AWS CEO Andy Jassy’s ‘Very Ambitious Plan’ To Keep AWS On Top
AWS CEO Andy Jassy aims to keep the cloud giant at the top of the computing pyramid by adding more technology services, lowering costs for customers, and expanding its commitment to the company’s fast-growing AWS Partner Network.
Amazon Web Services CEO Andy Jassy is ready to take the 65,000 partners and customers set to converge on Las Vegas for AWS re:Invent 2019 on a journey into the future of cloud computing. It’s a future that is taking shape under the steady hand of Jassy, who has done more than any single individual in the past 15 years to make the transformative cloud technology a reality.
Jassy’s cloud computing vision -- powered by a relentless focus on listening to customers -- is forever trained on providing the most cutting-edge services at the lowest prices possible.
That means delivering everything from additional networking capabilities for the mainstay Amazon Elastic Compute Cloud (EC2) to new features for the fast-growing AWS Fargate container offering. It also includes the next generation of AWS Lambda serverless capabilities and new functionality for emerging technologies such as purpose-built databases and robotics.
“That’s a very small portion of what you’ll hear from us at re:Invent and over 2020,” Jassy told CRN in an October interview at AWS’ Seattle headquarters. “We have a plan that is very ambitious over the next few years. You can look at every area you can imagine.”
That ability to imagine the future and keep focused on driving innovation is what has allowed Jassy -- the founding father of AWS -- to build a nearly $36 billion, industry-leading cloud computing powerhouse with 165 services. Almost 14 years after AWS’ launch, Jassy remains focused on continuing to scale the cloud platform under its core tenet of “customer obsession.” With that, the technology gap is widening between AWS and competitors Microsoft Azure and Google Cloud.
“We often say ‘there’s no compression algorithm for experience,’” Jassy said. “You can’t learn the lessons you have to learn until you get to those different elbows of the curve and scale and experience what happens. With a business that’s significantly larger than the next few combined, it’s just harder for those companies to have learned some of those lessons until they get to that scale.”
Jassy plans to keep AWS at the top of the computing pyramid by “iterating at a faster clip than anybody” and adding ever more technology services and functionality, continuing to pass on cost savings to customers -- AWS has lowered prices 75 times since its 2006 launch, “largely in the absence of competitive pressure to do so” -- and expanding its AWS Partner Network (APN) commitment with offerings that include a new startup program.
In a wide-ranging, 45-minute interview in a conference room in AWS’ new $650 million re:Invent building, Jassy spoke about everything from AWS’ hybrid cloud charge with AWS Outposts, to next-generation technology such as machine learning and serverless computing that will drive big partner opportunities, to competitors such as Oracle.
AWS And Its Partner Allegiance
Partners have helped AWS keep its firm grip on first place among public cloud providers with a commanding 39 percent share of the Infrastructure-as-a-Service and Platform-as-aService markets, up from 38 percent five years ago, according to Synergy Research Group. Microsoft follows with a distant 19 percent share, more than triple its 6 percent share in 2014, while Google trails in the No. 3 spot at 9 percent, up from 2 percent in 2014.
“Our partner ecosystem is not somehow like a side project with a very small amount of our total business,” Jassy said. “Really from the very start of AWS, but particularly so in the last five years, [it] has continued to become a very significant part of our AWS business, and it’s super strategic and important to us.”
AWS doesn’t disclose how much of its revenue is driven by the APN or its size, other than “tens of thousands” of consulting and technology partners, but acknowledged the network has grown more than 400 percent in the past five years. AWS Marketplace, AWS’ digital catalog of third-party software, has 5,200-plus offerings from more than 1,400 independent software vendors (ISVs). “Partners in our ecosystem have been a giant part of customer success in moving to the cloud,” Jassy said. “It’s both the many thousands of ISVs and SaaS [Software-as-a-Service] providers who’ve built their businesses and made their technology and software work on top of AWS as a technology infrastructure platform, as well as the thousands of systems integrators [SIs] and consulting partners who are helping companies move thoughtfully to the cloud.”
And new AWS channel chief Doug Yeum said Jassy is “100 percent committed” to continue growing the APN and ensuring partners flourish, as evidenced by his time spent with them.
“The CEOs of large partners or small partners ask for his time, and he’s always very open to make time for them because he understands the value that the partners bring to us,” said Yeum, who was Jassy’s chief of staff before his current role as AWS’ head of worldwide channels and alliances.
AWS expects to open the door for new partner opportunities with AWS Outposts, its hybrid bid to extend its native cloud infrastructure into customers’ data centers for the first time with its own rack server hardware product -- a move that perhaps would have been heresy in AWS’ early days.
Jassy says Outposts -- set to ship by year’s end -- will serve as a transitional offering for ISVs’ and SaaS providers’ customers that started on premises and are migrating their workloads to the AWS cloud.
“They find Outposts attractive for them when they have customers who … either need to leave part of those workloads on premises for a long period of time or just an interim period where they can use Outposts to do that bridging,” he said. “It’s certainly an important part of taking their customers on the journey.”
AWS plans to eventually allow partners to embed their software directly on the platform, according to Jassy.
“Over time, I think you can expect that we will find ways to bundle our strategic partners’ software on Outposts,” he said.
While AWS technical personnel initially will handle installations and maintenance for AWS Outposts’ compute-and-storage data center racks, partners are expected to be able to provide those services in the future.
“Eventually we expect to engage with partners to perform these functions as we refine our customer experience to the point where we are comfortable that partners can replicate it,” an AWS spokesperson said.
Stephen Garden, CEO of cloud-native solution provider Onica, which is in the process of being acquired by Rackspace, sees Outposts appealing to Fortune 100 companies with delicate systems that generate billions of dollars in revenue. Those companies have made big investments in data centers that still have a significant amount of unused capacity, he said.
“The word ‘hybrid’ was not really talked about much in the early phase of cloud, but we’re starting to see the second wave of what we call ‘modern hybrid,’ where customers need to cloud-ready themselves, but don’t necessarily move to the cloud immediately,” said Garden, whose Santa Monica, Calif., company is an AWS Premier Consulting Partner and Managed Service Provider. “They start leveraging some cloud-best practices in that hybrid fashion, while they eventually take a more transitioned approach.”
In another nod to the power of the hybrid computing model in corporate America, AWS also is introducing ingress routing for third-party appliances, including advanced firewalls and other security and networking services, sold on AWS Marketplace. Ingress routing will make it easier for customers to direct traffic entering an AWS virtual private cloud to those appliances prior to reaching its final destinations.
Technology Innovation Fueling Partners’ Growth
Onica’s relationship with AWS has been driven by such technology innovation, according to Garden. The company has focused on AWS exclusively since its start because AWS has continued to innovate and add tons of new platform features that help Onica provide more value to customers, he said. In five years, AWS has helped build Onica’s overall business to nearly $200 million in annual revenue and 400 North American employees.
“We’ve been given great access for our technologists to understand their product road map, to be able to contribute to how these solutions that they’re building are the next generations of EC2 and things like that,” Garden said. “We feel like we’ve been able to shape how these products have been matured.”
Garden’s APN experience is markedly different from traditional partner channel models of his pre-cloud days, he said.
“It’s not really about things like deal kickbacks and registrations, marketing credit,” Garden said. “It’s something close to what I would describe as an entrepreneurial boot camp. Amazon’s got … possibly the most well-scaled entrepreneurial culture I’ve ever seen, and that’s definitely rubbed off and influenced how we’ve grown and built the business.”
That AWS culture also has fueled big sales growth at Seattle-based Slalom, an AWS Premier Consulting Partner singled out by Jassy as among a “new generation” of SIs that have embraced the cloud without fear of alienating legacy vendors.
“[They’re] carrying a lot of the new market segment share for companies moving to the cloud,” Jassy said. “These are companies that ... don’t have the legacy where they have to worry about cannibalizing existing businesses. They aren’t worried about hedging their bets across every imaginable partner. They’re going deep in training and certifying their people in the cloud and on AWS.”
Slalom CEO Brad Jackson said AWS is Slalom’s No. 1 technology partnership among 300 vendors. A $1.8 billion company with 7,600 employees, Slalom has been working with AWS since 2008 and has more than 1,100 AWS certifications and 10 competencies.
“Right now, 18 percent of our [total revenue] is involved with AWS,” Jackson said. “Of the work that we do across all cloud platforms, it’s 80 percent.”
Jackson rates AWS’ partner commitment as “stellar.”
“One of our senior leaders expressed a concern … to another partner recently that was very urgent,” he said. “That was six weeks ago, and we haven’t heard back. With AWS, with most of their leaders ... the average response time is about three hours. They have been spectacular in embracing partners and being successful in building their own professional services organization, and [there’s a] lot of harmony in those organizations working together.”
Where New Partners Should Be Investing
New SI partners seeking to build their businesses around AWS should look to the very large number of enterprises and government entities that want to make mass migrations to the cloud, according to Jassy.
“Building a practice around modernization and mass migration is a giant opportunity,” he said. “They need help thinking through the sequence in which they should move. They need help thinking through which applications should be lifted and shifted, and which should be rearchitected before they move to the cloud. They need help setting up the landing zone. They need help setting up a data lake. There’s just not enough qualified people to help with the demand that’s there.”
Databases are ripe for SIs to capitalize on, with AWS increasingly seeing customers wanting to move away from “old-guard” Oracle and SQL Server databases to less expensive and proprietary options with reduced lock-in that don’t have punitive licensing terms, Jassy said.
“There’s so many customers who are trying to move to Aurora, which is our database engine that … is fully compatible with both MySQL and Postgres,” he said.
Analytics and machine learning are “exploding” and very often are net-new workloads for enterprises and governments.
“It’s kind of amazing how many thousands of companies are standardizing now on top of SageMaker because it’s so much easier to build machine-learning models,” Jassy said.
Edge computing also is a wide-open area for partners to help companies realize value from the billions of Internet of Things (IoT) devices that will be in homes, factories, trains, planes, ships and oil and agricultural fields, according to Jassy.
Serverless computing is another exploitable technology, and AWS already has about 20,000-plus SIs building serverless products and capabilities.
“This next generation of companies are going to grow up thinking serverless first, as opposed to having to deal with the server in the cluster level,” Jassy said. “If you’re not starting to build a practice that is deep and understands how to help companies leverage serverless as a partner, you’re going to be in trouble.”
And customers will be hungry for thoughtful, useful security capabilities for a very long time, according to Jassy.
“Just think about some of the challenges that IoT presents to security and think about some of the challenges that machine learning can present,” he said. “Look at robotics, which is another really important up-and-coming area. There’s a different set of concerns -- different control plane, different surface area, different layers of interaction.”
ISVs and SaaS providers, meanwhile, are “only gated by your imagination” when it comes to successfully building businesses around AWS, Jassy said.
It’s Still ‘Early Days’ For The Cloud
It’s evident Jassy has his hands in all aspects of AWS -- to a level that likely would surprise most observers, according to Brian Matsubara, who founded and ran AWS’ global technology partner team during his seven years there starting in 2009.
“I’ve been in a number of business reviews, product reviews, sales strategy reviews with Andy where he wanted to know the details of everything that we were doing,” said Matsubara, now senior director of global technology alliances at Tableau Software, a Seattle analytics platform company and AWS Advanced Technology Partner. “He also will put a lot of pressure and emphasis on the product teams to say, ‘Hey, if we’re going to launch this new service, what’s the partner strategy around it? How do we make sure that this is going to help our partners, not hurt our partners? How do we make sure that our sellers are incented and motivated to support partners versus disintermediating partners?’”
Jassy sees that symbiotic partner relationship continuing with the next wave of enterprise and public sector cloud adoption.
“It’s still unbelievably early days,” he said. “There is so much opportunity for all of us if we can make sure that we get deep in the cloud and in the services [and] … prioritize customers being successful over the long term over any short-term gain.”
As for whether AWS can maintain its dominant market position, Jassy likes the odds.
“We remain very optimistic that we will continue to be the significant leader,” Jassy said. “The combination of our having a lot more functionality and much larger, more vibrant partner ecosystem and much more maturity in the offering are significant differences today.”