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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. From its secure and scalable solutions to hosting enterprise websites or running large-scale applications, AWS has consistently proven its worth.

That is one of the many reasons why corporations choose AWS as the home to their cloud solutions. This includes corporations large and small such as Netflix, Comcast, and Dow Jones. 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.

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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 DevOps, engineering, and integration assistance that enables more organizations to leverage the power of AWS. AWS alone doesn’t have the resources available and necessary to provide this type of support to every end-user. As a result, a vibrant and skilled partner community has developed. This community serves a critical role in the growth and adoption of AWS.

Many of these partners have actually crafted their own solutions and services that make AWS even more powerful. This includes applications that:

  • Monitor AWS
  • Combine different AWS offerings in new ways
  • Turn the tech of AWS on its head in new and amazing ways

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

That’s why the AWS Marketplace is full of third-party partner solutions. These solutions allow users to build, deploy and scale their applications and enterprise websites through various means. The same goes for various other partner applications on the marketplace, which range from big data processing to AI integration. There are also additional 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. This also applies to third-party clients who would come to AWS in the hopes of finding business opportunities.

Therefore, a large part of AWS’s current success was built on the backs of these partners who extended AWS capabilities. Without 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 partners filled that void.

AWS Changed Its Approach Too Fast

Starting in 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.

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.
  • Introduction of Amazon Elastic Inference, a solution to supplement EC2 instances with GPU inference.
  • Launch of AWS Outposts, data center hardware. The product was announced in collaboration with VMware.
  • Introduction 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 includes 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 in 2009.

The AWS platform remains stronger than ever with its outreach, offerings, and corporate social responsibility. It’s possible that Amazon Basics expanded the market as customers started looking to the Amazon marketplace to fill additional 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 is looking to add an array of features. In order to do so efficiently, it also has to manage its own costs.

Solutions like AI don’t come cheap, especially when they’re 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.

Addressing the needs of cost-conscious customers who don’t have enterprise-grade budgets is where AWS partners come in. Instead of asking customers to pay a substantial premium in terms of development and assistance, partners can offer their own solutions at a fraction of AWS’s original cost.

Additionally, this also promises a boon to secure hosting and deployment solutions offered by third-party partners through AWS. These new offerings enable more customers can be catered to in the future. It also promises that kind of growth for everyone in the ecosystem. While AWS is offering more and more services to end-users, the development of AWS technology by both partners and Amazon is driving rapid growth that benefits everyone. AWS has evolved from an observer to more of an active participant in the technological ecosystem 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 below.

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