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AWS Managed Services could strain channel relationships

The unveiling of AWS Managed Services last month has led channel experts to question Amazon's partner strategy; other news from the week.

AWS Managed Services, launched Dec. 12, has raised a number of questions about the future of Amazon's channel strategy. Among the top questions is whether Amazon intends to eventually encroach upon MSPs' traditional territory.

The new AWS service offers tools to automate tasks that include incident monitoring and resolution, patch management, security and access management, and backup and restore. While AWS Managed Services' targeted market is the Fortune 1000 and Global 2000, industry watchers wonder what would stop AWS from bringing the service to midmarket or small and medium-sized business (SMB) customers.

"I would be shocked if they aren't already trying that out right now," said Charles Weaver, CEO of MSPAlliance, an industry organization for cloud and managed services professionals.

Charles Weaver, CEO, MSPAllianceCharles Weaver

Neither Weaver nor Kevin McDonald, executive vice president and CISO at Alvaka Networks, found the AWS Managed Services announcement at all surprising.

"I think the direct targeting of channel business has been ... something that's very predictable" for the past decade, McDonald said. "In fact, I'm surprised it took [AWS] as long as it has."

If AWS eventually decides to push AWS Managed Services downstream to the midmarket and SMBs, which is plausible, many MSPs will find themselves competing against a cloud platform provider pervasive among their clients. From the perspective of small service providers handling sub-100-seat customers, which is a large part of the MSP market, McDonald thought AWS Managed Services would be "extremely disruptive," along the lines of Office 365's impact on the channel.

Kevin McDonald, executive vice president and CISO, Alvaka NetworksKevin McDonald

As a result, the service could be disruptive to AWS's channel efforts and potentially undermine some of its partner relationships, Weaver suggested. He added that several MSPs he has spoken to have said the service gives them pause about how much they rely on AWS. He thought it possible that partners could question whether they should entrust Amazon with their customer data or infrastructure. Some MSPs could consider moving to a cloud platform that's free of potential competition.

But AWS views the service as a boon to its partner community, not a threat. According to a blog post by Jeff Barr, chief evangelist at AWS, AWS Managed Services "was designed with partners in mind." He said that two new training programs, AWS MS Business Essentials and AWS MS Technical Essentials, aim to support partners in building a practice around the service.

If Amazon does decide to compete directly with MSPs in the midmarket and SMB space, Weaver noted that MSPs will have the same competitive advantage they had in the early 2000s, when "everybody, the analysts included, thought that the telco giants would enter and dominate the managed services space." MSPs have the customer service and trust of their customers that big-box vendors typically struggle to achieve. MSPs that "have demonstrated trustworthiness ... will win the hearts and minds of their customers," he said.

Looking ahead, McDonald said he has no doubt AWS competitors like Microsoft and Google will go down this road, as well, giving AWS "a big run for their money ultimately."

Microsoft restructuring partner, services teams

Microsoft revealed it is amid an internal reorganization effort to merge its product and services groups, which it said will take effect Feb. 1.

According to ZDNet, the Microsoft restructuring will involve sales, partner and services teams under the umbrella of the Worldwide Commercial Business group, which Judson Althoff leads as executive vice president.

Microsoft plans to make the following changes:

  • Merge its Enterprise Product Group with the Small and Midmarket Solutions & Partners business, which will be led by Chris Weber, currently corporate vice president of small, midmarket solutions and partners.
  • Establish the "One Commercial Partner" business, which will combine Microsoft's ISV team, the Enterprise Partner team and the Worldwide Partner Group team. Ron Huddleston, corporate vice president of enterprise partner ecosystem at Microsoft, will lead the One Commercial Partner business.
  • Form a new business unit called Microsoft Digital, tasked with encouraging Microsoft customers and partners to use and develop on Microsoft cloud products. Anand Eswaran, corporate vice president of Microsoft Services, will lead the team and maintain his role in the Microsoft Services unit.
  • Combine the Worldwide Public Sector and Industry Business groups into one entity under corporate vice president Toni Townes-Whitley.

"These changes are designed to unify teams from across the Commercial Business, making it easier to do business with Microsoft and meet the needs of its thriving partner ecosystem and customer base," a Microsoft spokesperson said.

Bluewolf sets sights on cognitive

Bluewolf, a Salesforce consulting firm IBM acquired last year, plans to emphasize cognitive technology in 2017.

"As I look at 2017, cognitive is going to be a driving force," said Eric Berridge, Bluewolf's co-founder and CEO.  "It's a big part of our go-to market."

Berridge said he views cognitive as an approach in which an enterprise makes sure it is leveraging all of its data -- data generated inside the organization, data obtained from third parties and social data. That data, once collected and parsed using a cognitive platform, holds the key to delivering exceptional customer experiences, he noted.

A cognitive platform can augment human interaction, according to Berridge. He cited the example of a call center agent wading through material or digging through a system to find an answer for a customer. Cognitive technology can help the agent find the answer faster, he said, adding that he sees Salesforce Service Cloud as one of the big use cases a cognitive platform can help automate.

Berridge said 2017 will kick off a decade in which organizations will shift their focus from back-office systems such as ERP to customer-facing operations.

"I think we are very quickly moving into a world where organizations realize it is the front end of their business -- their brand [and] how they interact with customers -- that ultimately will allow them to sell premium products in the marketplace and drive growth and margins," he explained.

Organizations making that transition can deploy Salesforce's customer engagement platform and use cognitive technology to drive "massive amounts of data through it."

Cognitive, however, isn't the only propulsive force behind Bluewolf's 2017 prospects. Berridge also cited IBM's international reach. As an IBM company, Bluewolf has representation and resources in every major city worldwide, he said.

"Our global outreach and ability to deliver service ... globally is greatly expanded," Berridge said. "That is where we will see a lot of the growth."

AWS signs service delivery partners

Amazon Web Services is working with more than a dozen partners within its recently launched AWS Service Delivery Program.

The program lets customers locate AWS Partner Network ( APN ) partners that have expertise providing specific AWS services, while providing APN partners with an opportunity to differentiate through specialization, according to the company. Partners may qualify for one or more AWS service delivery distinctions. Delivery distinctions are currently available for such services as Amazon Aurora, Amazon Lambda, Amazon CloudFront and AWS GovCloud (US). Program participants include Brillio, CAPSiDE, CorpInfo, Datapipe, Flux7, iTMethods, Mitoc Group Inc., Mobiquity, REAN Cloud, 2nd Watch, SoftServe, TechConnect IT Solutions, Trianz and TriNimbus.

David Lucky, director of product management at Datapipe, said in order to qualify for the program a partner must pass service-specific verification of customer references and a technical review.

 "The customer reference requires a company to complete a questionnaire regarding the service and its implementation for AWS to review and validate, which may include a technical review led by AWS, with AWS making the final decision on inclusion," he said.

Lucky said Datapipe is among the first APN partners to obtain AWS Service Delivery Partner status with the following services: Aurora, CloudFront, Database Migration Service and RDS PostgreSQL. 

Datapipe is also participating in the AWS Public Sector Partner Program for partners working with government, education and nonprofit customers. Lucky said requirements for joining this program include customer references and employing a number of staff that hold AWS technical certifications.

The AWS Service Delivery and AWS Public Sector Partner programs were both launched last year at AWS re:Invent.

Other news

Here's a look at more channel news from the week:

  • It's official. Xerox has completed the split of its digital print technology and business process services operations. The business process side of the company is now Conduent Inc., an independent public company trading on the New York Stock Exchange. According to Conduent, the company has $6.7 billion in annual revenue. Xerox, meanwhile, emerges from the split as an $11 billion company. Xerox said it will target investments in growth areas such as document outsourcing and small and medium-sized business solutions. Xerox announced its plan to break up the company in January 2016.
  • Most vendors believe indirect sales will lead the way in 2017, according to Global Technology Distribution Council (GTDC) survey. The poll of more than 70 vendor channel executives revealed that about 62% of the respondents expect their indirect business to grow faster than direct sales next year. GTDC cited that survey result as "evidence that distributors have a right to feel bullish heading into the new year."
  • Solution provider PCM Inc. snapped up Stratiform Inc., a Microsoft-based cloud provider based in Calgary, Alta. PCM, which is headquartered in El Segundo, Calif., said the Stratiform buyout will expand its cloud capabilities and deepen its relationship with Microsoft among other vendors. PCM intends to leverage Stratiform's cloud expertise in the U.S. and said the acquisition will help extend its reach into North American SMB, enterprise and public sector markets.
  • CDW and World Wide Technology revealed that they have obtained the elite Titanium Black status of Dell EMC's post-merger channel program, slated to launch on Feb. 4. At the Global Partner Summit in October, Dell EMC channel chief John Byrne said the new program will have Gold, Platinum, Titanium and Titanium Black tiers, with Titanium Black reserved for "the best of the best."
  • TriCore Solutions, a company that provides managed application, cloud and infrastructure hosting as well as consulting services, has entered a partnership with Solix Technologies Inc., a big data application provider. According to Solix, TriCore Solutions will offer enterprise archiving as an additional service, providing database archiving, application retirement, data masking and test data management.
  • DH2i Company, which provides Microsoft Windows Server application portability and management technology, expanded its DxAdvantage Partner Program into the Asia-Pacific (APAC) market. New strategic alliances include Korea Cyber Tech Inc. and ApON Innovative Solutions. The DxAdvantage program, launched in October 2016, offers incentives and support for selling DxEnterprise container management software.
  • Giuliani Partners LLC, the management consulting firm founded by former New York City mayor Rudy Giuliani, has selected BlackBerry Ltd.'s BlackBerry Secure software as the platform for its cybersecurity consulting services business. According to BlackBerry, Giuliani Partners will use the company's technology to conduct infrastructure assessments, identify potential cybersecurity vulnerabilities, address gaps and secure endpoints. BlackBerry said the partnership "provides an opportunity for BlackBerry to further expand its channels of distribution." BlackBerry said it will pursue channel partner relationships as it rolls out BlackBerry Secure, which launched in December 2016.
  • A new partnering arrangement between Concerto Cloud Services and Acumatica, a provider of cloud business management software, aims to help companies in the health and life sciences industry accelerate ERP adoption. The Concerto Cloud for Healthcare provides integration across ERP systems, electronic health records, enterprise content management and other applications, according to Concerto.

The Market Share is a news roundup published every Friday.

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