A decade of AWS hurting perpetual licensing?

CHICAGO – A full decade after Amazon introduced Amazon Web Services – also known at the time as the elastic cloud or E3 – and AWS has some interesting channel facts to share.

The biggest among the stats being released by AWS is one million active customers per month.

Others of note are:

  • $10 billion plus in run rate;
  • 205 million compute hours per month (18 months ago it was 70 hours);
  • 64 per cent year-over-year growth from Q1 2015 to Q1 2016; and
  • 10,000 plus global channel partners (more than a 1,000 of which are ISVs).

That last stat maybe the most interesting of them all. And, there are several reasons why it’s at the 10,000 milestone.

According to Barry Russell, GM of the AWS marketplace, partners are working with AWS on many things such as development, testing, creating new applications, forming digital strategies, obtaining analytics, and crafting mobile solutions.

He said for the most part solution providers start out focusing on a data centre migration project that goes full scale towards mission critical apps and right at that time they decided to go all in with AWS.

“Migrating a workload or a service, be it a database, HR, CRM or a financial management system the licensing model has to change away from perpetual licensing. The channel wants to innovate at a much faster pace and more towards SaaS; customers are demanding this too,” Russell said.

He predicts that 50 per cent or more of the workloads being handled today by the channel will move to the cloud by 2020.

The AWS Marketplace currently offers more than 1,000 products from more than 200 vendors including channel partners. All of these products are listed on one bill, which Russell says reduces friction because there are no contracts to sign.

Russell added that 30 per cent of the software products that are purchased for on premise solutions become shelf-ware and never get deployed.

“Buying software is too slow. There is too much shelf-ware and the money being spent on this is under-utilized,” he said.

But there are other factors such as customers having short term needs where the AWS Marketplace becomes ideal.

Under this model, Russell said it opens up many more pricing models for the channel even in hybrid scenarios.

The AWS Marketplace has created also another group of channel partners; born in the cloud solution providers. These born in the cloud solution providers use AWS as a new route to market. These companies do not have to deal with procurement issues and they can source more than 1,000 products and partnerships, he said.

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Jim Love, Chief Content Officer, IT World Canada

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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