AWS continues to ramp up its channel ecosystem as the traditional partner ecosystem wakes up to the cloud conundrum. ChannelWorld India spoke at length with Terry Wise, Vice President, WW Alliances, Channels and Ecosystem, AWS.
AWS is a large conglomerate with long-term existence, good client base, and fairly deep pockets. Can’t you cover the entire market for cloud without the channel route?
Actually, it is less about the channel and it’s much more about the ecosystem. The differentiated solutions from the ecosystem help grow the business multi-fold and evangelize the cloud uptake. Our business would be a tiny fraction if we did not have partners- whether they build ERP application, analytics app, provide managed services or SI services, serve vertical industries. We absolutely have to have the ecosystem and there is an opportunity for channel resellers to be part of the model and make good money with the broader set of solutions.
What is the maturity index of traditional channel partners (mainly box-pushers)with respect to the new paradigm of the cloud?
The traditional channel partners the made bulk of business transacting (hardware and software) than the professional services space. I see a dramatic change globally over the past six to twelve months. For a long time, anybody who resold hardware and software had a healthy business and they saw cloud as disrupting trend. The channels who see the writing on the wall are executing healthy business with AWS.
“Traditional approach has always been vendor first, channel next & customer last. We have flipped the model by starting with customers’ needs first.”
Terry Wise, VP, WW Alliances, Channels & Ecosystem, AWS
We see many of these partners in US and across the globe now building managed service practice, SI and consulting practice, because their customers now want to pay for the value of buying or managing IT. They can procure cloud services directly for us or anybody else but they need a value added solution provider and many partner companies have skilled resources and the customer relationship to take advantage of the cloud.
‘Born in the cloud’ companies lend itself to you or other cloud vendors. Which are the favorite channel communities lapping up AWS?
The MSP space is huge and they are some of the most successful consulting partners. The enterprise customers as they move and deploy tens and hundreds of Apps they need someone to help manage and operate all of that. We have around 85 certificate MSP partners globally who are certified through rigorous order out of the tens of thousands of partners. These channel companies are frankly winning a huge percentage of partner business.
New areas the of ecosystem in the software space exist around developing tools and platform. Companies like Puppet, Slack, that did not exist five years go are now core components of the enterprise software stack. The space around app dynamics, spunk is a really exciting ecosystem. The difference is that more companies are embracing DevOps, becoming agile and they are adopting cloud software like model.
The born in the cloud partner, of course, are moving fast with us. The global systems integrators see the cloud as the next outsourcing opportunity. We have been working with many of these MNCs (GSIs) headquartered out of India. The partners slowest to move on the cloud route are the ones with the heavy traditional reseller model of hardware and software.
What is expectation list by traditional hardware-centric channel partners from AWS?
Channels expect great products. They expect our help in defining the solution areas because the customers are asking for those specializations.MSP is one such space which is more horizontal. More customers are asking us for references of good partners in AI or analytics or Redshift. We are investing by helping channels to build their capabilities in these areas and promoting them back to customers and field sales who need partners with those capabilities for software or services or both.
“The real key is automation for channels to make more margins as lesser people service the same client set with more ‘business outcomes’ features.”
We are investing in training and certifications for partners and probably we expect most from partners most is the quality delivery. We have the whole solution piece laced with T&C and a heavy investment in GTM to cater to the partners’ expectations.
Customers today ask for customized solutions. Is your global GTM multipronged in terms of vertical-wise or domain-specific partners?
It’s really a mix. We have some very much specialized partners like a DevOps shop to help customer’s transformation journey to be agile. Other partners play across multiple discipline be it analytics for financial or retail space. Then you have large GSIs who position themselves as end-to-end solution provider.
We do business with over 90 percent Fortune 500 companies. They use one or more AWS partners. In some cases they work with a dozen of partners –some with complementary technologies and some are SIs. The bigger the scope of the project, we see more partners who are multifaceted- technology wise or vertical wise - provide the real value of cloud to the customer.
Traditional IT vendors and channels have a strong affinity with CIOs at the enterprise level. Do you see the cloud expand their network to LOBs, CMO, CFO etcetera?
Our partners will expand their market opportunities by striking more conversations with LOB and financial folks. Cloud is less about cheap hosting and much more about business innovation which tends to lend itself to top line growth and business process automation. Channels can effectively tell LOBs like voice recognition for example as a great product that gives them differentiation in the marketplace and by the way it is on the cloud. The long-term partner for us is the CIO. Most of these folks are going cloud first or they have a three to five-year migration journey which translates into huge opportunity for channels.
In migration , for example, here is good piece for business from partners on portfolio assessment, and then define a roadmap that involves architecture, TCO analysis, security audit, architecture offerings and the strategy from managed services. The actual work around migration is combination of people and tools which is opportunity to deliver services there. And that’s a big play.
Where is more business for channel partners of AWS - Greenfield or Brownfield?
Many startups are very technically savvy themselves and they will create the first version of their product themselves. They tend to turn to partners for software and managed service providers, as they get big enough to manage the data and put DevOp resources and product features. It is very similar in the enterprise space if it is a new application.
Terry Wise’s 5 Channel Mantras
Understand the customers’ preferred IT consumption model
Interact more with different C-suite executives & LOBs at the customer end
Acquire new skills to help customers’ DX journey
Innovate more to automate, build IP, add services across customers’ IT infra
Think big with cloud as many small players serve the global market today
The brownfield accounts is where lift and shift occurs as some customers move the workloads and apps out of the datacenter and move to cloud. They evaluate the compelling reasons to migrate maybe upgrade the database, add the new security feature. The enterprise and public sector which is fastest growing segment of our business and much of that is migration play which can be tomorrow or three years from now.
We have bunch of partners that don’t do managed services and infra but they want to build new APP as DevOp shop. Especially as we see digital transformation, analytics, innovation gaining prominence, the customers will pay premium for data scientists, cloud specialists and folks that understand the new-age tech landscape. And partners planning all of those service areas will succeed more.
Platform services piece for us is growing incredibly fast. AWS Aurora (Database platform services) is the fastest growing service in Amazon history. There is huge interest from the customers who want to move away from traditional database from bad vendor relationship or they just want to innovate. The same thing was with data warehousing and move to Redshift which was earlier the fastest growing space.
With cloud becoming defacto as per our talk, why many traditional channels still are apprehensive to move this route?
The biggest reason is that cloud is very different. Its different business model and partners often think they might not have the skills, confident to sell and deliver it. These are short term considerations.
Partners do understand and realize more that security is opportunity for them. If they can clearly articulate the security value of the cloud security and convince the customer that’s real value add on sale side. Then they get to do the projects to create the value add to application tier to security like Encryption, IAM, threat detection.
Another fear is that they have not been able to keep up with the new skillsets needed for cloud, big data, and cybersecurity etcetra and learning that the market is moving very fast. We ourselves at AWS have added 1000 features and services last year.
There is huge skillsets shortage of cloud specialist, data scientists, cyber security experts globally. How do you suggest the channels should deal with this concern on their customers' digital transformation journey?
It’s one of areas AWS is addressing as we subsidize T&C at massive rate and we continue to do that. One of the things partners can address is to pick their sweet spots, specialize and hire the required skillsets. Becoming a generalist partner as a master in all technologies will be rather tough as there is global shortage across the mentioned domain areas. It begins with university courses, government initiatives, market evangelism and we as an industry are working to reduce that skillsets shortage gaps around few emerging tech areas.
Cloud offer profitability that is certainly decent to good for partners. They can have more value add and the solution type which gives the differentiated margins. The real key is automation as partners can have lot of margin with less people and servicing the same client set. The important thing with cloud being that partners can instantly serve the global market. The hardware centric resellers are largely restricted to their local geography.
Do you seriously feel the days of hardware centric vendors are over?
We work with the customers and work backwards. Traditional vendor and channel approach has been vendor first, channel next and customer last. We have flipped the model by starting with the customer.
We are just in the early days of this whole cloud thing. The vast majority of products are still bought through traditional channel approach .I do think the value prop for cloud is so compelling that over time customers and datacenters will largely go away, the way people procure hardware and software will largely go away. I don’t know when that will happen and if all goes away. But it is hybrid world. And there lot of mainframes which is running for decades which I don’t think will support. I talk to CIOs all the times who never want to buy another server.