How Dynatrace Doubled Deal Size with Cloud GTM & Drove 50%+ Partner-Sourced Deals
Hi, it's Roman from Partner Insight. Welcome to my newsletter on winning Cloud GTM and partnership strategies.
From 30% to >50% partner-sourced deals in just 6 months - Dynatrace's partner-first transformation showcases what's possible when you refocus your GTM on hyperscalers, partners and strategic accounts. You'll get an inside look on how they achieved this remarkable shift, with partners now driving 75% of all deals.
We'll also explore Microsoft's insights on turning their customer cloud commitments into your marketplace revenue, with 80% of MACC customers now buying through their marketplace.
💡 Before we dive in:
How does your Cloud GTM compare to the industry? We're benchmarking cloud marketplace & co-sell strategies in our new research with Clazar.
If you’re driving Cloud GTM at your company, take our 5-minute survey. You’ll get early access to findings (plus a $25 Starbucks card). Let's learn from each other!
Now, our Dynatrace playbook analysis (long read):
How Dynatrace Grew Partner-Sourced Deals from 30% to Over 50% in Just 6 Months
Dynatrace's partner-first strategy shows impressive momentum: partners now generate >50% of new logos (up from 30% just 6 months ago) and drive 75% of all deals.
The company beat revenue forecasts reaching $436M last quarter. It also previously won the 2024 Microsoft Americas Partner of the Year Award in Commercial Marketplace.
Let's break down what makes their partner-first approach so effective:
Strategic Partner Focus
Dynatrace made a deliberate pivot to align partners with strategic accounts. As CEO Rick McConnell explained:
"At the beginning of this fiscal year [April '24], we introduced go-to market changes focused on customer segmentation, partner enablement, and expanding our sales motion beyond application performance."
Cloud Modernization as Growth Engine
The company positions its partnerships around a clear market trend. As McConnell noted this week:
"Cloud modernization drives observability demand and is evidenced by the now more than $220 billion in annualized hyperscaler revenue."
Dynatrace has built strong partnerships with hyperscalers, like AWS, Azure, and Google Cloud, as well as GSIs.
The company won 2024 Microsoft Americas Partner of the Year Award in Commercial Marketplace and reported that their marketplace deals are 2X larger than direct sales.
Dynatrace aligned its partner GTM with enterprises struggling with "more than a dozen internal and external observability tools." This creates a compelling narrative for partners selling unified observability solutions.
From Influence to Active Deal Generation
The transformation in just few quarters is striking:
Q1 FY25:
"Partners influence more than 2/3 of our ARR... and the real thrust around our partner initiatives is to drive that 30% origination higher"
Q3 FY25:
"More than half of the new logos in the quarter were partner originated" and "More than three-quarter of the deals are transacted through our partner ecosystem"
Quality of Partner-Led Business
The focus isn't just on volume - it's about strategic wins. "In Q3, the dollar contribution of deals greater than $1 million grew 55% year over year" with partners playing a crucial role in these enterprise-scale opportunities.
Key Learning for Alliance Leaders:
Dynatrace didn't just add partners as a channel - they rebuilt their entire go-to-market with partners at the core. What stands out is how they transformed partners from deal influencers to primary business drivers in months.
We’ll look deeper into Dynatrace transformation much deeper in a second, but before that—I’d appreciate your quick help:
How Does Your Cloud GTM Compare? Take the 2025 Marketplace & Co-Sell Survey
I’m thrilled to invite you to our Cloud Marketplace & Co-Sell research in partnership with Clazar!
We’re benchmarking cloud marketplace and co-sell best practices—and we need your insights to make this research as impactful as possible for the entire Cloud GTM community.
Marketplace strategies are evolving fast, but key questions remain:
Which strategies actually drive revenue?
What sets top performers apart?
What does "success" really look like?
Most importantly—how can we all learn from each other to replicate what works best?
We’re looking for insights from GTM and cloud sales leaders driving marketplace efforts in their businesses. If this is you, please take a 5-minute survey and help to shape the future of cloud sales strategies.
Your benefits:
$25 Starbucks gift card (for qualified replies)
Early access to detailed findings
Benchmark your performance against industry leaders
Shape the future of marketplace GTM strategies
Your insights will remain confidential. All data will be anonymized and presented only in aggregate form.
Please take this 5-min survey now:
Thank you for contributing to this important research—we can’t wait to share the results with you!
And now back to our Dynatrace case study:
Cloud Momentum Drives Opportunity
At the recent Perform 2025 conference, Dynatrace shared a deeper look into their GTM strategy. Here are a few highlights that caught my attention:
Dynatrace is capitalizing on a massive shift to cloud-native workloads, which is dramatically increasing both data volume and complexity. As CEO Rick McConnell emphasized:
“The cloud is a huge factor. Why? Because it results in enormous quantities of data, massive increase in complexity.”
Beyond just hyperscaler revenue growth, Dynatrace is seeing widespread cloud-native adoption among its customers:
"Virtually all organizations at this point are moving cloud native, cloud native workloads. We see 85 to 90% of our customers or more, now have cloud native workloads. They're expanding in banks, they're expanding in commerce, healthcare — everywhere." — Rick McConnell, CEO
Rising Workloads & Demand for Unified Solutions
Steve Tack, CPO, connected this workload expansion to a growing demand for consolidated, unified solutions:
“The workloads are growing. Consolidation [for customers] is not just about ‘I want to deal with fewer vendors or simplify procurement.’ It's that they really need a different type of system and approach, and they want to bring those worlds together.”
Dynatrace’s strategy reflects this cloud-native shift, positioning them at the intersection of increased workload complexity and the demand for holistic, integrated solutions.
Partner & Marketplace Strategy: Cloud Co-sell is Critical
Dynatrace has developed a multi-tier partner strategy that aligns with the strengths of different partner types. As Dan Zugelder, CRO, explained:
“we're activating three key parts… GSI actually will take you more up market, if you look at GSI is going to play as a partner, typically, whether it's Accenture, Deloitte and some of the others in your IT 500, I think that's where they spend more of their time…
As you go down to the transactional business, you have a lot of regional players that are there - so our regional partners.
And then what's critical and one that we are spending a lot of energy and, and really I would say is really still in early days…is our co-sell with the hyperscalers. We have activated huge initiatives with the hyperscalers. That is a huge motion for us in that transactional business.”
Dynatrace’s Microsoft Americas Partner of the Year (2024) award in Commercial Marketplace and their growth reinforces its success in this approach.
Marketing’s Role in Partner Success: Co-Sell, Not Sell-Through
Dynatrace is rethinking partner marketing to focus on co-selling instead of just sell-through. As Laura Heisman, CMO, explained:
“I have a lot of conversations with the hyperscaler and GSI, my counterparts, CMOs or their marketing teams on what can we do. We've been building out the partner marketing organization along with the partner team within Dan's [CRO] organization.
They are glued the hip together on how are we gonna NOT just utilize our partners as a sell-through. This is a marketing opportunity, this is a co-sell opportunity. This is how do we design programs together? There are so much activity happening there, uh, that we see big opportunity for us”
Key initiatives include:
Joint marketing programs with partners
Co-branded content and campaigns
Enablement materials for partner sales teams
Sales Transformation: Strategic Focus & New Motion
Dynatrace has been methodically revamping their sales strategy, starting with the focus on the IT 500 segment. Dan Zugelder, CRO, explained their staged transformation:
"We had an IT 500 priority. We felt that we would add sales capacity density there…I think it's important to know is that we're changing our selling motion there and that we are going to become more strategic and less transactional in that arena.”
Why They Bet on IT 500
Strong customer base in the segment
Unique value proposition validated by existing clients
“We had a number of customers in that space that did a lot with us, thought highly of us, and gave us back feedback that we had a unique value proposition. So it was kind of easy to bet on that - and we did.”
Increasing Sales Density: A Calculated Risk
Dynatrace recognized an opportunity to increase account density, i.e. put more sales people on strategic accounts.
The company found that many sales reps with seven or eight accounts were only actively engaged with three or four.
To address this, Dynatrace decided to redistribute accounts, giving those with less activity to new reps. This allowed existing reps to focus on accounts with established relationships and ongoing sales efforts.
This allowed the company to change its selling motion to become more strategic, but this move wasn’t without risks:
“A lot of people that had seven or eight accounts, they were really doing business with three or four of them. … we kept those people, they kept those, that was a, you know, risk mitigation. They had relationships, they had active sales campaigns and pipeline.
And then sometimes there were three or four accounts that they didn't have a lot going on. So when we gave that to a new rep, remember they're kind of starting from scratch a little bit.” - Dan Zugelder, CRO
This strategy is paying off now.
Aligning Marketing with Sales Priorities
Dynatrace’s GTM shift wasn’t just about partnerships and sales motions—it was supported by a fundamental change in marketing.
Laura Heisman, Chief Marketing Officer, emphasized how closely marketing aligned with sales priorities to support this transformation:
“So we're aligned very closely in the marketing organization with the sales organization….
Coming in and just sitting with Dan and saying, ‘Where are your priorities? What are the customer segments? How do we increase investment in the globals and the strategic accounts that we need to do more there?’ [...] As he changes out his go-to-market changes, making sure that I'm doing the same thing to align very closely across everything that we're doing.”
The alignment wasn't just theoretical—it became a key driver of sales success.
Shifting Sales Messaging to Focus on Customer Problems
One of the biggest transformations was how Dynatrace approached sales conversations. Instead of leading with who Dynatrace is, they shifted to focusing on the customer’s problems.
As Dan Zugelder, CRO, explained:
“We no longer, we won't wanna start off our sales calls of who Dynatrace is. We wanted to start off our sales calls by saying, “You know who Dynatrace is. Let’s talk about your problems and how we solve them.’ That was our motion.”
Dan also highlighted the impact of this shift on the sales organization, crediting Laura’s marketing leadership:
“Laura won over the entire field sales organization—over 1,100 people—by helping them with this. [new messaging]
The field was like, ‘Hey, that’s what we want to go in and do. We don’t want to explain who Dynatrace is. We want to go in, we don't wanna explain who Dynatrace is. We want to go in and say, hey, what challenges you're facing? What's keeping you up at night? What's causing you, you know, pain? And then how can we align our technology to that? So I think we're on that journey, and I think that's working very well.’”
Dynatrace made impressive progress in executing this vision, moving away from transactional sales and towards strategic problem-solving with key customers and partners.
The company also mentioned plans to focus on other segments after they hone their IT 500 strategy. More to come.
Key Takeaways for Alliance and Cloud GTM Leaders
Build a Multi-Tier Partner Strategy – Different partners have different superpowers in scaling GTM.
Leverage Cloud Marketplaces Momentum – Treat marketplaces as a strategic growth channel, not just a transaction platform.
Align Marketing & Sales with Partners – Tight integration ensures a seamless GTM motion.
Lead with Customer Problems in Sales Conversations instead of company capabilities.
Dynatrace’s transformation shows that a partner-first GTM requires cross-functional alignment, cultural shifts, and execution discipline. When done right, the results can be transformative.
For Cloud GTM leaders, the key question is: Which elements of this playbook could you use to accelerate your own partner transformation?
How to Turn Billions of Cloud Commits into Marketplace Revenue
Cloud giants increased their customer cloud commitments to $419Bn, and ~80% of these customers now buy software via marketplaces. Here's how to tap into these budgets to accelerate YOUR revenue.
Lee Corbett, Microsoft UK's ISV Lead, revealed the playbook for turning these cloud commits into sales on their marketplace highlighting that 90% of marketplace sales came from SaaS ISVs.
The core idea is powerful yet simple:
Enterprises pre-commit billions in cloud spend over 1-3 years to get discounts. When they buy your software through Microsoft marketplace, 100% of the license cost can be deducted from these commitments (for Azure eligible solutions).
This is a huge incentive for customers for buying 3rd party products on marketplaces and completely changes the dynamic from "new expense" to "using already committed budget."
Two key scenarios (i.e. inflection points) that create perfect selling opportunities:
1️⃣ Existing commits that are underspent (therefore at risk)
Cloud commitments are signed contracts that have expiration dates
Work with cloud sellers to identify these accounts
Position your solution as helping utilize committed spend they'd otherwise lose
Highlight that 100% of license cost can be deducted from their commitment
Use this to accelerate deals - customers are motivated to avoid leaving money on the table
2️⃣ New commit negotiations in progress
Get involved early in the commit negotiation process
Combine your software purchase value with planned cloud spend
Help customers unlock additional discounts from hyperscalers
Get your revenue potentially locked into their multi-year commitment
To unlock this opportunity with Microsoft Azure:
Have transactable offer in Marketplace
Become Azure benefit eligible and "IP co-sell ready" by passing technical review and reaching $100K in revenue
This unlocks Microsoft seller incentives (they get paid % of your annual contract value)
To maximize your traction:
Align with Microsoft's sales plays
Map your target customers to Microsoft's industry focus
Consider involving channel partners via MPO
It's a win-win-win:
Customers are incentivized to buy via marketplace
Cloud sellers are aligned - As Lee noted, "For many of our sellers, the only way they're going to make their number is by selling SaaS ISVs via marketplace"
ISVs reach more customers globally and close bigger deals faster
The results speak for themselves: partners report much larger deal sizes (e.g., Dynatrace is 2X) through marketplace versus direct sales.
Commits are one of many benefits of marketplaces, but it's one of the most powerful.
That’s why hyperscalers and vendors now share insights on customers that more likely have commitments and their propensity to buy via marketplace
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Have feedback or a topic you'd like us to cover in a future edition? Just hit reply—I’d love to hear your thoughts!