AWS Opens Marketplace to Channel Partner Software

Amazon Web Services (AWS) this week flexed its distribution muscles by encouraging channel partners that develop their own applications to bring those offerings to market via the Amazon Marketplace.

During an online AWS re:Invent conference, AWS announced that consulting partners that build their own software will now be able to distribute their software via the AWS Marketplace like any other independent software vendor (ISV).

Channel partners of all sizes of late have been developing their intellectual property more aggressively to better differentiate themselves. Having that capability is increasingly critical because vendors such as AWS continue to expand the range of managed and professional services they offer. Solution providers are increasingly being required to add value by extending the capabilities of a core platform that is now more often being provided as a service by an IT vendor themselves.

By making an AWS Marketplace that already serves 300,000 customers, AWS is effectively opening up a distribution channel for consulting partners that develop their own code. Of course, those channel partners could have relied on traditional distributors such as Ingram Micro and Tech Data to accomplish that same goal. AWS Marketplace, however, provides an alternative route to market that is likely to prove to be more efficient, and could be a quick way to new revenue streams.

AWS CEO Andy Jassy told partners this week that thanks to a pressing need to accelerate digital business transformation initiatives, the opportunity to create solutions is massive.

“There are so many customers that need help making that transition,” says Jassy.

In general, the channel program at AWS is focused on two classes of partners: consultants that may resell AWS services, and ISVs that consume cloud infrastructure.

Financial incentives, industry focus

AWS announced that in 2021, startup ISVs that have passed an AWS Foundational Technical Review (FTR) will now also be eligible for the AWS ISV Accelerate Program through which AWS co-sells applications. AWS claims ISVs that participate in that program typically see deal sizes that are 2.5 times larger than ISVs that don’t. In 2021, AWS will offer credits to offset listing fees for the first five private offers for ISVs participating in the APN Global Startup launch on AWS Marketplace, along with further discounts to AWS Marketplace listing fees for renewal of pre-existing deals. AWS is also increasing the incentives it provides its internal sales teams for co-selling third-party applications.

The cloud service provider is also encouraging ISVs to consume the machine learning (ML) services it provides to drive artificial intelligence (AI) applications. An AI/ML acceleration program for APN Global Startup Partners provides up to $5,000 in AWS ML credits. The AI/ML acceleration program also offers APN Global Startup Partners the opportunity to join pilot programs of new AWS AI/ML services.

AWS is also looking to recruit partners that are building data services In 2021. Startups that are data providers will be able to access up to $15,000 in AWS credits, along with co-selling opportunities with AWS and associated marketing collateral.

Finally, AWS has added competency programs for hospitality, energy and public safety as part of an effort to reach deeper into vertical industry segments.

It’s clear going forward that despite a sales and professional staff focused on enterprise IT organizations, AWS is increasingly depending on channel partners for a massive portfolio of cloud services. At a time when most organizations are shifting workloads to the cloud to enable employees to work from home, it also turns out that channel partners have never been more dependent on cloud service providers. That level of co-dependency should benefit both parties for years to come, assuming, of course, the line remains distinct between where services provided by a cloud service provider end and the services provided by a channel partner begin.