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Comment by alephnerd | Hacker News Reader

> Basically lock everything down and make developers pay a % of their revenue, Apple style

At enterprise scale, locked down marketplaces don't work. They act as an forcing factor for larger organizations to build in house because no one wants vendor lock-in or to lose money via an arbitrage.

This is a major reason why you'll see large deals pushing for enhanced customization options or API parity, as larger customers have the ability to push back against vendor lock-in.

Furthermore, a relatively open market (eg. NGC) acts as a loss-leader by allowing a community to develop using a corporate standard, thus allowing you to build stickiness without directly impacting a customer's bottom-line

Fundamentally, a company driven by Enterprise revenue (eg. Nvidia) will have a different marketplace structure from a B2C product such as Apple's App Store where purchasers have little power.

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> At enterprise scale, locked down marketplaces don't work. They act as an forcing factor for larger organizations to build in house because no one wants vendor lock-in or to lose money via an arbitrage.

But you can say exactly the same thing about large companies publishing (consumer apps) in the App Store. Why would they want vendor lock-in?

I think AWS showed us that it could work for enterprises too.

Listing fees for AWS Marketplace are marginal compared to the overall margins of Enterprise SaaS, as 90% are the expected target margins in Enterprise SaaS - hence why 80% discounts are fairly common in enterprise sales.

More tactically, excessive charging on marketplace pushes vendors away from selling on AWS Marketplace and makes them develop alternative deployment methods, which reduce the stickiness of AWS, as hyperscalers are commodified nowadays.

Motorola learned that the hard way 40 years ago when pushing excessively restrictive OEM and Partnership rules compared to IBM.

AWS is only as strong as it's Partnership ecosystem, as companies that are purchasing tend to use 80-90 different apps along with their cloud.

Basically, Enteprise Sales shows hallmarks of a Stag Hunt Game, so a mutually beneficial pricing strategy amongst vendors (AWS, AWS Partners such as Nvidia, MSP) is ideal.

> At enterprise scale, locked down marketplaces don't work.

If this was true, we'd have more mobile computing platforms. Large enterprises publish in Apple's AppStore.

> Large enterprises publish in Apple's AppStore.

Purchasers from Apple's App Store are primarily individual consumers. It is a B2C play.

Monetizing an Nvidia marketplace such as NGC would be foolhardy as the primary users/"purchasers" are organizations with budgets and procurement power. It is an Enterprise B2B player.

In enterprise sales, the power differential between (mid- and upper-market) customers and vendors is in the customer's favor, as they have significant buying power and thus a higher user acquisition cost. The upside is revenue is much higher, margins are better, and you can differentiate on product as commodification is difficult.

This is less so in consumer facing sales as customers have significantly weaker buying power, but conversely have a much lower user acquisition cost at scale. Hence, a growth-based GTM approach is critical, as you need customers in aggregate to truly unlock revenue at scale.

They could still segment the market into large enterprises and small businesses.

Also, I don't believe the balance of power is tipping towards business customers, as nvidia is basically the only relevant player.

> If this was true, we'd have more mobile computing platforms.

If you think smartphone customers and server customers are evaluating hardware based on the same criteria, then why isn't Apple the leading datacenter hardware OEM?

> Large enterprises publish in Apple's AppStore.

Yeah? Where's my Pro Tools download on the App Store? Where's my Cinema4D download? Can I get Bitwig Studio from there? Hell, is iTerm2 or Hammerspoon even available there?

Large enterprises very explicitly don't publish on the MacOS App Store because it is a purely raw deal. If you're developing a cross-platform app (which most large enterprises do), then you've already solved all the problems the App Store offers to help with. It's a burdonsome tax for anyone that's not a helpless indie, and even the indies lack the negotiating power that makes the App Store profitable for certain enterprises.

> If you think smartphone customers and server customers are evaluating hardware based on the same criteria, then why isn't Apple the leading datacenter hardware OEM?

Because Apple doesn't want to be in the B2B space.

Let it never be said they didn't learn their lesson from XServe, eh?

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