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A former Amazon Web Services exec explains how the cloud titan learned the difficult lesson of balancing growth and competing with its closest allies (AMZN)

Published by Business Insider on Thu, 15 Jul 2021


<p><img src="https://static3.businessinsider.com/image/60ede61fa8d8c00019b02f54-1157/Tim Jefferson.jpeg" border="0" alt="Tim Jefferson Barracuda Networks" data-mce-source="Barracuda Networks"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>Tim Jefferson, now a senior vice president at networking security company <a href="https://www.businessinsider.com/barracuda-networks-files-for-ipo-2013-11">Barracuda Networks</a>, was one of the earliest leaders in the Amazon cloud unit's partner network in 2015.</p><p>At the time, Amazon Web Services was in its infancynot yet the <a href="https://www.businessinsider.com/amazon-web-services-2021-top-challenges-opportunities-year-ahead-2021-4">$54 billion-a-year business</a> and <a href="https://www.businessinsider.com/how-amazon-web-services-expanded-cloud-empire-beyond-infrastructure-2021-3">dominant cloud computing platform</a> it is now. And its <a href="https://www.businessinsider.com/aws-partners-rely-on-amazon-web-services-competition-startups-2021-4">partner network</a>, which comprises over 100,000 independent software and consulting partners, was just a small organization within Amazon's overall cloud businesses.</p><p>Over time, the AWS partner network has become known for its scale and influence, growing to include software partners like <a href="https://www.businessinsider.com/splunk-ceo-on-aws-amazon-cloud-and-biden-government-2021-4">data company Splunk</a> and <a href="https://www.businessinsider.com/autodesk-cio-secret-to-successful-aws-cloud-migration-reskillling-employees-2021-6">software company Autodesk</a>, which both went all-in on AWS when they moved to the cloud, to <a href="https://www.businessinsider.com/aws-salesforce-team-up-against-microsoft-possible-merger-2021-7">rivals such as Microsoft</a> and Oracle, which both offer products on Amazon's cloud.</p><p>That scale and influence has led many partners to great success, but also means <a href="https://www.businessinsider.com/aws-partners-rely-on-amazon-web-services-competition-startups-2021-4">they're working with a behemoth that has rarely hesitated to compete with its closest partners</a>creating a reality where companies building on AWS often wind up competing with the tech titan, one way or another.</p><p>According to Jefferson, that dynamic, though common in the tech industry, snapped into focus at AWS years ago, when the cloud giant began building its own native software security solutions.</p><p>"Sometimes when the public cloud providers move into a certain space, it can suck the oxygen out of the market," he said. "It still continues to this day."</p><p>For its part, an AWS spokesperson told Insider in a statement that "security is among the many segments experiencing strong customer demand," and "there is opportunity for multiple companies to be successful."</p><p>Jefferson drew on the example of GuardDuty, a threat detection product that scans for suspicious activity on AWS accounts, announced in 2017. The launch of a major, native security product that <a href="https://www.businessinsider.com/splunk-ceo-on-aws-amazon-cloud-and-biden-government-2021-4">overlapped with many partners' products</a> created a "big blast radius impact within the ecosystem," Jefferson said.</p><p>To lessen the blow when AWS moves into partner territory, Jefferson said he was charged with telling partners ahead of time: "I was the guy who had to call all the security [independent software vendors] in a certain area and let them know new services were getting launched at <a href="https://www.businessinsider.com/amazon-web-services-reinvent-conference-free-virtual-2020-7">re:Invent</a>, and it overlapped with their value proposition," he told Insider, referring to Amazon's annual cloud conference.</p><p>Sometimes, that call didn't come until right before re:Invent, Jefferson said.</p><p>As the partner network matured, however, Jefferson says Amazon aimed to provide "opportunities for integration" for affected partners, and <a href="https://www.businessinsider.com/who-is-andy-jassy-amazon-jeff-bezos-2021-2">former CEO Andy Jassy</a> would expect such opportunities as part of a <a href="https://www.businessinsider.com/amazon-ceo-jeff-bezos-memo-advice-2018-4">six-page memo</a> during one of <a href="https://www.businessinsider.com/andy-jassy-amazon-web-services-ceo-2021-1">his infamous CHOP meetings</a>. AWS would also include openings for partners to compete on certain "high-value" opportunities, he said.</p><p>But its tactics didn't always work.&nbsp;</p><p>"Sometimes partners were overly threatened," he said. "Sometimes the overlap was significant, sometimes it created great opportunity. GuardDuty was a good instance where it did create a lot of opportunity and friction at the same time."</p><p>Yet the pressure on internal teams within AWS to get one and six-pagers in front of Jassy meant that Jefferson's team often had to push product groups to consider the impact of a new service on partners before it launched, he said.</p><p>Still, by the time he left AWS in 2017, Jefferson says the culture around partners was changing: "When we were aware of solutions or a new service, we would right away think through the impact and start discussing with some key partners very early on." In some cases, that resulted in delayed re:Invent launches, by as much as a year, to scale back a product based on partner feedback.</p><p>AWS said in its statement to Insider said that when it develops native offerings, "it's really driven by customers asking us to have that capability."</p><p>"When customers have asked us for offerings in certain spaces where others already have solutions, almost always our offering is less developed and might not have the same level of functionality," the statement continued. "If other companies are building businesses where customers are happy with their products and they continue to innovate, they'll have successful businesses whether AWS has an offering there or not."</p><p>Now, with <a href="https://www.businessinsider.com/amazon-web-services-2021-top-challenges-opportunities-year-ahead-2021-4">new CEO Adam Selipsky officially onboard</a>, Jefferson says he's heartened by <a href="https://www.businessinsider.com/amazon-aws-names-adam-selipsky-as-its-incoming-cloud-ceo-2021-3">Selipsky's background at software provider Tableau</a>, and his understanding of partner dynamics when working with major cloud providers. That's especially important given that Barracuda Networks, Jefferson's current employer, is itself a big AWS partner.</p><p>"There's always been friction around the partner ecosystem, trying to get updates from the cloud providers on what their product strategy is," he said. "I think the challenge that all the big cloud providers are doing is really understanding how to lean on the partner ecosystem, versus building native solutions to address those issues."</p><p><a href="https://www.businessinsider.com/ex-amazon-web-services-partners-competition-barracuda-networks-cloud-2021-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/bpa-plastic-containers-bad-health-risks-obesity-heart-disease-diabetes-2019-2">Why I'm throwing away every plastic thing in my kitchen ASAP</a></p>
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