The AWS effect

Doug Yeum, AWS

The new AWS region represents a significant opportunity for partners, says the company.

Amazon Web Services will be switching on its South Africa region sometime in the first half of 2020. It will be hosted in Cape Town and there will be three availability zones. This will go some way to reducing latency for users in the country and bring a number of technologies online, such as AI, ML, and IoT, to name a few.
This, says the company, is very good news for its partners.
New AWS channel chief Doug Yeum spoke to The Margin at its re:Invent conference in Las Vegas in December about what’s in store for business and partners ahead of the
He was in charge of the AWS business in South Korea and remembers the launch of the region there in January 2016.
“It completely changed the trajectory of the business,” he says, inclining his hand and forearm to a steep diagonal slope.
“When we launched that region, there was so much customer demand, which was tremendous for the partners, especially for those who had invested early on and were able to gain the necessary experience and skills. When the region launched, customers chose those partners that were ready.”
“When we launch a region, we have a positive economic impact on that country.”
This is typical of every market in which it launches, he says.
“If I’m a local partner in those countries where we’re launching a region, I’ve got to get ready and go deep into AWS technologies and learn how to best serve my customers. You’ll reap the benefits,” he predicts.
Another example was when it launched its Stockholm region in December 2018.
“I was talking to a partner there – one of the leading consulting firms – and they said in the 12 months since the launch, the volume of business from AWS doubled. They also had to double the number of consultants.
“I hope that when we launch in South Africa, we’re going to be able to create a network effect where customers, partners, and developers are happy.
“When we launch a region, we have a positive economic impact on that country. We don’t talk about it very much, but it does have a huge impact on economic conditions.
“If you have a region, it’s a game changer.”
Fresh set of eyes
Yeum has been at AWS for six years, roughly half of which were spent running the business in South Korea. This followed seven years at Google, and before that, he ran a systems integrator company in Seoul. He’s now been head of worldwide channels and alliances for about six months.
While in Korea, he’d often be at the Seattle head office for meetings, and recounts how he always made a point of asking CEO Andy Jassy for a quick one-on-one meeting. This obviously made an impression, because, ‘out of the blue’, Jassy asked him to be his chief of staff. He held this ‘shadow’ position for two years, and then decided to step into the then-vacant position of worldwide channel boss. It’s hard to overstate the importance of the new role, and it’s this sphere that is expected to significantly contribute to future growth in the company, which by Q3 last year was delivering a run rate of $36 billion, and growing at 35% year-on-year.
According to Gartner, AWS has about half the global Infrastructure-as-a-Service public cloud market share, followed by Azure at 15% and Alibaba with 8%. Google Cloud Platform is at 4% while IBM is at 1.8%. The rest accounts for roughly 23%. Canalys, meanwhile, says AWS is at around 32.6%, followed by Azure at 16.9% and Google is at 6.9%.
Yeum says he’s been tasked with bringing a fresh perspective to the business, or ‘a new set of eyes’, aimed at unlocking more value for the partner network and the business.
Asked what he’s noticed in his new role, Yeum says it has some great partners, ‘but they’re pretty demanding’.
“Everyone wants to move faster because they all see the opportunity that’s ahead of them. They want to move faster so they can grow faster.”
One thing that has struck him is the diversity among partners, with plenty of ‘cloud-native’ ones.
Some partners have wisely focussed on doing one thing really well, such as specialising in its Amazon Connect cloud contact centre product, or SAP migrations, which, he says, have turned into profitable and fast-growing businesses.
He says customers are seeking help from partners in moving from on-premises to the cloud. “And some partners are trying to keep them there (on-premise) and telling them they don’t need to move, that they can still do private cloud.”
Nowadays, however, customers have become a lot more knowledgeable about the benefits of cloud.
“So these customers are saying, ‘We’re going…do you want to help me or not?’ And if they don’t, they have other options.”
Yeum says customers, meanwhile, are still having a hard time trying to differentiate between the options of cloud migration, and it is here that the partner can help support this transformation.
“The way I think about it is that our partners are just like any other customer. So the customers are transforming, and that means the partners also have to transform to remain competitive,” he says.
“For companies to stay relevant and competitive in their markets, they need to continuously innovate and invest in new technologies and rethink how they deliver services and experiences.
“The partner is my customer, and I’m going to do what it takes to make you successful. We love working backwards from the customer and trying to figure out what they need, and then coming up with the right solutions.”
Sketching the partner landscape, he says there isn’t a standard template of support, as many are at different stages in their growth and require different kinds of assistance.
“You have so many different types of ISVs that need to think about what we can do for each of them.”
The partners, whatever their size, are bound by a common thread in that they want AWS to help them sell to the millions who count themselves as AWS customers.
“That’s our key value proposition,” he says. Unlike many others, not all AWS business goes through the channel. This is because it wants to offer the customer a choice, similar to its retail business in which it focuses on selection, convenience, and price.
“I know some companies say they’re going to be 95% or 100% through the channel. But is that really what customers want? Do they want all their transactions going through the partner? If I’m a customer and I want to work directly with you, why not?
“Some of the partners say, `It’s getting to the end of the quarter, do you need me to do something?’
“And we say, ‘Sure, go ahead and work with your customers, but I don’t need you to do anything.’
“With traditional IT vendors, when there’s a deal to be done, they’re all over you and they’re your best friend. But when the deal is signed, it’s bye-bye.
“We don’t make any money if you don’t use us; you have to be successful for us to be making money, and we love that equation. Our success is dependent on your success.”
Amazon DNA
It’s no secret that one has to be a certain kind of person to work at AWS. Says Yeum: “It requires a certain type of DNA to work here. The culture we have is not for everyone.
“We have a very high bar, and we work hard. We grind every day. We do it because we love it. We still believe we’re a startup, and we act like a startup.
“Big companies don’t usually talk about frugality. Startups talk about being frugal. When I ran my company, I was frugal, and even now, I’m trying to be frugal. That resonates really well. We all live in a world of constraints. No one has unlimited resources. You have to have constraints so that you can be creative and come up with solutions. With Amazon and AWS, constraints beget clarity, and we work under constraints because that’s when we come up with the best ideas.
“I love this culture.”
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