Thanks to Apple, every consumer thinks there’s an app for that. And for most consumer desires, there probably is. Especially since Apple’s App Commerce climbed to 1.1 Trillion in 2022. Yes, that’s 1,100,000,000,000 US Dollars! That’s a lot of money, especially when most apps are being sold for a few bucks.

When you consider:

• consumer app marketplaces are now a Trillion dollar business
• enterprises are buying more SaaS than ever, as every employee in every department wants an app(lication) to support every task they do
• enterprises pay 10X to 100X what individuals pay per user license, and, thus, the opportunity of enterprise app marketplaces is in the tens (to hundreds) of Trillions
• enterprises want easy, centralized, acquisition to limit the number of vendors they need to deal with / handle subscription invoices from

It’s easy to see why all the big software / cloud vendors are opening their own app marketplaces. A recent article on IOT Analytics shouted the rise of the B2B software marketplaces while quoting their B2B Technology Marketplaces Market Report (2024-2030) that noted that:

• they are the fastest growing procurement channel (for software)
• dedicated platform providers are seeing success
• some sellers make Billions

And they will continue to grow for a few years. But then, the hammer will fall.

What one has to remember is the following:

• many of these marketplaces are taking a big cut, like 30% or more, which is what a sales partner would have taken to compensate its employee(s) that actively sold the product, but they are doing NOTHING but creating a listing, making it searchable, taking an order, collecting a payment, and providing a license key … even when you consider cloud fees, payment processor fees, platform maintenance fees, they could be very profitable at 13% (remember that recent article on how roughly half a trillion dollars will be wasted on SaaS spend this year … well, this is only going to increase that as you’re paying almost 20% more than you need to for the licenses you do need and use)
• apps, licenses, and overspend is going to proliferate rapidly as “approved” app stores make it easy for every employee with a p-card to buy what they want, when they want
• those SaaS audits and rationalizations that identify 33%+ overspend are only going to reclaim at most 20% of that, if you’re lucky, because, even if the software developer is willing to refund unused licenses, they’re not going to refund that 30%+ they already paid the marketplace … and that’s if they’ll even talk to you because you acquired the license through a third party
• there’s no real negotiation opportunity when you buy from a marketplace

So as businesses race to digitization, they will embrace the marketplace as it will help them get part of the way there very quickly, but then when they realize just how much they are spending on app(lication)s, and turn Procurement on strategic procurement of SaaS, the first thing to go will be the app marketplace purchases … and then … it will be time for the hammer to fall.