The all new AWS managed services forces important buyer and partner decisions

Profile picture for user kmarko By Kurt Marko December 15, 2016
Summary:
Kurt Marko pores over the new AWS managed services announcement, warning that both buyers and partners need to pay attention to the detail of what's on offer before jumping into bed with Amazon.

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Earlier this week, AWS declared that it is entering the managed services business with an offering designed to bootstrap cloud adoption among the largest organizations.

The company says it has been working on the service for the past couple years with select enterprise customers and partners helping it to build a service that simplifies deployments, migration and ongoing management using a new set of automation tools and APIs.

Although the new AWS Managed Services (MS) makes perfect sense given the complexity faced by large organizations migrating application and data to the cloud, it seems to duplicate offerings already provided by AWS's stable of managed service partners such as 2nd Watch, 8kMiles and Accenture.

AWS could also end up competing with influential cloud brokerage services from IBM and Rackspace, which has morphed from IaaS into an MSP to avoid direct competition with AWS. Indeed, the news is unexpected given the company's outward enthusiasm at the global partner summit that coincided with re:Invent where AWS executives exhorted partners to be bold and innovative in helping customers adopt AWS infrastructure and even honored Rackspace for certifying more than 500 of its employees on AWS technologies.

The announcement seems like further evidence of a point made in my last column about the strategic similarities between AWS and its parent, Amazon: neither is content ceding any business niche to others.  However, for now, AWS is positioning MS as a necessary and useful addition to existing management tools and taking pains to point out that the service is designed to supplement, not replace existing partner offerings.

Service highlights

According to a blog post,

AWS MS is built around the concept of a Virtual Data Center that is linked to one or more AWS accounts. The VDC consists of a Virtual Private Cloud (VPC) which contains multiple Deployment Groups which consist of Multi-AZ subnets for a DMZ, shared services, and for customer applications. Each application or application component is packaged up into a Managed Stack.

The new AWS offering includes features expected of any enterprise management service including: event monitoring, incident response, provisioning, change and patch management, identity and security policy control, data backup and restoration, usage reports and financial tracking. Although this reads like a standalone feature set that AWS deliver itself, the product announcement stresses that

AWS Managed Services was designed with partners in mind. We have set up a pair of new training programs (AWS MS Business Essentials and AWS MS Technical Essentials) that will provide partners with the background information needed to start building a practice around AWS MS. I expect partners to help their customers connect their existing IT Service Management (ITSM) systems, processes, and tools to AWS MS, assist with the on-boarding process, and manage the migration of applications. There are also opportunities for partners to use AWS MS to provide even better levels of support and service to customers.

Indeed, AWS quotes a premier partner that welcomes the product as something

...where the heavy lifting of management and control can be outsourced to AWS.

My take

Be careful what you wish for.

AWS partners may see MS as filling holes in the existing AWS management suite that will allow them to outsource and automate operational duties while focusing on more strategic consulting, integration, migration and development services.

However those same partners shouldn't assume that getting closer to their customers insulates them from future competition from the cloud giant. While the service is initially designed for sophisticated cloud users, either large enterprises with DIY management processes or smaller organizations using partners, as we've seen with so many AWS services, the company relentlessly refines and augments products until they are good enough to displace previously off-limits competitors.

AWS appears to be pushing partners to be more like developers and less focused on their traditional role as managed service providers. Listen to AWS CEO Andy Jassy at the partner summit,

The partners who will be the most successful are the ones who can keep pace with the innovation. We encourage you to learn about what we are doing and figure out a smart way to build capabilities into your own offerings that will benefit customers.

Jassy goes on to caution partners about "hedging your cloud strategy," saying that the most successful will be the AWS masters that best understand the platform and how to use it to build custom products and services for their customers.

The AWS strategy is clear:

  1. avoid IaaS commodification that could turn partners into service brokers by expanding its platform application and management features
  2. push partners up the IT value chain from operations and migration to business consulting and development.

Such positioning creates tension between organizations that want to avoid cloud lock-in and develop multiple sources for cloud services and their IT partners that are incentivized to create tailored services that rely upon the nuances of a particular cloud provider. Like all coopetition situations, it will be interesting to watch since these scenarios are inherently unstable. For AWS partners, the ramifications are potentially existential, while cloud buyers must evaluate the tradeoffs between features and flexibility.