Cloud commits are making waves, hitting a staggering $439B in Q1 alone. It’s no wonder everyone’s talking about how to maximize their potential.
But what exactly are cloud commits, and why should ISVs care?
Cloud commits-contracts, where enterprises prepay for cloud resources in exchange for discounts, have become the backbone of hyperscaler revenue and a critical lever for ISVs to accelerate co-selling.
Here’s what you need to know:
What Are Cloud Commits?
Cloud commits are long-term agreements where customers promise to spend a minimum amount with cloud providers in exchange for significant discounts. For instance:
- Google Cloud offers up to 70% discounts for memory-optimized instances.
- AWS and Azure provide spend-based commits, ideal for unpredictable workloads.
These contracts lock in long-term customer spend, creating predictable revenue streams for hyperscalers while reducing costs for enterprises.
Why Cloud Commits Are Surging
Recent data reveals explosive growth:
- $439B in total cloud commits across AWS, Azure, and Google Cloud in Q1 2025 – $20B added in just the first quarter.
- Q1 2025 cloud infrastructure spending hit $94B, driven by AI and enterprise digital transformation.
- Hyperscalers are investing heavily to expand data centers and AI capacity in 2025.
How Do Cloud Commits Help With Cloud Marketplaces
Hyperscaler marketplaces (AWS, Azure, GCP) are now central to enterprise procurement. The most clear advantage for ISVs is that they can use these pre-existing cloud commitments to purchase third-party software from cloud marketplaces.
- 50% of marketplace transactions will flow through partners by 2027.
- Customers increasingly use commitments to pre-allocate budgets for marketplace purchases, streamlining procurement.
- ISVs that align with commit-driven budgets see shorter sales cycles and higher win rates.
3 Strategies for ISVs to Leverage Cloud Commits
- Bundle for Commit Workflows: Structure your offerings as “commit-ready” to align with your customers’ prepaid cloud budgets.
- Boost Marketplace Visibility: Make sure your listings meet hyperscaler requirements to streamline co-selling opportunities.
- Leverage Cloud GTM Platforms: Use solutions like Labra to automate co-sell processes and quickly access committed spend pools.
The Future of Commits
With AI spend accelerating and cloud budgets ballooning, commits will dominate enterprise procurement. ISVs that master hyperscaler financial incentives and marketplace dynamics will capture outsized growth in this $723B cloud economy.
