In-Depth
Juggling Act: How Partners Are Selling Both AWS and Azure
Channel firms are increasingly seeing the benefits of partnering with both Amazon and Microsoft on cloud services, but doing so requires a good deal of training, planning and trust.
With more and more businesses transitioning their operations to the cloud, the benefits of supporting multiple cloud providers -- namely, market leaders Amazon Web Services Inc. (AWS) and Microsoft -- are becoming increasingly evident to channel partners.
A growing percentage of partners' customers are demanding multi-cloud environments, and many partners are following suit, offering migration, management and support services for each of the leading platforms.
But juggling a relationship with Microsoft and AWS is no easy task. We asked a few partners about the benefits and potential hazards of playing both sides.
Multi-Cloud Makes Business-Sense
Amazon's lead in the public cloud arena -- and Microsoft's position as its closest, if distant, competitor -- has been documented in many studies. One of these is the RightScale Inc. 2016 "State of the Cloud Report," which surveyed more than 1,000 organizations -- about 400 enterprises (companies with more than 1,000 employees) and 600 small to midsize businesses (SMBs). Among enterprises, RightScale found AWS to have a share of 56 percent, compared to Microsoft Azure's 26 percent. In smaller organizations, the difference is even more pronounced: 58 percent for AWS and 15 percent for Azure.
Given its more entrenched position and market leadership, the attraction to AWS from a Microsoft cloud partner's standpoint is undeniable: Where there is customer demand, partner opportunity follows.
Softchoice Corp. is one Microsoft partner that has jumped on the AWS bandwagon. The Toronto-based solution provider has a long history with Microsoft. It's the top Microsoft partner in Canada in terms of sales, and the top Microsoft partner in the United States in terms of year-over-year Azure growth. It holds the vaunted designation of Microsoft Licensing Solution Provider (LSP), is a member of the Cloud Solution Provider (CSP) program and carries multiple Microsoft Partner Network (MPN) gold competencies.
"It's no secret that Amazon is the market share leader. But it's also no secret that Microsoft has strong enterprise relationships, just through -- it's just Microsoft."
Rob Lancaster, Vice President, Global Alliances, Cloud Technology Partners
Nevertheless, the company decided about three years ago to extend its scope and become an AWS reseller, a decision driven by growing demand among its customers for services centered around the market-leading cloud platform.
"We had just anecdotally heard from our customers that they were either considering or already using the Amazon platform for some of their workloads, so we decided at that point that it would make sense for us ... to be able to build a business around [AWS]," says Brett Gillett, AWS practice lead at Softchoice.
On the other hand, though it still lags behind AWS, Microsoft has done a yeoman's job in recent years of boosting its Azure platform to prominence, with rapid-fire technology updates and an ever-expanding roster of services.
"It's no secret that Amazon is the market share leader. But it's also no secret that Microsoft has strong enterprise relationships, just through -- it's just Microsoft," says Rob Lancaster, vice president of global alliances at Cloud Technology Partners (CTP), a professional IT services firm based in Boston, Mass. "And it's certainly a viable option in the enterprise just due to the penetration that Microsoft has and the existing relationships that it's got within that customer segment."
For that reason, CTP, which has been a Premier Consulting Partner with the AWS Partner Network (APN) for about three years now, joined the MPN in late 2015, eventually earning a silver Cloud Platform competency.
"We've been doing AWS for a lot longer than Azure. We have a more established practice there. But the reason we took on Azure late last year ... is because we're seeing demand for it in our customer base," Lancaster says.
In fact, many partners that started out with AWS-centric portfolios have seen an uptick in Azure demand, and have begun adjusting their offerings accordingly. One of those is Datapipe Inc., a cloud hosting services provider based in Jersey City, N.J. Founded in 1998, Datapipe's roots were in traditional, premises-based managed services. That changed about six years ago when it began offering managed cloud services on top of AWS -- one of the first MSPs to do so. The company is also a Premier Consulting Partner within the APN.
Early last year, Datapipe decided to extend its managed services portfolio to the Microsoft cloud platform. The company had already been a longtime partner of Redmond's on the software side, with practices in SharePoint and Exchange, but its customers were increasingly demanding services for Azure.
"We were seeing demand from our customers to deploy certain workloads on the Microsoft Azure platform," explains Richard Dolan, senior vice president of marketing at Datapipe. "Before we began offering managed services on top of Azure and we were just offering managed services on top of Amazon, we were frequently asked if we could manage Azure workloads, as well."
In some cases, customers are looking to deploy some combination of both Azure and AWS within their organizations. Craig McQueen, who oversees the Microsoft practice at Softchoice, explains that while both platforms share similar base services, they also have discrete offerings "unique to each of them" that customers might have a specific need for.
"So a company might use AWS for everything, but Microsoft has offered up a specialized indexing system, or something, that they want to take advantage of," McQueen says. "So what they really want is that specific service from Azure -- not necessarily the whole platform, but they'll utilize that service so they can call out to it when they need to."
This trend of customers running multiple clouds also bears out among a segment of Datapipe's customers, according to David Lucky, director of product management. "It makes sense for certain applications or workloads to run on one and some on another, and they [customers] want to be able to utilize what's best."
Multi-cloud deployments represent a small but growing partner opportunity. Between 2015 and 2016, the percentage of enterprises planning to use multiple public clouds increased from 13 percent to 16 percent, according to RightScale. Meanwhile, those planning to use just one public cloud vendor fell incrementally from 10 percent to 9 percent. On average, the firm found that organizations typically use three different types of public clouds at any given time, both to run applications and to try out.
In particular, Gillett sees the multi-cloud approach as being the model of choice for certain large enterprises, which can handle the complexity of such deployments better than SMB organizations. "They're using Azure for certain things, or they're using AWS for certain things, or they want to be able to go between both in the event of some catastrophic event in one of the cloud platforms," he says. "It's kind of the idea of not putting all your eggs in one basket."
CTP's Lancaster concurs. "Our customers tend to be the Global 1000 enterprises. All of these organizations have multi-cloud aspirations, if not existing strategies. So they're going to have some Amazon, they're going to have some Azure, they're going to have some private cloud, and they may even have some Google," he says. "It's important that we're able to deliver value across platforms."
Which Cloud for Which Customer?
The bottom line is that there's healthy demand for partners that have expertise with both AWS and Azure. However, the path to being able to sustain a multi-cloud practice can be a bumpy one. How can a channel firm with finite sales and technical resources stretch its portfolio to accommodate both platforms?
Among the partners we spoke to, a common piece of advice is to approach customers from a vendor-agnostic angle, focusing on their individual needs rather than leading with a narrow, platform-specific sales pitch. As Softchoice's Gillett says, "a public cloud platform, for the most part, is a public cloud platform. Some of the services under the covers vary, but the methodology or the approach we take is very similar."
"In the end, it's the same customer need that you're trying to fulfill," adds McQueen. "So our messaging tends to be somewhat vendor-agnostic."
That hasn't always been the case at Softchoice; up until a year ago, the company had trained its salespeople to have more vendor-specific conversations with clients. McQueen, whose focus is on Softchoice's Microsoft business, worked with his AWS counterparts at the company to adjust its messaging toward solving business problems, rather than steering customers to a specific platform. The change has "resonated really well" with the Softchoice sales team, he says. "They loved that it was simplified, that they could whiteboard a conversation with a customer, and they're not stuck with one vendor conversation."
In some instances, however, customers may have already decided which cloud platform they want to run with, making the vendor conversation a moot point, anyway. For instance, among Datapipe's customers, Dolan has observed that those running application development workloads tend to choose AWS, while those with Microsoft workloads -- Exchange, SharePoint and so on -- not surprisingly lean toward Azure.
It's an observation that McQueen has also made. "You have a set of customers who [are] Microsoft customers. They've been buying from Microsoft, they're comfortable with how they transact, they have .NET developers, SQL Server in-house. They're just going to go to Azure naturally because that's the culture," he says. "And then you have that other divide, those IT directors who really don't like Microsoft. They buy it when they have to, but otherwise they put in open source and Java and ... they're more likely to go with AWS."
As the cloud has become more ubiquitous and users more educated, organizations tend to come to partners with a skeleton of a cloud strategy already in mind. That's often been the case with CTP, which offers cloud migration and application development services for both Azure and AWS.
"In most cases, our customers have already selected their platform," says Lancaster. "So there's very little friction in the field because customers have already made the decision." And when it comes to optimizing CTP's services offerings for both Azure and AWS, he notes that it's "completely portable."
"If we start out with an opportunity with Microsoft, we're not going to change horses. We stay with Microsoft, and that's kind of the deal."
Craig McQueen, Director, Microsoft Practice, Softchoice Corp.
"We've actually developed some of our own software IP that runs on multiple platforms and can be optimized for different cloud endpoints," he says. "That helps us with that process."
Some things, of course, are not portable. Azure and AWS are still different platforms; the technical specifics of working with one over the other will vary, and partners must have the flexibility to meet that challenge. Dolan points to the issues of cloud security and compliance as an example.
"When you architect and deploy a physical server, you know all the components that are connected to it and you can create certain security rules and controls that will manage that entire environment," he says. "Now, [imagine] if you move that idea into a cloud environment, and you have somebody in your team with access rights and they go into a console and spin up additional cloud instances. If the proper automation rules are not set into effect, as soon as that new instance is spun up, that entire solution is out of compliance, because you're not going to have all of the proper security controls deployed to maintain whether it's PCI or HIPAA. There are very specific, prescribed security controls that must be deployed to maintain those certifications.
"And each cloud platform has its own nuance in how that's handled. That's where there are very specific differences. Datapipe has a tremendous amount of experience around security, and we're able to develop those offerings [for] our clients."
Training (and Hiring) for Two
Offering services for two different cloud platforms can obviously pose a strain for smaller partners, who don't always have the resources on hand to train up their existing teams or recruit new talent. Dolan concedes that it's been a challenge even for Datapipe, a larger partner with roughly 650 employees worldwide. Solution architects with experience in either the AWS or Microsoft platform are "increasingly hard to come by," according to Dolan. "It's incredibly expensive to train everybody. It's incredibly hard to find those individuals to hire. So that would be the struggle for small organizations that are trying to build up competencies in not only one, but multiple cloud platforms."
Datapipe, at least, has benefited from having a longstanding Microsoft practice even before it began selling Azure. Because of that relationship, Datapipe was able to receive training assistance from Microsoft, says Lucky. "Microsoft was influential in getting us to where we needed to be to launch our managed platform on top of Azure. They helped us quite a bit in the additional training that was needed to certify our teams on the platform itself."
The knowledge building has been an ongoing process at Datapipe, which trains its sales and support staff on both platforms every week. "It is an investment and it should be recognized as that," Lucky says. "Because to train people -- to take them offline, so to speak, and train them -- is definitely an investment that we make here."
Softchoice, which has roughly double the headcount of Datapipe, has also grappled with how to cultivate its employees' skills in AWS and Azure. "We look for resources that are cloud-agnostic. They have maybe a strong background in [either AWS or Azure] but have the ... right approach that they're willing to learn the other platform," says Gillett. "It gives us an advantage that we can bring an agnostic resource that can talk to a customer, but it has been a challenge finding the right folks to do that."
CTP's Lancaster describes his company's strategy regarding the skills challenge as one of steady recruitment followed by targeted training. CTP had around 140 employees as of this past summer but is "growing rapidly" under this approach, effectively doubling its size year-over-year.
"We hire people with experience in technology and IT," Lancaster says. "We find it's easier to train people on Azure or AWS than it is to train them on understanding the complexities of IT. So what we train people on is our IP and our own methodology. If they've got a few years of platform experience, that's great. But it's easier to train people on the platform than it is to give them real-world experience."
Some Words of Advice
As recently as a few years ago, it would have seemed anathema for a traditional Microsoft partner to align itself with a competitor like AWS. Nowadays, it's a different Microsoft -- look no further than its recent turn as a supporter of Linux and collaborator with sometime-rival Salesforce.com Inc. This spirit of openness also seems to extend to its partners forging deals with competitors. Longtime Microsoft partner Softchoice, for instance, hasn't received any negative response for selling around the AWS cloud, according to McQueen.
"I've noticed a definite change [with Microsoft]," he says. "I think that certainly, there's been a change in understanding that there's many different platforms out there, and the way to win is to accept that and deal with the reality accordingly."
From the AWS side of things, Gillett sees a similar acceptance. "They want to do what's right for the customer just like we do, so we haven't had any pushback from Amazon on the Microsoft-versus-AWS thing."
The key, according to McQueen, is trust -- making sure that every party involved in a transaction follows through with what's expected of them, and not reneging on deals. "If we start out with an opportunity with Microsoft, we're not going to change horses. We stay with Microsoft, and that's kind of the deal," he says. "It just takes one or two examples where you switch vendors in the middle of a deal, or something like that, before that kind of story gets [spread] around all the sales teams."
Besides being mindful of their relationship with each platform vendor, partners who are debating whether to expand their portfolios from either Azure or AWS to both should really assess their target customer base. Partners with customers running toward larger enterprises can easily justify the effort and cost of going multi-platform. Partners in the SMB space, on the other hand, might have more difficulty.
"It's not for everybody," cautions CTP's Lancaster. "We're doing it because we made a choice to be a provider of professional services for the Global 1000. ... And being multi-platform is a requirement for that choice. But if you're not targeting those types of customers, it may not be worth taking on the overhead of engaging with multiple platform providers."
That advice is echoed by Gillett. "Talk to your customers. Make sure that the effort that you're going to have to expend here is going to be worth it in the end. I would probably think that, in most cases, it would be."