Deloitte Consulting ‘Doubling Down’ On $750M AWS Business

‘The go-to-market globally was around $750 million last year,’ says Jonathan Bauer, Deloitte Consulting’s AWS alliance leader. ‘We have aspirations of doubling and tripling that over the course of the next few years.’

Deloitte Consulting’s Amazon Web Services practice has grown to an approximately $750 million business in its four-year partnership with the industry’s top cloud computing provider, and there’s plans to double – and even triple – that in the next few years.

“We are doubling down with AWS,” said Jonathan Bauer, a principal at Deloitte Consulting and, for the last three years, its alliance leader for AWS, directing the firm’s U.S. go-to-market activity. “We have aspirations of doubling and tripling that over the course of the next few years.”

As an AWS Premier Consulting Partner, the scope of Deloitte’s work with AWS centers on areas including SAP on AWS, industry-specific solutions, modernization and security.

“One of our legacy strengths in the firm is our go-to-market around industry, and this is a place where we are truly able to differentiate, and that has proven successful time over time,” said Bauer, who previously led Deloitte’s alliance portfolio and telecom industry practice.

In an approximately 45-minute interview with CRN this month, Bauer talked in detail about Deloitte’s largest cloud partnership, from special projects and possible future areas of collaboration to the benefits of AWS over competitors Microsoft Azure and Google Cloud. He also detailed Deloitte’s work during the coronavirus pandemic – which included leveraging Amazon Connect, AWS’ cloud customer contact center – and talked about the U.S. Department of Defense’s award of the potentially $10 billion JEDI (Joint Enterprise Defense Infrastructure) contract to Microsoft.

“The demand for cloud continues to grow at an amazing rate, and we continue to invest strongly in getting our people trained and certified and available to serve our clients in the market,” Bauer told CRN. “It‘s a very important statistic that a lot of our clients care about. I’m not sure you can ever have enough people that are actually certified.”

Bauer noted that a recent Deloitte-authored booklet focused on why every executive in every corporation cares about cloud, whether it’s a chief learning officer, chief financial officer, risk officer or a security team.

“The board cares just because of the threats that startups can now start up so much more quickly than they used to be able to do,” Bauer said. “Everybody cares about the cloud, and so having our own team ready to face off regardless of who the executive is to have that conversation is really important. And we continue to have aggressive plans in place to continue educating and growing our own capabilities.”

Here is an edited version of CRN’s interview with Bauer.

When I interviewed Tom Galizia, Deloitte’s lead commercial partner for its Alphabet/Google alliance, he said he expected the Google practice to be Deloitte's fastest growing billion-dollar business. Where does Deloitte's AWS practice stand?

It‘s a friendly competition between the two. All three (major cloud providers) are very important. Last year, we were the fourth largest (practice) in the firm when you start including SAP, Oracle, Salesforce. We may have been five. Of the cloud service providers, AWS is the largest alliance that we have of those three.

The go-to market globally was around $750 million last year, and we had planned for shrinkage this year. Actually, the firm overall is doing very well based on what we had planned to have happen with the current COVID situation. We‘re tracking ahead of where we were last year, which is awesome news.

(The Google practice) is still growing very quickly. Whether he‘s fastest or I’m fastest, I’m not sure. We are, historically -- AWS has thousands of partners -- …one of their fastest growing partners ever, because we signed our agreements with them four years ago. So from zero to that ($750 million) point in four years -- it was a pretty fast start.

Globally, we‘re probably pushing 7,000 to 10,000 (people in Deloitte’s AWS practice). That includes our offshore capabilities. We also have onshore delivery centers, where -- unlike the core consulting staff -- there is no expectation that they travel to client sites and things like that. We call them delivery centers here in the U.S., which are 98 percent technology. But across all of that, there are many thousands of people globally focused on cloud and AWS.

What are your growth aspirations for AWS?

We are doubling down with AWS. We have aspirations of doubling and tripling that over the course of the next few years. Obviously, this year is sort of this wild card. Nobody exactly knows how this is going to play out. But the initial response to our client base is that it‘s actually accelerated. In some cases, it accelerated the conversation about cloud, but in many cases also accelerated the move to cloud. It’s hard to predict right now, just because it’s such unusual times, but we have aspirations of double-triple.

What's the scope of Deloitte's work with AWS? Are there certain areas that you concentrate on and certain types of customers?

In the AWS terminology, it‘s enterprise, strategic and globals -- the (companies with) $2 billion-$3 billion and up in revenue. That’s sort of the sweet spot where the two of us come together.

As far as focus areas, we have five or six campaigns that we‘re pursuing globally. One is around SAP on AWS. The SAP workload is, obviously, hugely important to many clients globally. I was told probably about a month ago, within the U.S., Deloitte had migrated the most workloads for this calendar year on AWS of all of their partners.

We focus on specific industry solutions being ported to AWS. An example of that would be Guidewire, which is an insurance platform. We have a solution called InsurCloud, which is not only the porting of Guidewire, but it‘s also wrapping other cloud-native services around the application to bring additional value to the client. We are also one of the first partners to look at porting Epic onto AWS in the healthcare space. We have a couple of proofs of concept already completed in production with them, with aspirations to sort of build out a larger footprint of the Epic platform.

Number three would be modernization, and it sort of has two flavors. One is a lot of people talk about migration. We don‘t. We talk about modernization as opposed to simply migration. Migration is just moving the workload. Moving the workload by itself is not necessarily a successful venture for our clients. There are many other things that should go along with that in the way that they manage business, the move to DevOps, looking at their talent to make sure that they have the right people on board to manage and support cloud applications versus the on-prem applications.

The other flavor of that is specifically in the data world -- so the data warehouses, data marts. Many enterprises have hundreds of data warehouses and data marts. In some cases, there are multiple versions of truth within a single company, which can be very difficult to manage. And so part of the charge of data modernization is getting our arms around all of that and bringing it into the AWS world. (Amazon) Aurora (an AWS relational database), is…their fastest-growing service. That sort of sits at the core of all of that, because they‘ve seen such an interest. That’s such a big challenge for so many companies.

We have one specifically around security, because that is important to everybody that is moving to cloud. And then the last, and by no means least, is around industry solutions. Our definition of solution is it‘s a software asset. It’s not a product, like you download it and click “install.” It’s a significant, relevant software asset that we use as sort of a jumpstart -- as an accelerator -- to address big industry problems. We built these solutions across several sectors: public sector, life sciences, healthcare with Epic. We’ve done some in financial services. In many cases, we build them with AWS. They contribute to the development of the solution and then…we will jointly market as well.

What do you see as AWS' biggest strengths, and has that been changing in relation to Microsoft Azure and Google Cloud?

I‘d say it’s two or three things. The first one would be just the years that they’ve been in the business. They’ve been out there 12-plus years now. They have the broadest and most mature toolset that is out there across the services. Their security tools are top-of-the-heap. Their market share is still more than the next two combined. Their other strength -- which is very aligned with Deloitte (and) one of the reasons that our partnership has moved so quickly -- is they have their (14) core values, and customer obsession is one of them, if not the No. 1 value that they espouse. And for us, we talk about delivering value for the customer, so it’s very, very similar alignment to what we want to bring.

They continue to innovate. In fact, they will run workshops for their clients or for new or potential clients on their innovation methodology. I‘ve actually been in a couple of those with AWS, which they refer to as their “working backwards” method. That has a real appeal and interest to clients, because…both Amazon’s and AWS’ innovation track record is incredibly impressive. And they bring to their clients the same processes and methods that they use internally to direct their own innovation.

How does AWS compete against Azure and Google Cloud on pricing?

I‘m obviously most familiar with AWS pricing. What I can tell you is that...when I took this job a few years ago, I learned in the first year that AWS actually has a challenge out to itself to reduce price by x percent over the entire bundle of all services -- so across all approximately 200 services -- to reduce price overall to its customers. Frugality is another one of their core principles. They imposed that upon themselves, meaning the way they operate internally. Then they also take it to heart in always trying to optimize on the client’s behalf the cost of their services. So I know AWS makes significant investments -- as probably all the hyper-scalers do -- on working with clients to deploy their platform.

Are you working on any special projects with AWS now that you can tell us about?

For us, special projects tend to be solution-based, so it‘s things that we’re doing jointly for our customers.

One of the great value-ads that companies get by moving to the cloud is not only can those workloads probably run maybe a little faster, maybe a little more efficient, maybe a little cheaper. But you now have it on a platform, so that you can start integrating the machine learning services with that platform, so that companies can start either getting at datasets that used to be so large that they couldn‘t effectively get at them, or start doing things that they couldn’t previously do, because there weren’t on-prem solutions.

An example of that is with Connect. With a Fortune 500 client, we have taken the Connect platform and done extremely deep integration with some of their voice-to-text and related services. As opposed to, you dial in and it says “hit three” for this, ”hit four” for that and ”hit five” for that, that actually drives two- or three-minute conversations with a customer without having human interference. If you talk to most companies…70 (percent) to 80 percent of the calls are pretty traditional calls, like, ”My bill is due, could I have an extension to my payment? Or I know my bill was due yesterday, I wanted you to know that I just mailed it in.” Most of the call traffic is around a standard set of questions and topics. So it‘s using their voice services to actually drive those conversations without humans being on the phone, so they don’t have to wait, you don’t have to queue up. If all of a sudden something happened, and 2,000 people call up in the same moment, the platform scales. It reduces wait time, and if there’s a point in the conversation where you need a human, you zero out, and the human is attached to the call. So to integrate Connect with these services is extremely powerful.

We continue to work in converged health, which is in our life sciences space. It‘s a very well-documented platform (ConvergeHEALTHConnect). It’s been out in the public domain for a couple of years. We’ve done some co-development with AWS around it. AWS launched Data Exchange (designed to makes it easy to find, subscribe to and use third-party data in the cloud) last year, which was a new service. We were intimately involved in the launch of that service, which we’re very proud of. We worked with AWS in the formation of the product.

We continue to work on solutions around Industry 4.0, smart factory, IoT and smart cities. This is where we invest our time and our human capital in working with AWS.

What's next between Deloitte and AWS?

We continue to look for areas where we can co-develop different capabilities, which may become services. AWS continues to expand globally. We sort of move ourselves globally around with them and try to scale capability as they start deploying to different parts of the world. We activate our own customer base in those parts of the world.

When we established the alliance, we set it up as an AWS alliance. Well, Amazon is comprised of 20-plus companies. They have Alexa, which is a different business unit, Whole Foods, Twitch -- you can go through the list. They have their own marketing cloud platform now, which we have done some very early work with them on. They‘re obviously later to the game than the Google platform and the Adobe platform, so it’s sort of like how do they make a name for themselves. But they already have a number of clients they are working with, so our marketing group has been in conversations with them.

They‘re all valuable businesses standalone, but when you think about what can we do to sort of integrate some of them...bring some of them together, is something that we are looking at very aggressively.

Have you‘ve been in an Amazon Go store -- the food mart? They’ve got sandwiches and drinks, snacks. You scan yourself in with your Amazon Prime account…pick up whatever food you want and simply walk out. The store has tracked what you have picked up in the store. If you think about deploying that technology in sports stadiums, obviously, you’d have to redesign food service in a stadium. But there’s always these enormous lines. If somebody could just sort of come in, pick up three hotdogs, three things of fries and two soft drinks and just turn around and walk out. So how do take those services, start integrating it with other capabilities. Or, while you’re at your seat, you use Alexa. If it’s in the seats of a stadium, can you start ordering food from your stadium chair? So ideas like this -- of bringing the various services together from the various businesses -- that is something that we talk with them frequently about, and those conversations continue to move forward.

We‘ve done a bunch of work with (a U.S.-based multinational hospitality company) integrating Alexa.

Are there any recent AWS product or service releases that are generating some buzz among your customers, or is it more up to Deloitte to point them out?

The one that I think has got…intrigue was the launch of (AWS) Ground Station, which is within their satellite group. So today, a company has a satellite array up there, they can use Ground Station for managing uplink and downlink. It‘s an intriguing conversation. There’s a group of enterprises out there that need a new satellite technology (including providing) access to people in very remote locations. There are a bunch of use cases. There’s a lot of clients that need satellite capabilities, satellite service, and I think it’s an interesting question as to how they will expand Ground Station. AWS could provision their own satellite array to support their customer needs. And then, sort of like today’s cloud…they start providing satellite, and companies can start buying service of an AWS satellite array. In talking with colleagues and other people in the industry, that is something that people are watching a little bit.

What have been Deloitte customers' biggest coronavirus pandemic-related challenges?

COVID continues to be fascinating. I sort of break it into two or three buckets. One of the buckets would be, both within government and within commercial enterprise, the need for “contact centers” -- like we need it immediately. And it‘s not for the traditional contact center. It’s not like you’re calling up your favorite utility and saying, ”Hey, I’ve got an issue with my bill.” With the remote work, with the need for some people to procure home office equipment, many employees had no idea what policy was for their company around can they expense this stuff. Should we go to a certain location to buy stuff for our home office? There were questions about what happens if we’re furloughed, what happens to insurance and things of that nature -- all sorts of reasons for employees to have questions. They needed to stand these contact centers up literally overnight.

(Deloitte uses) Amazon Connect, call center as a service. We do a lot of work with that service globally. We think there‘s a huge demand for Connect coming over the next several years.

One of the things that we‘re pretty proud of is that we have a 48-hour turnaround on standing up contact centers. We’ve done it both in commercial and for many state governments. But these were somewhat MVP (minimal viable product), as you would expect. It’s not the full-feature functionality of many contact centers, but it was enough to allow employees and people to call in depending upon what the use case was. The key here it was done within literally two days.

The second category of work was around unemployment systems. In many states…they were never built to handle the scale of the demand that hit them all of a sudden. We built sort of front ends that went on top of their unemployment systems. We built periodic integrations into the back end, so that states could handle the volumes of people calling in. We did that type of work for several states. And then the other related eligibility programs -- we do integrated eligibility work within our public sector practice in just over 30 states, so we have a very large footprint there.

We‘ve actually ported our integrated eligibility platform onto AWS. The first go-live was at the end of last calendar year. We’re now doing that work in a couple of other states. COVID started driving the need for many other services like food stamps or child services. Not only was it a volume issue, but we also worked with the states to create some chat bots to more efficiently direct traffic based on the type of eligibility people were calling in for. That was a lot of engagement with the states.

The last the demand for remote workforces and the AWS toolkit that supports it. Many companies...didn‘t have remote work. In other cases, it was 5 (percent) five to 10 percent of the workforce at any point in time working remotely when, all of a sudden, it could be at 95-plus percent. So how do you handle security of datasets that are flying over the line, how do you provision remote workplaces and things of that nature?

From a human capital perspective, managers and many companies were used to seeing their entire teams sitting in the building, and they sort of managed with everybody there -- sort of visual. All of a sudden, everybody is remote. And so how do you manage that workforce? It‘s not a technology problem, but it’s one that is intimately attached to deploying your workforce remotely.

Did Deloitte stand to benefit from an AWS JEDI contract, and do you have any comment on the DoD’s recent decision to award the potentially $10 billion contract to Microsoft?

We‘ve been working with AWS in the DoD for a bunch of years, before JEDI was really formalized. Was I surprised when I heard it? I wasn’t expecting it. Was I surprised that a major competitor came in and made a bold and aggressive move? No, I mean that happens a lot. That’s the nature of the beast. Azure is a strong platform.