere with AWS partnership, strong Q1 results
• Oracle CTO Ellison talks about AWS partnership with Garman, the need for autonomous security
• Oracle's cloud, AI plans are a master class in co-opetition

Safra Catz, Oracle CEO, said that Oracle Cloud Infrastructure saw “record level AI demand.” She added:

“Growth in the AI segment of our Infrastructure business was extraordinary—GPU consumption was up 336% in the quarter—and we delivered the world's largest and fastest AI SuperComputer scaling up to 65,000 NVIDIA H200 GPUs.”

Catz said that Oracle Cloud revenue should top $25 billion this fiscal year.

CTO Larry Ellison said Oracle will collaborate with Meta and its Llama models to develop AI agents. “Oracle trained AI models and AI Agents will improve the rate of scientific discovery, economic development and corporate growth throughout the world,” said Ellison.
As for the outlook, Catz said revenue for the third quarter is expected to grow 9% to 11% with total cloud revenue growing at a 25% to 27% clip. Non-GAAP earnings will between $1.41 to $1.47 a share. Third quarter earnings will be impacted by a 5 cents a share loss due to an investment loss in another company. 

Constellation Research analyst Holger Mueller said:

"Oracle delivered a good quarter with cloud apps in the 20s and cloud infrastructure at more than 50% growth. And Oracle keeps doubling down on investment, it is the first quarter that Oracle is investing a double digit billion amount in CAPEX, with $10.75B. Year over year that is an increase of 50% over Q2 in the last fiscal year, it marks also the first time Oracle invests over 50% of free cash flow 20.29B into CAPEX. Larry Ellison and Safra Catz seen an opportunity an invest into it – no question. And Oracle’s ambitious goal of overtaking and then leading market leader AWS in terms of datacenters is continuing. Oracle grew in all of it regions, with the Americas being the strongest with almost 10%, and APAC the weakest."

Here's what Catz said on the conference call:

• "Our strategic SaaS applications continue to grow rapidly, and we are also seeing more of our industry based cloud applications come online which immediately contribute to revenue growth."
• Cloud database services now have an annualized revenue of $2.2 billion.
• "We are currently live in 17 cloud regions with Database@Cloud services, and have another 35 planned with Azure, Google and AWS."

Ellison said:

"We have one suite of automation tools that works in all 100 of our current regions, and it makes it possible, because of the high degree of automation, to run not dozens of regions, but hundreds, or even theoretically, 1,000s of regions. Individual customers are dedicating their own region. Individual customers are buying complete Oracle regions, and installing them, if you what seems like it would be on premise, though it is a full Oracle Cloud region just happens to be a dedicated data center to that customer."

Catz added that scaling approach enables Oracle to drive profits over time. 

"We don't have to spend a long time with a with empty centers, because we literally are small and just fill them up as our customers are consuming," said Catz. 

Google outlines performance of Willow quantum chip, highlights roadmap

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Google launched its latest quantum chip called Willow with strong error correction improvements and outlined its roadmap for quantum computing.

In a blog post, Google outlined Willow, which can reduce errors as it scales up using more qubits. Google called the advance a breakthrough that will make quantum systems more reliable.

According to Google, Willow performed a standard benchmark computation in under 5 minutes and outpaces today's fastest supercomputers by "10 septillion years." Google rated Willow on the random circuit sampling (RCS) benchmark.

Willow is part of Google's 10-year effort to build out its quantum AI operations. The company said Willow moves it along the path to commercially relevant applications.

Google's news is just part of a flurry of announcements that have landed in recent days.

• IonQ outlined a rewrite of its original quantum operating system with IonQ Quantum OS and a set of hybrid services.
• AWS announced its Quantum Embark Program, an advisory service to help customers get ready for quantum computing without long-term commitments.
• AWS also said it is better integrating its Braket quantum computing platform with Nvidia's CUDA-Q platform. The effort between AWS and Nvidia is aimed at hybrid systems that include classical high-performance computing and quantum computing.

Google said its approach is to focus on the quantity of qubits while scaling.

• Quantum Computing Platforms
• Quantum Computing Software Platforms
• Quantum Full Stack Players

"We’re focusing on quality, not just quantity — because just producing larger numbers of qubits doesn’t help if they’re not high enough quality. With 105 qubits, Willow now has best-in-class performance across the two system benchmarks discussed above: quantum error correction and random circuit sampling. Such algorithmic benchmarks are the best way to measure overall chip performance."

\

• Quantum computing all in on hybrid HPC with classical computing
• Classiq CEO Minerbi on the intersection of quantum computing, HPC and use cases
•  IonQ’s bet on commercial quantum computing working, acquires Quibitekk | IonQ's quantum computing bets: Quantum for LLM training, chemistry and enterprise use cases
• IBM upgrades IBM Quantum Data Center with Heron
• IBM Boosts the Software Side of Quantum
• Quantinuum, Microsoft claim quantum reliability breakthrough
• Microsoft claims hybrid quantum breakthrough with Quantinuum, partners with Atom Computing
• Quantinuum raises $300 million, valued at $5 billion
• Quantum Brilliance, Oak Ridge National Laboratory aims to meld quantum computing, HP

 

Rivals up pressure on VMware for enterprise migrations

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Read more

The list of VMware rivals trying to poach workloads is swelling and recent days highlight how vendors are stepping up the pressure.

HPE CEO Antonio Neri said that customers are interested in its HPE VM Essentials product line as they look to manage virtualization across HPE, VMware and other players.

"Customers are also asking us to help them simplify their VMware private clouds and optimize their virtualization costs. At HPE Discover Barcelona 2 weeks ago, we launched HPE VM Essentials, which enables customers to manage their virtualization states across HPE VMware and many others," said Neri, speaking on the company’s fourth quarter earnings call.

Neri's comments landed a few days after Amazon Web Services' re:Invent 2024 conference kicked off. AWS launched Q Developer features that enable an enterprise to automate much of their VMWare migration.

With Amazon Q Developer, a customer can move away from VMware with more ease. Amazon Q Developer can automate and complete tasks including analysis, planning, code generation and testing. Amazon used Q Developer to convert old versions of Java to Java 17 and saved 4,500 years of development work.

The bet is that AWS can give customers the Q Developer tools to transform legacy infrastructure and migrate workloads to the cloud. Executives said customers who were dependent on VMware vSphere are looking at other options since Broadcom has changed its pricing strategy.

In addition, Red Hat this week also posted a walkthrough on migrating VMware vSphere customers Red Hat OpenShift Virtualization.

As previously reported, Nutanix has been among the biggest beneficiaries of the VMware turmoil. Nutanix recently reported a strong first quarter and fielded multiple questions about VMware.

• Nutanix lands larger deals in Q4, ups outlook, plays long game vs. VMware
• Broadcom CEO Hock Tan aims to woo VMware customers with private cloud, simplification pitch
• Nutanix product additions, partnerships designed to capitalize on VMware customer angst
• Nutanix winning deals vs. VMware, but Broadcom punching back with pricing

Nutanix CEO Rajiv Ramaswami said the company has ramped up a partnership with AWS to move workloads from VMware to its NC2 platform on AWS. He said:

"As part of this collaboration, customers will gain access to promotional credits from AWS to support customer migrations and proof of concept trials as well as Nutanix licensing promotions. Customers can also gain access to promotional credits for migrating VMware Cloud on AWS workloads to NC2 on AWS through the AWS VMware Migration Accelerator program."

Ramaswami added that the VMware installed base continues to look at options. He added that typically VMware migrations also revolve around hardware upgrade including Nutanix converged systems with Dell.

"It's a dynamic market in the sense that sometimes we'll see aggressive behavior from Broadcom as well to keep those customers, especially the very large ones," said Ramaswami.

Although VMware migrations were a big story in 2024, Ramaswami noted that the trend will go for years. He said enterprises that are tethered to vSphere and willing to replace hardware can swap quickly--perhaps within a month or two.

Public cloud migrations off of VMware are also relatively simple. "A lot of that is automated as well," said Ramaswami. "VMware Cloud on AWS is also easy to migrate onto a Nutanix offering."

The big accounts--like the enterprises VMware is trying to keep--have more complicated migrations.

Ramaswamy said:

"These large customers that use multiple VMware products with massive estates. And there it can be many years, it can be three years to do a migration just because they can't migrate all of it at once, there is a requirement for professional services engagement to convert over some of their more complex custom scripts that they have written and custom investments they've made on top of the VMware portfolio. So those migrations tend to be more complex, require professional services and take a few years.

Nutanix is also leveraging its channel partners to take VMware workloads. Given VMware has tried to go direct with its largest accounts, channel partners are coming to Nutanix. "We are not trying to work around them or shut them out of any of the deals. We've seen a significant increase in channel partner engagement with us over the last year or two," said Ramaswamy.

BT150 Spotlight: Centurion Health's Johnny Wu on delivering healthcare in prisons

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Read more

Centurion Health Chief Clinical Officer Johnny Wu is used to technology workarounds in healthcare since his company is focused on serving patients in prisons.

I caught up with Wu at Constellation Research Connected Enterprise to talk shop. Here are some of the takeaways from Wu, a BT150 member of the 2024-2025 class.

The role. Centurion Health provides healthcare inside of prisons and part of Wu's role is delivering care when it has to work around technology restrictions. "We provide care inside of prisons and it's challenging due to the limitations of prisons--concrete, rebar, lack of being able to bring in cell phones--but we are trying to provide care by going directly to patients," said Wu. "We have a captive audience, but sometimes we don't have access to them."

Technology workarounds. Wu said the company is starting to use tablets and use telehealth inside prisons. "I provide direct patient care and oversee that, but the IT department is constantly building datasets so we can provide better care in real time," he said.

There are no electronic health records that are standardized across states. Wu said:

"There's a lot of jurisdictions that we have to deal with. Each state has its own prison health system. There's also the federal system, and then the county jails, and they don't communicate. They have different budgets. You could be working in a system where they have very robust resources and electric health records. Some are actually still working on paper."

Multiple requirements and regulations. Wu said each contract in the prison system has different contract requirements and regulations. Centurion Health is a centralized group that attempts to standardize across the US, but often there's a consultation with the local level on how to make things work.

What Wu would fix? Wu said:

"We need to just move away from the mindset that we have to do things the way we've always been doing it, and then adding technology. We just need to start fresh. I would like to be able to have mobile technology, be able to have Wi-Fi or cellular service inside the prisons. I have folks who I can't even communicate with because there's no way for them to have a cell phone inside the prison while they're working."

Telehealth. In prisons, telehealth is typically a standalone machine sitting in front of a patient with a chaperone. On the other hand, the provider could be remote in another location. Wu said:

"However, the software that goes through the internet is very limited, very impersonal. We're moving towards to be able to have using peripherals where we've actually gotten permission to collect data. We can collect heart rates, sounds of their hearts, their lungs, and in real time the provider at the other end can hear this and adjust treatment plans."

Wearables. Wu said Centurion Health has been looking to use wearables, but "security trumps everything." He said:

"Wearables are made to be too small and for consumers. For our world, a wearable could be swallowed or hidden. It poses a challenge to have permission to use wearables. We have to rig and make our own type of wearables, which is not always ideal, but we do what we can. We're looking at using sonar to be able to collect some information, but we're working in the house of custody where we don't own the physical plant or office space. We can't make changes that easily."

How things have changed. "The client understands that there's an obligation to provide health care and you have to make sure each side is supporting each other. When I started my career in correctional medicine I was working in a broom closet or sometimes a jail cell. Today new prisons have medical people involved with the design," he said.

Rewarding part of job. "Patient care is rewarding," said Wu. "A lot of times it's as simple as going into a facility and talking to people. They remember me and it's just rewarding to know that people appreciate what we do," he said.

BT150 interviews:

• BT150 Spotlight: Insight Global's DeWayne Griffin on HR, AI and Humans in the Loop
• BT150 Spotlight: MultiCare Health System's Laurie Wheeler on optimization, change management and healthcare transformation
• BT150 Spotlight: Jewelers Mutual John Kreul on Human-Centric AI, CX, Returns and Future-Proofing
• BT150 member Dr. Jonathan Reichental: How autonomous vehicles could change how cities are designed
• Peraton's Cari Bohley: Why internal talent recruiting and retention is critical
• SuperNova Award interview with Joe Prota: How IBM used Adobe Firefly to speed up ideation and iteration
• BT150's Ashwin Rangan on CIO evolution, technology curves and what it means for genAI deployments
• BT150 Spotlight: Sunitha Ray on the difference between enterprise AI and genAI

HPE Q4 strong as server revenue surges due to AI

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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HPE reported better-than-expected fourth quarter results as server revenue surged due to AI demand. HPE also said that it expects its acquisition of Juniper Networks to close in early 2025.

The company said it has a backlog for AI systems orders to more than $3.5 billion.

HPE reported fourth quarter earnings of 99 cents a share on revenue of $8.5 billion, up 15% from a year ago. Non-GAAP revenue in the fourth quarter of 58 cents a share.

Wall Street was expecting HPE to report fourth quarter earnings of 56 cents a share on revenue of $8.26 billion.

HPE CEO Antonio Neri said the company's portfolio of hybrid cloud, AI and networking was paying off. HPE is also seeing strong traction in Greenlake adoption. 

• HPE acquires Morpheus Data to round out HPE GreenLake features
• HPE unveils Private Cloud AI, broad Nvidia partnership aimed at genAI workloads
• HPE to acquire Juniper Networks for $14B: What it means
• HPE launches AMD powered AI system and highlights broader strategy
• On-premises AI enterprise workloads? Infrastructure, budgets starting to align

Server revenue in the fourth quarter was $4.7 billion, up 32% from a year ago. Intelligent edge revenue, which includes Aruba gear, was $1.1 billion, down 20% from a year ago. Hybrid cloud revenue was $1.6 billion, up 18% from a year ago.

As for the first quarter outlook, HPE projected non-GAAP earnings of 47 cents a share to 52 cents a share. Revenue is projected to grow at a mid-teens percentage clip.

For the year ended Oct. 31, HPE reported earnings of $1.93 a share on revenue of $30.13 billion.

Constellation Research analyst Holger Mueller said:

"HPE had a very good quarter with servers leading the way fueled by the AI demands of enterprises. Had the networking segment not stalled, it could have been a record quarter for HPE. Costs grew as well, but overall results got bumped by gains on equity sales,  which doubles profits and EPS. The soon to be commencing addition of the Juniper business will give HPE another 4 quarters of favorable YOY comparisons, so things are looking up for HPE." 

Speaking on the earnings conference call, Neri said the following:

• "Our AI systems demand remains strong. We have received new orders bringing AI systems backlog to over $3.5 billion. Our traditional server business also continues to reflect the improved market dynamics. Hybrid cloud revenue grew 18% year-over-year and 21% sequentially, resulting in revenue of $1.6 billion, with increasing revenue for HPE Private Cloud and continued growth in HPE Storage."
• "Customer adoption of our HPE Alletra Storage MP solutions continues to rise at an accelerated pace. Since launch, we have sold approximately 3,000 systems."
• "We see the enterprise AI pipeline continue to grow steadily. There are hundreds of customers on that pipeline. There are some very interesting large-sized deals in the pipeline, and they are doing proof-of-concept. We announced the co-engineered solution with NVIDIA in June, and we made it available September 9. We had 7 weeks to be able to collect orders. We already collected orders in enterprise AI and we already closed deals in enterprise AI."
• "Customers are also asking us to help them simplify their VMware private clouds and optimize their virtualization costs. At HPE Discover Barcelona 2 weeks ago, we launched HPE VM Essentials, which enables customers to manage their virtualization states across HPE VMware and many others."

AWS Marketplace adds 'Buy with AWS' as it expands reach, woos procurement departments

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Read more

Amazon Web Services has added new features to AWS Marketplace that will resonate with enterprise procurement teams, grow the cloud provider's reach and bring Amazon's commerce knowhow to partner websites.

At re:Invent, AWS fleshed out its AWS Marketplace strategy with three launches:

• Support for granular purchase orders across all product and pricing types. This move enables spend tracking, expedited payment processing times, post purchase PO updates and pay-as-you-go pricing as well as flexible payment schedules.
• Multi-currency private offers and non-USD bank account support. This addition to AWS Marketplace eliminates currency fluctuations and risk for buyers and adds support for EUR, GBP, AUD and KRW at launch.
• Buy with AWS, which gives partner websites the ability to transact with AWS Marketplace listings. Think of Buy with AWS as AWS Marketplace to go. Buy with AWS is an effort to take AWS Marketplace everywhere and enable purchase on independent software vendor sites, power distributor cloud marketplaces and give channel partners the ability to host curated storefronts and resell AWS Marketplace listings.

AWS Marketplace momentum

AWS Marketplace has quietly built momentum in recent years and it's clear that the effort has gained in importance. For enterprise buyers, a more frictionless purchasing experience is critical because CxOs already limited time is gobbled up by contracts, legal teams and haggling. One of the big benefits of AWS Marketplace is that it standardizes contracts to a large degree and compresses contacting cycle time by as much as 50%.

At re:Invent 2023, AWS reduced listing fees for AWS Marketplace. Today, AWS Marketplace features more than 5,000 sellers from 39 different countries selling products across 70 categories. There are 2.5 million active subscriptions from AWS Marketplace.

A few more recent items:

• Salesforce, Databricks and CrowdStrike were among the large enterprise software players noting that they were closing big deals on AWS Marketplace.
• Marketplaces are part of an overall shift in enterprise software purchasing as vendors are shifting to new models and enterprises are looking to consolidate and simplify.
• Enterprises need to accelerate cloud and artificial intelligence adoption and see marketplaces as a way to integrate vendors and foster collaboration.

Speaking at Constellation Research's Connected Enterprise, Phil Potloff, GM of AWS Software Marketplace, said the company is focusing on the buyer experience. "Customers have moved more of their IT infrastructure to the cloud and that's where they're running third-party software," said Potlaff. "We look at upfront discovery. Buyers want to evaluate software without a sales pitch. We focus on time to value. We look at IT buyer and procurement friction. We're a way to control spend with standardized contracts."

Navigating a sprawling vendor landscape

While AWS Marketplace features software from IBM, Salesforce, ServiceNow, CrowdStrike and others, it has become a channel for startups. AWS cited Orca Security as a startup that has leveraged AWS Marketplace to drive 800% revenue growth. Another startup, Drata, derives 40% of its revenue from AWS Marketplace deals.

Chirag Mehta, Constellation Research analyst, said enterprise buyers have three types of marketplaces. The most high profile marketplaces are from hyperscale cloud providers. Business application marketplaces are also prominent. Data and AI marketplaces are also emerging for enterprises.

Each of those categories have established vendors and new entrants for enterprises to consider. "It's incredibly difficult to discover, try and buy so customers are looking to reduce friction, enable employees to use tools and have governance," said Mehta.

• Research: Building Vibrant Marketplace Ecosystems for the Future
• Big software deals closing on AWS Marketplace, rival efforts
• IBM, AWS expand partnership, watsonx headed to AWS Marketplace
• Enterprise software 2025: Three big shifts to watch

The plan for AWS Marketplace is to expand choices on its own platform and extend it into channel partners via Buy with AWS. Via Buy with AWS, customers can request demos, get custom pricing and procurement while using AWS accounts. That avenue can expand partners' ability to sell custom applications.

IBM has expanded the availability of its software portfolio on AWS Marketplace to 92 countries with its AI and data technologies serving as the headliners. IBM is offering its software directly on AWS Marketplace as well as via partners. More than half the deals closed on AWS Marketplace in 2024 were new clients for IBM.