Cloud marketplaces now take 3% of a SaaS sale, and India dropped both levies

01A cloud marketplace takes 3% of a SaaS sale

The channel that changed most since 2021 is the one the original did not mention. AWS Marketplace, since 5 January 2024, takes 3% of the pre-tax contract value on a public SaaS offer and 3% on a private offer under US$1 million, falling to 2% between US$1 million and US$10 million and to 1.5% above that or on any renewal. Server products, machine images and containers, still pay 20%. A channel partner’s private offer adds half a point.¹ Microsoft charges a 3% standard store service fee on transactable offers and lets a publisher halve it on private-offer renewals.² Google Cloud cut its marketplace share from 20% to 3% in 2021, as reported at the time.³

The reason the clouds charge so little is that the fee is not where they make money. A large customer usually has a committed spend with its cloud provider, and a marketplace purchase lets it spend that budget on someone else’s software through an invoice it already pays. The cloud wins the commitment; the vendor wins a buyer whose procurement has already approved the supplier.

The other four 2021 channels have not disappeared; they have changed jobs. Content still works for business software, because buyers read before they talk to sales, but it pays back over quarters, not weeks. Review sites and affiliates sell visibility rather than a buyer, and the price range the original quoted for them could not be traced, so we do not repeat it. Social media and paid search remain the most expensive way to find an enterprise buyer. The one number a founder can measure from the first rupee spent is the cost of a qualified meeting, not the cost of a click; judge every channel, a marketplace included, on that.

02Selling inside India on AWS: rupees in, rupees out

AWS now runs a separate route for sellers registered in India. It needs a standalone account outside AWS Organizations, a GSTIN and PAN, an Indian bank account and e-invoicing switched on, and it can sell only to buyers in India. Public offers are priced in US dollars; private offers can be priced in rupees with no exchange-rate swing. AWS India issues the GST tax invoice with the seller as seller of record, charges the buyer 18% GST and pays it through to the seller to remit.⁴ A vendor without an Indian entity can still reach Indian buyers through an Indian channel partner under AWS’s Designated Seller of Record programme.⁴

The route suits an Indian-registered vendor selling to Indian enterprises that already buy on AWS. It suits a foreign vendor less well. Under the Designated Seller of Record programme the Indian partner lists the offer and is settled by AWS, and the foreign vendor is paid by that partner outside the marketplace.⁴ That is a reseller arrangement in all but name, with a cloud invoice on top. A vendor in that position should compare it with a plain reseller agreement on the two numbers that matter: the partner’s margin and how quickly the money arrives.

03The levy that went away

The 2021 piece told founders to buy Google and social ads. In 2021 an Indian business paying a non-resident platform for online advertising had to withhold and pay a 6% equalisation levy, in force since 2016. From 2020 a 2% levy also fell on non-resident e-commerce operators, which was widely read as reaching foreign software sold online to Indian customers. Both are gone: the 2% from 1 August 2024 and the 6% from 1 April 2025.⁵

The effect on a vendor’s plan is modest but real. A foreign vendor no longer has to price a 2% levy into Indian deals, and an Indian company advertising on Google, Meta or LinkedIn no longer pays 6% on top of its ad bill. Neither change makes paid search a good channel for enterprise software; it only makes it a cheaper bad one.

04What a foreign vendor still owes India

GST is the line that did not go away, and who pays depends on who buys. A foreign vendor selling to a GST-registered Indian business does not register for GST in India: the buyer pays 18% IGST under reverse charge and claims it back. Selling to an unregistered buyer is different. Since 1 October 2023 a foreign supplier of online services to any unregistered person in India must register under the simplified OIDAR scheme and charge 18% IGST itself, whatever the buyer uses the service for.⁶

The right-hand column is where enterprise deals in India are actually won or lost. A bank’s vendor-risk team will ask for the audit clause, the incident-reporting commitment and the data-processing terms before it asks about features. A vendor that has them written down closes faster than one with a better product and a blank security questionnaire.