Amazon's partner chief says that its policy of customer obsession is helping it win allies in the cloud wars with Microsoft (AMZN)


Doug Yeum AWS WarmBG

  • Amazon Web Services and Microsoft are both recruiting allies in the escalating cloud wars. 
  • Microsoft, considered a solid second-place player to Amazon, has long held that its network of partners — who sell software and services to help companies take advantage of the cloud — is a major competitive advantage against AWS. 
  • Amazon partner chief Doug Yeum says that the company has had great success in recruiting partners, thanks to the dominant position of its cloud: Customers get access to cutting-edge new technologies, and partners get access to those customers.
  • Yeum also says that Amazon’s famous policy of customer obsession appeals to partners, as they can both focus up on making sure customers are successful.
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The cloud wars between Amazon and Microsoft are only heating up, and they’re looking for friends in the fight.

Amazon Web Services still leads in terms of market share, but Microsoft Azure, widely acknowledged as the strong second-place contender, established itself as a worthy rival when it won the $10 billion JEDI cloud deal with the Pentagon.

Microsoft has long held that one of its key advantages is its decades-old network of partners, who provide services to help companies move to its Azure cloud in return for a commission. The company often boasts that its partnership program is so robust, 95% of Microsoft’s overall commercial revenues flow through partners. 

Amazon, however, is no slouch: It boasts “tens of thousands” of members in its seven-year-old AWS Partner Network, or APN, and says that 90% of the Fortune 100 and the “majority” of the Fortune 500 use services through the program.

“Partners really like us because we innovate faster than anyone else,” Doug Yeum, head of worldwide channel and alliances at AWS, told Business Insider in a recent interview. “We obviously have more customers than anyone else. Our platform is the most mature. Customers actually choose to use us because we have the right tool for the job to be done by the customer.”

Yeum says that Amazon’s philosophy of prioritizing customer needs over competition with the likes of Microsoft is helping it recruit and retain like-minded allies in the cloud wars.

“We’re more customer obsessed than anyone else,” Yeum said. “We’re pioneers. We’re unusually long-term oriented…I find that partners who share those values and appreciate the unique aspects of AWS, those are the partners we end up developing really deep relationships. I hope that we can build a relationship that outlasts all of us.”

Where AWS is putting its money

The first area AWS is investing in for its partner program is expanding the catalogue of services available through the program, which currently stands at around 175 distinct services. Yeum gave the example of Amazon Connect, its cloud software for customer service call centers. Partners take Amazon Connect, add their own industry-specific features and additional services on top of it, and resell it as a complete solution.

“When you launch something like that, it creates new opportunities for partners to utilize that to innovate on behalf of their customers,” Yeum said.

The second area that AWS wants to invest in is its geographic footprint expansion. For example, last December, AWS started operating out of the Stockholm area in Sweden, which gave more opportunities for partners in that region to deliver services to their local customers, Yeum says. 

“What you’re seeing is as customers start to move faster, the demand from customers is leading a lot of new opportunities for partners,” Yeum said. “The goal is to have an AWS region in all the world’s major economies as well as emerging ones.”

The third area is that AWS is investing in helping customers with moving their legacy applications from SAP, VMware, and Oracle onto the cloud. There are now over 5,000 customers using SAP applications on AWS, which Yeum says highlights the success of partners helping migrate their customers to the cloud.

“When you combine the most experience, best technology and broader set of offerings, it just leads to most customers wanting to use this platform for SAP,” Yeum said.

Indeed, Yeum says, the growing popularity of running SAP software on AWS is indicative of a broader shift. Many of Amazon’s first cloud partners were themselves startups, building tools to make AWS easier for developers and customers to use. Now, though, more AWS partners than ever started off working with legacy technology from the likes of SAP and Oracle before shifting to focus on the cloud.

That being said, AWS isn’t abandoning its origins in working with startups. Lately, Yeum says, he’s been seeing enterprise startups rush to work with the APN program in order to get access to Amazon’s growing stable of enterprise customers.

‘I don’t spend a lot of time looking at Microsoft’

Amazon is famous for its policy of “customer obsession,” focusing less on what the competition does and more on the effectiveness of its own products and services. Yeum says that despite Microsoft’s momentum, AWS and its partner network hasn’t changed its priorities.

That means focusing on building those relationships, rather than worrying about what others like Microsoft are doing.

“I view partners as customers,” Yeum said. “As you know well, we have this long standing tradition of applying a rigorous approach of working backwards from our customers. My job is to work backwards from partners to understand what their needs are…I don’t spend a lot of time looking at Microsoft.”

Yeum does say, however, that Microsoft’s history in the space may actually be a liability, given how fast the cloud computing market moves.

“A company that has had a partner network for a long time may be stuck in the old model,” Yeum said. “A lot of the things we’re doing right now is focused on cloud native partners and the cloud business.”

Speaking more broadly, Yeum says that Amazon has talked with partners who were stuck between a rock and a hard place, where a vendor they were working with pressured them to alter a deal to their benefit, and not the customer’s. Yeum says that Amazon’s policy of customer obsession would prevent that from ever happening.

“They weren’t able to build trust with their customers,” Yeum said. “If you work with AWS we will never put you in a situation where you have to sacrifice customer focus over revenue. Partners love working with us because of that.”

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SEE ALSO: An Amazon cloud VP explains why the company is getting into hybrid cloud, a technology that it spent years trashing while Microsoft made big bets

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