Getting Started with Customer Financing for AWS Marketplace

By Katherine McCaslin, Sr. Program Manager – AWS

“AWS Partner Experience Transformation” is a blog series on updates to the AWS Partner Programs, AWS Marketplace, and Partner Central.

Amazon Web Services (AWS) customers are accelerating their digital transformation, simplifying procurement, and optimizing costs by using AWS Marketplace to discover, procure, provision, and manage third-party software, data, and services all in one place.

Many of these customers are further optimizing costs and accelerating their digital transformation by using financing for AWS Marketplace purchases.

In this post, I’ll share some of the reasons customers choose to finance AWS Marketplace purchases, how financing works, and how AWS Marketplace Customer Financing can help customers and AWS Partners get started with financing.

Why Customers Choose to Finance AWS Marketplace Purchases

In today’s fast-paced digital landscape, businesses are seeking ways to leverage cutting-edge technologies while optimizing costs around their technology investments. As more businesses use AWS Marketplace to procure, govern, and manage third-party software, data, and services purchases, many of these customers are also discovering the advantages of financing their AWS Marketplace purchases.

Preserve Capital and Optimize Cash Flow

Financing AWS Marketplace purchases helps businesses preserve capital and better manage cash flow. Instead of paying for software subscriptions and services up front, with financing customers can spread the costs over time through manageable payment schedules.

Preserving capital is vital for any business’s growth and sustainability. By opting to finance their AWS Marketplace purchases, companies can conserve cash reserves for other critical investments, such as product development, marketing campaigns, or hiring new talent. This strategy optimizes the allocation of resources and facilitates more agile decision-making.

Financing can also help customers negotiate favorable pricing on AWS Marketplace purchases by enabling the customer to purchase software with multiyear commitments.

Financed AWS Marketplace purchases can apply towards AWS spend commitments, subject to a customer’s spend commitment terms. In addition to retiring spend commitments, some customers are using financing to recognize diversity spend by choosing to finance AWS Marketplace purchases through diversity spend-eligible Channel Partners that offer financing. This use case allows customers to directly pay a diversity spend-eligible Channel Partner acting as a lender for AWS Marketplace purchases.

Accelerate Migration and Innovation

In the competitive business landscape, staying ahead of the curve is essential. Financing software and services can allow customers to invest in new technology, accelerate their cloud migration, and innovate more quickly by allowing them to bridge budget gaps.

Financing AWS Marketplace purchases enables businesses to gain immediate access to innovative solutions without the need for significant up-front investment. This swift adoption of advanced tools can give companies a competitive edge, as they can swiftly respond to market demands and ever-evolving customer expectations.

How Financing for AWS Marketplace Works

Now that we’ve discussed some of the reasons customers are choosing to use financing for their technology investments, let’s talk about what kinds of finance options are available for AWS Marketplace purchases and how it works.

Figure 1 – Workflow for AWS Marketplace customer financing.

Customers are able to use third-party financing options for AWS Marketplace Private Offers, Channel Partner Private Offers, and Professional Services purchases of all sizes. Customers can choose to work with an AWS Partner or traditional lender that is able to offer finance terms for AWS Marketplace purchases.

A financed Private Offer follows the same easy-to-use process as a typical Private Offer, except instead of the customer paying their own AWS invoice for the transaction the customer forwards the invoice to the lender to pay AWS on their behalf. The lender then invoices the customer at the terms agreed to in the finance agreement.

Customers interested in using financing for AWS Marketplace purchases should consider the following:

• Identify your needs: Begin by identifying the software solutions or services you need from AWS Marketplace. What’s your desired payment schedule and terms? Are you interested in deferring payment to bridge a budget gap, or are you looking to manage cash flow over a longer period of time? Are you able to negotiate any discounts by purchasing a multiyear subscription?
• Choose the right financing partner and agreement: Many AWS Partners offer their own financing or work with preferred lenders to offer flexible payment options. Research your options and consider factors like interest rates and repayment terms. AWS Marketplace Customer Financing is available to answer questions, provide support, and lender options for many geographical regions. Consider obtaining finance terms from more than one lender to find competitive terms and interest rates. If you need help finding a third-party lender or partner, AWS Marketplace Customer Financing can provide assistance.
• Select and move forward with the finance agreement: Once you’ve chosen a financing partner to work with, review the terms of the agreement. This includes repayment period, interest rates, and any associated fees. Ensure you have a clear understanding of the financial commitment you’re making and how it fits into your budget.
• Subscribe to your private offer or Channel Partner Private Offer: After subscribing to the offer, download your AWS invoice for the AWS Marketplace transaction from the AWS Billing Console, and forward the invoice to your lender. Note that your AWS billing account must be set to invoicing terms. Customers on credit card payment terms will need to change their billing account to invoicing terms prior to subscribing to the private offer. The lender will then remit payment to AWS on your behalf. They should note your AWS account and invoice numbers with their payment. The lender will then invoice you directly at the repayment schedule listed in your finance agreement.

How AWS Partners Use Financing

The benefits of using financing for AWS Marketplace purchases aren’t only for customers. Many AWS Partners offer customers financing options a way to drive business growth, increase deal size, receive revenue up front for multiyear deals, and provide customers with flexible payment options.

AWS Partners, including independent software vendors (ISVs) and Channel Partners are increasingly incorporating finance options into their AWS Marketplace sales strategies. Many AWS Partners have their own financing arm or work with preferred lenders to include finance options alongside every customer quote. This proactive approach provides customers with payment options to consider, and can encourage customers to consider multiyear spend commitments they might not have otherwise considered due to annual budget constraints or limitations.

AWS Partners that are interested in formally incorporating financing into their AWS Marketplace sales strategy should reach out to AWS Marketplace Customer Financing to be connected with Channel Partners and lenders that have experience financing Private Offers and Channel Partner Private Offers for AWS customers. Some lenders and partners have APIs that make it easy for you to seamlessly integrate their finance quotes into your own customer quote process.

Conclusion

Financing AWS Marketplace purchases is a savvy strategy for organizations aiming to leverage cutting-edge technology without straining their budgets. By carefully selecting a financing partner, identifying your needs, determining favorable terms, calculating total costs, and integrating payments into your budget, you can further realize the benefits of purchasing in AWS Marketplace while maintaining financial flexibility.

By choosing to finance AWS Marketplace purchases, businesses can effectively manage their budgets, preserve capital, access cutting-edge solutions, scale with flexibility, mitigate risks, expedite budget approval, and minimize administrative efforts.

As the digital landscape continues to evolve, leveraging financing options for AWS Marketplace purchases can position businesses for growth and success while maintaining a balanced and sustainable financial strategy. Reach out to your AWS Partner or contact awsmp-financing@amazon.com to learn more.