'Selling AWS is now more profitable than Microsoft Azure' - Partners weigh in on AWS' channel strategy

Partners are ‘feeling the love’ from AWS following new partner announcements at re:Invent

Selling AWS has become more profitable than selling Microsoft Azure, one partner has told CRN, following a surge of investment into the channel from the cloud giant.

AWS announced a flurry of new partner programme changes at its re:Invent conference earlier this month.

The vendor reorganised its partner programme into five different "Partner Paths": software; hardware; training; distribution; and services (which includes professional, managed, consulting and value-added resale services).

The move is intended to give partners expanded access to benefits and provide a "more intuitive and streamlined experience".

AWS also announced the introduction of several new competencies, including an MSSP competency, and AWS energy competency and a migration and modernisation competency.

The partner programme changes were accompanied by a host of other announcements across the AWS businesss, including AWS Data Exchange for APIs which allows the use of third-party APIs on AWS, and the available of third-party Kubernetes applications on the AWS Marketplace.

AWS executives were keen to express their support for partners during the conference, with CEO Adam Selipsky telling delegates during a fireside chat session that partners were seen as a "major focus and strategic plank" of AWS' strategy since "day one".

"Sometimes people think that this is a new thing with us caring about partners. And it has literally been since day one - we've just added more resources and hopefully got better at it," he said at the time.

Partners that spoke to CRN said that the conference reflected how AWS has been ramping up its partner engagement over the last 12 months.

"This is my third re:Invent, but for the first time I was feeling real love from AWS as a partner," said Gordon McKenna, CTO of public cloud at Advanced-level AWS partner Ensono.

"Re:Invent has always been a conference for the builders, that's why AWS is so strong… but I felt the love as a partner this year. I feel they're really maneuvering and making partnership a better place."

AWS' partner ecosystem has come on leaps and bounds over the last few years, added McKenna. When Ensono first partnered with AWS 10 years ago, it was a much different relationship to what it is today.

"When we first partnered with AWS, I thought they would take a similar approach to what we had with Microsoft at the time.

"AWS were a lot less entrepreneurial; they wanted to see the money. It definitely showed that their parent company was a retail business. They would lean in with the partners that leaned in most with them, whereas Microsoft would traditionally invest in partners to help them grow."

But he said that AWS has changed its tact over the last few years, making massive investments in its partner ecosystem and marketplace to help grow its channel business.

"Over the last four years, I've seen AWS get their act together on the partnership front."

McKenna even said that selling AWS has become more profitable for Ensono in recent years than selling Microsoft Azure.

"In recent years it has become less profitable as a partner of Microsoft. I say that carefully because Microsoft would argue that there's never been more opportunity for partners to make money. But selling Azure directly with services on top of it, which is what we do, has become less profitable for us than selling AWS," he said.

"We're feeling that Microsoft is less profitable, and we're feeling the love from AWS."

Meanwhile, Rob Selby, group AWS technical lead at AWS Advanced partner Computacenter, added that he's noticed more maturity in how it approaches its partner ecosystem.

"Because their partner ecosystem has matured and they've got a lot of different types of partners and more enterprise focused partners, the way APN actually behaves now allows for more granular access, so for multi-geography partners like ourselves it has improved drastically, particularly over the last 12 months," he said.

Computacenter's group director of AWS Cloud, Andy Lancaster, added that the support from AWS has improved drastically over the last few years.

Computacenter signed a strategic collaboration agreement with AWS in April last year after becoming an advanced consulting partner almost four years ago and is now working towards achieving Premium status with the vendor.

"The way that AWS support for us, their global account team is aligned with us to help expand our reach and work closely with sales teams in different regions," he said.

"They give us access to the people and the technical expertise across the services that we need. The partner solutions architect team, which helps to define and validate our thinking with regards to appropriate customer technical solutions, and of course, financial investments. So really, if you're looking at things that you'd want from a partner, or from any of our partners, those are three key things that AWS have got and do offer us."

Lancaster added that the addition of "AWS Partner Paths", in which Computacenter is recognised as a services partner, will add clarity for customers about where Computacenter's skills lie.

"With the way it used to be structured, it wasn't clear to our customers where we were focusing. Now we're on the services path, it's much clearer to the customers. Fundamentally it is going to be the way we take our services to market and how we communicate with the customers that is going to help to separate us from the many other APN partners that are out there," he said.

Meanwhile, for McKenna, the introduction of a mainframe modernisation competency was a big deal for Ensono, which generates around 50 per cent of its business through mainframe services.

"For the first time in a keynote, ever, they mentioned mainframes - wow. That was probably the most exciting bit of news for us," he said.

Is AWS Marketplace the future of AWS?

AWS has been talking up the growth of its Marketplace this year. Head of AWS Marketplace, Stephen Orban, told us earlier this year that more than 500 channel partners are now transacting via the platform, while more than 1,600 ISVs are now listed across 50 technology categories.

McKenna and Lancaster said that they're seeing marketplace play an increasing role in their business with AWS.

"We're using Marketplace at an ever-increasing scale. We'll be doing more through the marketplace this year than we did last year," he said.

"More and more of our enterprise customers are requesting to purchase services through marketplace for the obvious benefits they receive in terms of drawdown against their enterprise discount plans and their committed spends to AWS."

McKenna added that Ensono already has its professional services offerings listed in Marketplace.

"AWS wants partners to put their wares, put their consultancy, put their offerings up in their marketplace. One, because it's a transactional way of dealing with partners, and it's very easy for a customer to buy some compute and then buy some partner offerings with it. And I think, secondly, it's much easier to manage from an administration point of view. If everybody's snapping into the same system, then you need less partner managers. It's basically a wise business decision to push customers into one type of framework and ecosystem."

But are we nearing a future where AWS Marketplaces becomes the primary way in which customers transact with their partners?

According to Lancaster, traditional software transactions will still be king.

"I don't believe it will become the primary way customers buy software. Yes, it is very convenient for them, it is a very convenient way that has additional benefits. Of course, the hyper scalars are also enhancing their own marketplace offerings. So yeah, it will become more and more complex, but I can't see a position in the next few years where that's going to overtake traditional software selling routes," he said.