Partners: Amazon's $1 Trillion Valuation Doesn't Mean More Opportunities For The Channel

Wall Street firm Morgan Stanley believes that Amazon could be a $1 trillion company within the next twelve months, but the fact that investors value Amazon and project that its unprecedented growth will continue doesn't directly translate into more opportunities for the channel, solution providers told CRN.

A new report published Sunday by Morgan Stanley included revenues from five Amazon business segments, including its cloud computing business Amazon Web Services (AWS) and the provider's retail business. Morgan Stanley analyst Brian Nowak, the report's author, estimated AWS to be valued at $270 billion.

"I think Amazon doesn't feel like they need the channel. Customers are just coming to them for business," said one solution provider executive that asked not to be named.

[Related: AWS Propels Amazon To Another Profitable Quarter]

"I don't honestly think that Amazon's size will open the door for more partnership," Jim Suss, co-founder and president of LAM Technology, a Fort Worth, Texas-based solution provider. "When you're one of the biggest companies, many times you learn quickly that you don't need to partner with anyone," Suss said.

Even if hyperscale cloud providers aren't seen as channel-friendly, they do deliver popular services, and solution providers will need to adapt and find ways to work with them.

"Many times, we are working with a company that already knows what cloud provider they want to go with, but they don't even know if it's the right fit," Suss said.

The opportunity around these hyperscale cloud services, such as AWS and Azure, lies in providing connectivity to the cloud and support services wrapped around popular cloud offerings, according to the anonymous solution provider.

"We can navigate all the different options for customers, like private, public, and hybrid, regardless of who the cloud provider is, and then add support around the public cloud players, such as AWS and Azure," the executive said.

LAM Technologies, which got its start selling connectivity, now includes cloud services as a big part of its portfolio. Suss said that his company has been working with more channel-friendly cloud providers that can ensure high-quality services for end customers, compared to cloud computing giants don't, in his estimation, appear to be as focused on customer service.

That presents an opportunity for more channel-centric cloud players, like Rackspace and RapidScale. "We want to be a part of cloud conversations," the anonymous solution provider executive said. "If we hear the customer say something that makes a more channel-friendly cloud provider a viable option, we'll make that connection."

In the meantime, the solution provider executive is "hopeful, but unsure" if Amazon will someday give partners more access to sell its cloud services.

Amazon reported its Q3 2017 earnings in November and the company said that AWS generated $1.17 billion in revenue for the quarter.

Morgan Stanley's Nowak wrote that Amazon's stock price could reach $2,000 per share by the end of 2018.