Live Reaction: Industry Speaks Out About AWS Managed Services

Industry reaction has begun to trickle in to news that Amazon Web Services has entered managed services, in some cases, competing directly with partners and other MSPs.

If you’re an MSP, vendor, reseller or any other channel player, we want to hear from you.

Send your thoughts to [email protected] and we’ll add your thoughts here:

“I don’t believe this Amazon managed service threatens the vast majority of MSPs.

Most MSPs focus on meeting the needs of clients with 10 to 1,000 employees, not the Fortune 2000.  

However, MSPs do need to figure out how to offer a comprehensive cloud solution that delivers value to their core constituents, which includes monetizing public cloud management, application orchestration and identity access management.” 

– James Lippie, principal MSP consultant at Clarity Channel Advisors

“The announcement of AWS managed services signals the growing adoption and acceptance of outsourced IT management, which is a major leap forward for enterprises who historically have been reluctant to entrust the management and security of their IT infrastructure outside their firewalls.

All in all, it’s great news for AWS customers looking to streamline the overall management of their infrastructure.

Since this service is geared towards Fortune 2000 companies, it doesn’t pose much of a threat to MSPs.

On the contrary, this news offers great opportunity for MSPs to capitalize on the rising tide of companies who are looking to them to provide the technology and expertise needed to successfully run and support their businesses.

SMBs have long embraced this business model, and now, more than ever, MSPs have the opportunity accelerate the growth of their businesses by investing in and delivering a comprehensive suite of cloud-based solutions that provide value to their customers.”

– Statement from Kaseya Corp. (Editor’s note: This statement was revised from an earlier version, at the request of Kaseya)

“Amazon’s move into the managed service provider space is exciting news for companies committed to AWS environments.

For enterprise-grade organizations operating on a single-cloud platform, AWS Managed Services will help them deploy an efficient AWS environment.

However, companies looking to make the move to the cloud or manage a smaller AWS environment will have to look elsewhere for support and services, as AWS Managed Services isn’t built to scale down.

While other cloud providers do offer a layer of managed services, the market for MSPs is maturing towards multi-cloud platforms.

Organizations of all sizes are looking for an aggregation of services across clouds and they want insights from multiple providers.

While this new AWS feature will be a powerful tool for a subset of existing AWS customers, we’re interested to see how AWS will address the growing demand for multi-cloud MSP tools.”

– Bali Kuchipudi, product marketing lead at SoftwareONE

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“As for the AWS managed services offering, I don’t believe this will pose a big threat to MSPs.  

My perspective on the AWS managed services offerings is that they are of a different flavor than what MSPs traditionally provide.  

The AWS offering appears to be limited to the AWS cloud while MSPs are much better at understanding and responding to their clients’ line-of-business apps and end-user needs. 

On the other hand, I could certainly see where MSP’s may leverage this AWS offering as they migrate more of their clients’ solutions to the cloud.”  

– Tommy Wald, 20-year owner of one of the first MSPs and now a consultant

“At ConnectWise, we’ve heard concerns that the Amazon Web Services cloud platform offering may be a threat to our customers’ businesses.

We don’t see it this way at all, and here’s why: Think of examples where other large companies tried to go directly to the SMB with hardware, software and services.

After sinking a lot of investment in the SMB market, most of these companies eventually realized they needed the channel if they wanted to get their products to the end user. 

Why?

Because the channel – the MSP – is able to offer so much more than the technology stack.

A successful MSP differentiates itself as an active technology advisor that also provides an SMB with great customer service, implementation expertise and ongoing support that transcends technology.

In other words, the MSP takes on more of a business partner role that SMBs want and appreciate.

We’ve always told our partners that they should think of themselves as providers of the last yard of technology offerings. It is this final destination that will remain within the channel, and we don’t see that changing anytime soon.”

– Craig Fulton, vice president of product at ConnectWise

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“(AWS) may have operated a consulting practice for some time, largely focused on helping clients migrate onto its cloud, but until now it had kept out of many areas of cloud management – patch management, backup, monitoring, security, etc.

It had left such responsibilities to clients and partners and many partners, unable to compete on price with the global giant, had chosen instead to partner with it, focusing on peripheral services such as operational processes for incident, change, and problem management.

While AWS may not have killed them all instantly, their business models have been served a potentially mortal blow.”

– Bill Mew, cloud strategist at public cloud provider UKCloud. Read Mew’s full blog here.

Amazon’s foray into managed services is certainly cause for pause if you are an MSP today. But instead of viewing this development as an immediate competitive threat – it isn’t – consider it the catalyst to retool your business.

MSPs today need to think beyond the basics of network monitoring, patch management, backup or provisioning.

Amazon may well expand into the SMB market some day with a fully commoditized and attractively priced set of these same basic services.

Competing on price with this giant would be a fool’s errand.

Smart MSPs should begin moving their customers to the cloud and taking on the role of business consultant, helping clients make choices for cloud solutions that will grow their business or trigger other strategic value.

Get creative.

Be the digital advisor for everything from your customer’s social media activities to the specifics of their vertical industry.

From those efforts, customers will find value that Amazon will not be able to match.

– Carolyn April, senior director for industry analysis at CompTIA

“What I think every MSP has to ask themselves is, what if Amazon continues to expand this managed services program down into midmarket; small and medium businesses?

Not only am I not surprised, I expected it.

This is the behavior of the vast majority of hardware and software vendors throughout the channel for the last 10, maybe 15 years.

They have been steadily moving into managed services, literally offering managed services, and telling partners ‘you don’t have to do this, just resell ours.’

(MSPs) are resellers again.”

-Charles Weaver, CEO, MSPAlliance

“I don’t think that, especially in the short term, AWS Managed Services presents a major threat to the majority of the MSP market.

 MSPs have been focusing on a certain market segment for years and have unique positioning geared towards SMBs, which is not (the) typical customer range Amazon is targeting. (AWS is targeting large enterprises rather than SMBs that MSPs are focused on).

From this perspective, I’m not very concerned about AWS.

However, there are a lot of larger MSP companies that are targeting the same business category as Amazon. 

For example, companies like HP, Rackspace, and IBM/Softlayer, may see AWS as a new competitor, because they offer similar services in this particular space.  

At the same time, competition is good because it drives innovation. Service vendors who find themselves in the same market segment will need to start thinking differently. Innovation is beneficial for the development of the cloud industry, which still has a minority of market share in overall IT spending. 

In the SMB space, smaller MSPs are more flexible and agile. They understand the market and are quick to come up with new ways to drive sales.

Larger players, however, are not as flexible. Some of them may choose to pull back and refocus on other activities if cloud is not their core business.

AWS is pressing into the cloud market space, offering anything and everything.

It will be an interesting and exciting year to see whether their strategy is going to be successful in taking business away from the larger MSPs.”

Jan-Jaap Jager, senior vice president and general manager, Acronis cloud business unit