Changing channel

Amazon Web Services' UK managing director Gavin Jackson tells Tom Wright how the public cloud leader is adapting to the channel's growing cloud adoption

Amazon Web Services (AWS) is no stranger to an indirect sales model, but even by its UK managing director's admission it has built its business on ambitious start-ups looking to cut out middlemen and expand quickly.

But AWS, along with fellow market leaders Microsoft and Google, has gone to great lengths over recent months to convince the tech industry that larger and slower-moving enterprises in highly regulated markets now have enough confidence to take their first steps into public cloud.

Organisations of this size are often catered for by the larger systems integrators but if the likes of AWS want to continue their rapid growth down into the mid-market, a different type of partner is needed.

As corporate and mid-market companies take notice of cloud, the channel is being summoned to boost its public cloud capabilities, according to AWS UK managing director Gavin Jackson, who said that his company is expanding its channel account management team to encourage partners to build out their AWS practices.

While AWS has always had an indirect sales model, Jackson said more business is likely to go through the channel as more traditional firms look towards the cloud.

"Right from the very first day of AWS an indirect route to market has always been part of our plans; we just simply grew up on younger start-up companies which had the engineering muscle to figure it out themselves," he said. "In this case they just wanted even our own field team to get out of the way and let them use the technology.

"But your more-established companies that have been around a lot longer and still have technical debts from more old-guard technology still want to break out of that cycle the same way enterprises do.

"That part [of the market] has been for the longest time somewhat neglected by partner ecosystems that went upmarket. Computacenter is squarely focused on filling that gap - and there are others as well."

Jackson said AWS' most recent figures showed business through reseller and systems integrator partners had grown by 110 per cent year on year.

He explained that this figure, along with the fact that AWS has over 100,000 customers in the UK, shows that the channel is already creating "fantastic growth" in serving the mid-market with public cloud.

While Jackson echoed Computacenter's view that public cloud has "crossed that chasm", he said that AWS' channel model remains very much focused on adding value, rather than traditional resell.

"It's still a value business, so partners that are doing the most work with AWS in their customers are still building value on top of AWS," he said.

"Computacenter specifically are building managed services capabilities and migration services, which are two hot buttons to push with customers right now. They want to move fast in the cloud.

"A lot of the engineering muscle that lives within mid-market customers and smaller customers doesn't actually exist and so they're all looking for partnerships to help build the next generation of applications."

Chris Bunch, head of Europe at AWS partner Cloudreach, said resellers looking to grow their AWS business should be prepared to accept a different relationship compared with the ones they're used to with their traditional partners.

"Amazon at their core are very customer focused," he said. "They will always do what is right for the customer and so will we.

"At times that will mean if you're a new partner and you're used to SAP paying you a 40 per cent margin for selling some licences - that world is gone.

"If you can build and deliver successfully for the customers, Amazon will reward you handsomely. Are we chasing a relatively thin rebate on Amazon resale? No. It's of no interest to us. There's no value in that and that business model is dead or dying. If you come and talk to [AWS] it's a very small number, but if you're building your business around that, you're insane."

To drive partners towards great value-add, AWS is expanding its internal channel accounts team to help partners increase their capabilities with AWS, rather than seeking new partners to keep up with market demand.

"Recruiting partners is never really the issue; we have tens of thousands of partners," he said.

"We already have pretty mature partner programmes, but the big shift will be the number of people we have [who can] talk to our partner channel to educate them on those programmes, rather than a programme shift itself.

"A partner can build a very profitable business with AWS if they believe that that is what the customer wants to do. Recruitment is not an issue, but building those competencies, very much like Computacenter has just done, is really the goal."