Amazon Cloud: Is It Good For The Channel?


Over the past few weeks, Amazon and its cloud services have been in the press. As reported, IBM and Amazon are battling it out over a $600 million federal government contract. At the same time, Hewlett-Packard outmaneuvered Amazon in winning a piece of cloud business from Workday, a startup that Amazon CEO Jeff Bezos is ironically heavily invested in but which apparently decided HP is a better supplier for at least part of its needs.

While you have to marvel at the fact that Amazon has leveraged its enormous infrastructure to build a cloud offering that's a serious competitor to IBM and HP, you also have to wonder if this is good for the channel.

First off, I'm not sure Amazon even knows there's a channel. It certainly has little to no expertise in building and managing high-tech sales channels, and while it has been looking for a channel chief for months, it has yet to bring on any well-known channel executives.

[Related: How Peeved Is Jeff Bezos At HP-Workday Deal?]

We are very big believers in the cloud model and talk all the time about how the partner community has great potential to use this new model to drive recurring revenue and drive their own company valuations much higher as a result. But we are also realistic that cloud services are just that, services. Services inherently mean an ability to be serviced, and Amazon likes to do so in a remote fashion. Heck, give it credit for being successfully impersonal and taking the human interaction out of commodity product sales.

But that's not what we are talking about here. If a book I ordered shows up a day late, it's not a big deal. But we are talking about a service that if it goes down, it takes down the customer's business with it. Amazon has had its share of services outages, and that's when the real service comes in. Can I get answers when there are disruptions? Can I be confident this is not going to be a recurring problem? How do I ensure that there are redundancies built in that allow me to keep my business up and running? Let's face it. Cloud doesn't mean set it and forget it. It requires constant massaging.

So without a meaningful channel or the kind of expertise in-house to build one, what can we expect from Amazon moving forward? Or, more importantly, does it make sense for solution providers to resell the Amazon cloud?

Considering Amazon as a supplier should be no different than choosing any other vendor. There are many important questions you have to ask in order to make the decision to put the livelihood of your customers' business on the Amazon cloud. Here are just a few.

1. Can I get immediate access to someone at Amazon to resolve problems for customers?
2. Is Amazon committed long term to building, growing and servicing cloud solutions through the indirect sales channel?
3. Is there a channel chief inside Amazon with the clout necessary to make things happen?
4. Has Amazon built a well thought out and resourced channel program and infrastructure?
5. What is Bezos' knowledge and commitment to the solution provider channel for this part of the Amazon business?
6. Can I make money selling and servicing the Amazon cloud while offering real value for my customers?
7. Do I feel comfortable that Amazon will be a worthwhile strategic supplier for the long term? If you don't get the right answers for these, then you may want to look toward others the way that Workday apparently did.

Robert Faletra, CEO of UBM Tech Channel, writes a monthly column on CRN.com. You can contact him via email at robert.faletra@ubm.com.