Amazon’s recent announcement of the Amazon Web Services Marketplace (AWS Marketplace) is loaded with a periphery of implications on servers, storage, applications and the future of the channel for enterprise IT services.
We are already seeing a movement from on-premise servers and storage to off-premise / cloud based Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS). Just look at the growth and success of cloud companies like Amazon over the past 5-10 years. Sure, Amazon is the 800 pound elephant in the room relative to the cloud, but their vision and strategy has given birth to the inception of hundreds (if not thousands) of what we call Tier 2 or Tier 3 “cloud companies” across the globe that look to provide what Amazon is providing to specific vertical markets and localities. I think of companies like Savvis that offer cloud solutions for the Financial, Media, Government, and Retail industries, or companies like True Cloud that offer solutions to medium sized companies in the US.
Amazon Marketplace may not pose a big threat to established cloud providers like Savvis (owned by CenturyLink), but what does it mean for smaller ISPs (Internet Service Provider) looking to build a cloud services program for local small to medium sized businesses? Would an ISV (Independent Software Vendor) rather offer their application via Amazon who already has the size, scale, and marketing prowess, or engage with local ISPs just moving into the cloud? Is Amazon poised to increase the barriers to entry for local ISPs?
Probably not…but, I think when it comes to the local ISPs, you always go back to the roots of the IT channel…what has made the channel so successful: customization, flexibility, specialization, support.
1. Customization: Amazon, being the size they are, may be limited in customization. This has always been the burden of large OEM system suppliers like HP, Dell, IBM etc. and has been the alue-add touted by most channel system builders who are more flexible and nimble when it comes to customizing systems for small to medium sized businesses. The cloud is no different when it comes to ISP’s value add to the ISV.
2. Flexibility: This goes hand in hand with customization. Because local ISPs will be smaller that the likes of Amazon, they should be more nimble in how quickly they can address growing SMBs needs.
3. Specialization: With the growth of the cloud especially with solutions like AWS Marketplace, enterprise IT infrastructure is bound to get more and more commoditized. Yet the services required by different vertical markets will not. The differences between the needs of a small to medium healthcare provider to those of a video production house will be wide and varying. The ability for a local ISP to cater to these unique needs would be a differentiator.
4. Support: The opportunity for local ISPs to partner with local service providers and systems integrators can prove to be a large value add to SMBs. Many channel customers (resellers, VARs, service providers, integrators) need to figure out how to shift their business to the cloud. What if local ISPs and ISVs joined forces to educate, train, and enable local resellers to not only sell their cloud services and applications, but also elevate the level of support that SMBs need in their gravitation to the cloud. That seems like a winning proposition to me.
Remember when Amazon was just a place to buy books? Books seem to be the last thing on their mind these days.