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Blog February 13, 2019

Has AWS Become a Threat to Its Own Partners?

When it comes to cloud solutions, Amazon Web Services (AWS) has been quite a technological wonder for its users. Whether it’s about hosting enterprise websites or running large-scale applications, the platform has proven its worth consistently through its secure and scalable solutions.

That is one of the many reasons why corporations such as Vodafone, Netflix, Comcast, and Dow Jones have chosen AWS as the home to their cloud solutions. Along with these companies, many other entities of even smaller sizes have obtained AWS’ solutions in the past few years with the help of its partners.

What Are AWS Partner Solutions?

AWS partners are third-party service providers that provide a critical role in the deployment and management of AWS. These companies provide engineering, DevOps, SysOps, and integration assistance that allows more and more organizations to leverage the power of AWS.  AWS itself simply doesn’t have the resources available and necessary to provide this type of support to every end user of AWS. As a result, a vibrant and skilled partner community has developed and serves a critical role in the rapid growth and adoption of AWS.

Many of these partners have actually crafted their own solutions and services that make AWS even more powerful. Applications that monitor AWS, applications that combine different AWS offerings in new ways, applications that turn the tech of AWS on its head in new and amazing ways…the sky has almost literally been the limit when it comes to what talented AWS partners are capable of.

These services work because AWS’s partners make them accessible, reliable, and most of all, affordable for the masses. While AWS focuses on catering to large- scale corporations through cloud, its partners take those high-performance solutions and distribute them into development, logistics and hosting solutions for those who want affordable cloud provision services for their websites and applications.

That is why, the AWS Marketplace is full of third-party partners that allow users to build, deploy and scale their applications and enterprise websites through various means. For example, if it hadn’t been for partners such as Heroku, a cloud application development and deployment platform, then many of AWS’ current applications might not be running in the first place.

The same goes for various other partner applications on the marketplace, which range from big data processing to AI integration, and even more technologies that AWS initially did not provide with its cloud.

What Made AWS Partners So Successful?

Much like the original iteration of Amazon, AWS initially focused on being inventory free. All it did was provide a cloud platform for its clients to use. What they did with it or how they achieved their end goals were completely up to them, or the third-party clients that would come to AWS in the hopes of finding business opportunities (which they usually still do to this case).

This means that a large part of AWS’s current success was built on the backs of these partners who extended AWS capabilities in new and interesting ways. If it had not been for these partners, then AWS’s ecosystem might not even be a fraction of what it is today.  The lack of development and hosting tools during the initial years of AWS showed that there was much more that needed to be done and these partners filled that void.

AWS Changed Its Approach Too Fast

Considering this, it was a surprise for many to see Amazon having progressed so far. Starting in earnest 2015 and continuing on a regular basis up until now AWS has been developing services that not only cater to the same audience as their partners but directly compete with what partners are already offering to customers.

This arguably all began when AWS started offering QuickSight, a data management and presentation tool. QuickSight brought direct competition for Tableau, which was a popular provider in the same segment and was touted as a prominent AWS partner in its marketplace. But AWS did not stop there and followed up with products such as Amazon X-Ray, Amazon Pinpoint, Chime, and Connect. These solutions directly competed with partners in analytics, monitoring, team communication, and customer service solutions, respectively.

One of the most notable development came in the form of CodeStar, which provided very direct and robust competition to yet another prominent AWS partner: Heroku. As a cloud application development and deployment platform, CodeStar countered Heroku’s offers and did so with quite some aplomb. As a result, some of Heroku’s existing and potential user base was bound to shift to CodeStar.

How Did the Various Updates Affect AWS Partners?

While Amazon made strides in the name of innovative upgrades for its users, these developments impacted AWS partners to their very core. The decisions seemed savage, and the recent announcements made at the AWS re:Invent 2018 did not do anything to make their effects better.

Changes Announced at re:Invent 2018

At the conference, which is considered the largest of its kind in the cloud industry, AWS announced many updates that were counterintuitive to AWS’ initial commitment to its partners.

Several new products and improvements were announced to the AWS platform which would be in the same lane as some of its popular partners, and as a result, would compete against them. With that being said, some of these products are innovative and exclusive to Amazon, which would actually work in the favor of its partners.

Some of the most prominent changes and updates that had been brought to the table included but were not limited to:

  • Launch of Amazon Forecast, a prediction tool based upon time-series data.
  • Launch of Amazon Elastic Inference, a solution to supplement EC2 instances with GPU inference. According to Amazon, the solution could reduce deep learning costs by up to 75 percent.
  • Launch of AWS Outposts, data center hardware. The product was announced in collaboration with VMware.
  • Launch of Amazon Managed Streaming for Kafka, which makes Kafka a fully managed service running on the AWS platform.
  • Updates announced for Lambda, a serverless compute service where users can run code without having to provision server or compute power beforehand.
  • A slew of other updates that include but are not limited to the segments of big data, storage, AI, and machine learning.

As mentioned above, some of these developments are completely innovative and one of a kind where they do not compete with any AWS application. However, others seem to once again compete with the current partners by offering the same solutions but directly from AWS itself.

While this may seem like a grim approach to an otherwise propitious setup for AWS partners, all is not lost.

How Amazon Repeated the Same Approach With Its Original Platform

As mentioned earlier, Amazon had started only as a connectivity platform between customers and vendors. As a result, it did not hold any inventory whatsoever.

But it all changed with the launch of Amazon Basics, everyday products that were now offered directly with Amazon branding.

That seemed to cause issues with many related parties at the time, who were not only dealing with a new competitor but one that actually ran the very platform where their own store was located.

However, as time would show, the developments by Amazon did not do much to obliterate its competition. They simply meant Amazon became a vendor on its own platform with other, non-Amazon stores receiving the same search algorithms, the same ratings, and the same infrastructure support that they had been doing before the launch of Amazon Basics.

Amazon Basics was introduced almost 10 years ago in 2009. But as all of us can see, the launch of that product line hasn’t pushed back Amazon or its platform partners from progressing at their own pace. In fact, the platform remains stronger than ever with its outreach, offerings, and even corporate social responsibility, with the last being its Achilles’ heel that it now seems to be making up for accordingly. In fact, it’s possible – or even likely – that Amazon Basics expanded the market for all vendors as customers started to spend even more time looking to the Amazon marketplace to fill even more needs.

That is the same case with AWS in its current journey for progress.

Why Being An AWS Partner is Still Beneficial

The AWS platform may be adding an array of features, but in order to do so efficiently, it also has to manage its own costs.

Solutions such as deep learning and AI do not come cheap, especially when they are exclusively performed for an entity, and cannot be offered to customers who choose lower-tier products. That’s why it’s important to recognize that most of the solutions directly offered by AWS require the end user to have a substantial budget.

And filling the need of wide swaths of customers that don’t have enterprise-grade budgets is where AWS partners come in.  Instead of asking customers to pay a fortune in terms of development and assistance, they can offer their own solutions at a fraction of their original cost.

In addition to that, this also promises a boon to secure hosting and deployment solutions offered by third-party partners through AWS. These new offerings mean that more customers can be catered to in the future, promising the kind of growth for everyone in the ecosystem.  So while AWS itself is offering more and more services to end-users, the development of AWS technology by both partners and Amazon itself are driving rapid growth that benefits everyone.

In other words, AWS hasn’t become a threat to its customers and it hasn’t become a threat to its partners. What AWS has done is evolve from observer to  more active participant in the technological behemoth it created.

Connectria proudly serves not just as a certified AWS MSP but also as a collaborator and partner to other AWS service providers. We’ve long believed that together with others we can do great things and our work with AWS is no exception. To learn more about how we partner with AWS innovators, integrators, developers and engineering firms contact us here.  We’d love the chance to explore how we might work together.

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