Best Practices for Procurement Teams Utilizing AWS Marketplace

AWS Marketplace serves as a comprehensive digital catalog of third-party software, services, and data, streamlining the process of discovering, purchasing, deploying, and managing software solutions on Amazon Web Services (AWS). By leveraging AWS Marketplace, organizations can foster innovation through thousands of software listings while enhancing governance with improved approval workflows and visibility into expenditures.

When engaging with procurement teams about AWS Marketplace, a common inquiry is, “What strategies should we adopt to maximize our experience with AWS Marketplace?” Below are seven essential practices for procurement teams navigating purchases through AWS Marketplace. Whether you are initiating your AWS Marketplace journey or refining and expanding your usage, these guidelines will be beneficial.

1. Cross-functional Alignment

As organizations embrace AWS Marketplace, transactions often occur on a case-by-case basis, creating knowledge silos instead of standardized processes. This ad-hoc method can hinder scalability, leading to misalignments as usage grows.

It’s vital to establish organizational alignment regarding how AWS Marketplace integrates into procurement processes, incorporating input from diverse stakeholders like cloud, procurement, legal, and finance teams. Documenting the approved process ensures it can be consistently applied and communicated to all relevant parties, enhancing understanding of AWS Marketplace utilization throughout the organization.

2. Empower Procurement Teams

Often, a single technical stakeholder, usually the cloud administrator, takes on the responsibility of managing AWS Marketplace activities, such as accepting private offers. This reliance can create friction, delays, and potential breaches of procurement policies.

AWS encourages procurement teams to take charge of reviewing and accepting offers in AWS Marketplace, leveraging their expertise and insight into the broader procurement framework. This ensures that all necessary steps are addressed before offer acceptance, and procurement is involved in negotiations.

Utilizing AWS Identity and Access Management (IAM) roles can provide precise access control to AWS services, including AWS Marketplace. Teams may consider establishing roles for procurement purchasers, who can make purchases, and procurement viewers, who can monitor subscriptions without purchasing authority. AWS managed policies can be utilized for basic permissions or customized as needed.

Private marketplaces enable self-service procurement, allowing curation of third-party software lists. This empowers teams to manage who can purchase offerings and from which AWS accounts. It also offers efficient access to trial options and pay-as-you-go pricing for flexible evaluations and project-based activities. Additionally, organizations can opt for the Bring Your Own License (BYOL) model to leverage existing software licenses.

3. Proactive Planning

Involving various stakeholders, like category managers and business stakeholders, is crucial for successful AWS Marketplace transactions. Without adequate planning, AWS Marketplace can easily become an afterthought, resulting in inefficiencies.

Organizations should outline a pipeline of potential opportunities in AWS Marketplace, detailing timelines for upcoming software investments and renewals. This proactive approach ensures AWS Marketplace is prioritized and facilitates alignment among procurement stakeholders. Engaging with channel partners early in the process can also alleviate friction.

Introducing AWS Marketplace in discussions with software vendors allows time for those not currently listed to consider becoming part of it. Furthermore, engaging with AWS about desired solutions that are absent can prompt efforts to onboard those vendors.

4. Evaluate Products Thoroughly

The vast array of products in AWS Marketplace, including free trials and flexible pricing options, enables organizations to conduct due diligence on potential solutions. This evaluation can occur through proofs of concept or sourcing activities without necessitating direct sales engagement. Once a shortlist of solutions is made, organizations can request Private Offers from vendors for deeper commercial assessment.

Many customers collaborate with AWS when exploring alternatives or new solutions, as AWS provides valuable resources across various categories (e.g., infrastructure, machine learning, business applications) that can enhance planning and analysis.

5. Negotiate Effectively

Organizations often find themselves negotiating from a disadvantage when acquiring software, typically starting from vendor-favored boilerplate EULAs. This can complicate negotiations and lead to less favorable contract terms.

AWS Marketplace offers the opportunity to utilize previously negotiated templates, known as the Standard Contract for AWS Marketplace (SCMP), developed with input from customers and sellers. This contract is available for over half of the listings, and even those that don’t publicly use it may accept it in private offers.

Start by reviewing the standard terms with procurement and legal teams, then use the amendment template to create modifications that meet your specific needs. By leveraging a consistent base terms document, organizations can streamline negotiations with various vendors.

6. Maintain Commercial Flexibility

AWS Marketplace features allow customers to manage payment schedules and amend agreements to adapt to evolving needs. Sellers can control billing timing for AWS Marketplace transactions when creating private offers, accommodating financial year constraints or AWS spending commitments.

Existing agreements can be renegotiated as necessary, providing the flexibility to amend contract terms, pricing, quantities, or payment schedules, ensuring the agreement aligns with business requirements.

7. Foster Inclusive Leadership

Incorporating inclusive leadership practices can significantly enhance procurement strategies. By ensuring diverse perspectives are represented, teams can achieve better decision-making outcomes. For more insights on this topic, refer to this blog post on the value of inclusive leadership.

Additionally, it’s essential to stay informed about compliance matters. For instance, the DOL’s focus on illegal provisions in arbitration agreements is a critical topic for organizations to monitor, as highlighted by SHRM.

Lastly, as organizations strive to onboard effectively, exploring resources like this excellent article on onboarding at scale can provide valuable lessons from Amazon.