Amazon Web Services (AWS) will use the channel – rather than direct sales – as the engine of its growth in the enterprise market.
Founded in 2006, AWS has risen rapidly to dominate the booming infrastructure-as-a-service (IaaS) market, leaving rivals including Microsoft and Google playing catch-up. Its S3 storage service now holds more than two trillion objects.
Having launched the AWS Partner Network (APN) last year, AWS now has 4,000 consulting, reseller and ISV partners globally, including Smart 421 and Cloudreach in the UK.
Talking to CRN at yesterday's AWS summit in London, Brian Matsubara, senior manager of global ISV programmes at AWS, said the channel is growing as a proportion of overall sales as AWS looks to bulk out its presence in the enterprise space.
"Of course there is a self-service aspect to what we do – people can sign up and use AWS without having to talk to anyone," he said.
"But the large enterprise customers and government agencies are going to need a direct interface to help them understand how to use AWS. We will continue to build out our enterprise sales team but we are not going to overbuild: our overall expansion strategy will be driven through the channel."
APN classifies partners as either technology partners/ISVs, consultancies or resellers, with the latter typically able to achieve upfront discounts of 30 to 40 per cent if they buy AWS' services in bulk, Matsubara said.
But a typical reseller/consultancy partner will bolster their margins by layering extra services on top of AWS' platform and monetising the entire stack, which could be something like content management, he added.
Last week AWS – which now offers 33 services spanning storage, compute, database and application management – announced that partners can also certify by competencies designed to make it easier for customers to find a channel partner specialising in a specific solution.
The first two competencies are for big data and business intelligence/analytics but over the next year those relating to SAP, Oracle and Microsoft will also be launched, Matsubara indicated.
AWS has delivered 31 price cuts since its launch and Matsubara said it would continue to draw on its economies of scale following Microsoft's pledge to price-match AWS as it announced the general launch of its Azure infrastructure service.
"The fact they are using us as a benchmark is flattering and over time it will be interesting to see their ability and willingness to continue to match prices," he said. "As our scale grows and our operational efficiencies get more refined, we will be able to deliver the same service at a lower price."
Joseph Spear, marketing manager at Smart421, said scaling the channel would be vital to AWS' fortunes in the enterprise space.
"AWS is going to attract a high number of small instances and repeat business from small tech start-ups but there are some substantial revenue streams to be gained if they can attract more enterprises – and we are in the business of servicing enterprises," he said.
Spear added that AWS was a "tremendously supportive vendor" but urged it not to follow in the footsteps of other large enterprise vendors by building a large professional services organisation.
"If there were one potential improvement, it would be to remain pragmatic and to not fall into the trap of becoming too big for its boots and making the hoops [for partners] unnecessarily complex," he said. "If it starts to hire consultants in the style we employ and begins offering a similar service, that would be potentially a big gotcha for a business like us."
Pontus Noren, co-founder of Cloudreach, which has completed more than 100 AWS projects, claimed AWS' channel had been a free-for-all until the launch of APN last year, which he said demonstrates the vendor's commitment to an indirect sales model.
"AWS is extremely supportive and is seeing more and more value in a strong partner community," he said. "We can help them penetrate accounts with 500 to 10,000 users as AWS does not do professional services in the way we do."
Noren said he would not be against AWS building a bigger professional services organisation.
"I think the bigger corporates will want Amazon to put skin in the game, if for instance they are moving 17 datacentres into its cloud," he said. "AWS may do only five per cent of the work but that is enough for the CIO to feel it is part of this and that they have some big balls to squeeze if they need to."
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