Recently, in a blog post, Amazon announced on its website that its AWS division would be launching a managed services offering. This offering will be aimed at enterprise customers who are interested in adopting Amazon's cloud infrastructure. Specifically, the Fortune 1000 and the Global 2000 are the prime customers here and the purpose of the launch is to "accelerate cloud adoption."
The managed services offered will include the following: Incident Monitoring & Resolution; Change Control; Provisioning; Patch Management; Security & Access Management; Backup & Restore; and Reporting.
Should MSPs Be Worried?
The short answer is yes, MSPs probably should be worried. While the vast majority of the MSP channel does not focus on the Fortune 1000 or Global 2000 customer base, there is a sizable number of MSPs who do serve this customer profile. These larger and more mature MSPs will be facing direct competition from Amazon's managed service.
The small- and medium-business-focused MSP probably doesn't have anything to worry about since the customers are just not similar.
But, if you are a student of history in the channel, you will see plenty of examples of channel conflict involving vendors who used managed services to go after customers directly.
What Do MSPs Gain From This?
If you ask the average MSP about Amazon AWS, you can expect to hear a variety of benefits for why those MSPs have adopted the AWS platform. Low cost, flexibility, and power are just some of the reasons MSPs use AWS.
However, MSPs should evaluate every partnership they enter to ensure that it furthers their strategic purpose and protects their customers from predatory practices.
When I see MSPs who outsource the very core elements of their managed services to another entity it makes me wonder what purpose and value they really serve.
Imagine for a moment this AWS offering was aimed at customers of all sizes. Would MSPs continue to use AWS? Would MSPs risk having their customers siphoned off to Amazon?
"My View" guest columns provide the opportunity for writers to air their views on a range of topics.
I am not saying the Amazon AWS managed services news is bad for MSPs. It makes a lot of sense, just like it made a lot of sense for companies such as Microsoft, Cisco, and Dell to begin offering managed services. What I don't understand or encourage is working with companies that are competitive to you. That, in my opinion, is a bad business decision.
The mid-market and enterprise MSP community now has very little reason to partner with Amazon. Why would they? The competition is too close for comfort. Amazon's claim that this program was built with partners in mind does not address the core issue for MSPs, which is why get into the managed services profession only to partner with a company who wants to take over the very thing you do?
Channel Evolution or Predatory Behavior?
The idea that the IT channel evolves by taking over by having vendors perform the managed services and the MSPs only resell is very natural for vendors to grasp. In fact, it is how many vendors tend to look at the channel. MSPs for over a decade have resisted the call to go back to being resellers. The reason they left the VAR business model was because it was a failing model. Managed services offered a new way to do business.
Amazon's AWS managed services offering is not a bad thing for Amazon. I get why they are doing it. How MSPs respond to this move and whether they continue to invest in Amazon as a strategic partner is what we don't know.
If you think my analysis is off or have questions, I'd love to hear from you.
This My View column is authored by Charles Weaver, who is CEO of the International Association of Cloud & Managed Service Providers (http://mspalliance.com), a consortium of MSPs that was established in 2000 and today has more than 25,000 cloud computing and managed service provider corporate members across the globe.