Why AWS’ Techie Focus May Make Cloud Harder for Your Boardroom to Digest

Without a doubt, AWS has hit the sweet spot in the hyperscale cloud space. In a recently published report that tries to draw a line in the sand to predict the winner of the cloud war, AWS is unsurprisingly holding strong against its competitors. But that doesn’t mean the firm can look forward to smooth sailing and IT executives may have a tough time convincing their boards given AWS’ panache for speaking fluent techie and dedicating little time and resources to currying favor with the business audience.

Indeed, at the recent AWS Summit in London, the popularity of the firm’s cloud offerings among the technical crowd became even more pronounced as a crowd of 12,000 developers, administrators, IT professionals, and experts descended on London’s ExCel center.

On the face of it, this is quite an achievement; the managing director of AWS UK certainly noticed it and proudly announced this year’s attendance had more than doubled last year’s, which is a record. But, here’s the problem: The firm is fantastic at getting its fans engaged and appealing to the tech audience, but they aren’t the only stakeholders in the ecosystem. And while the role of IT executives is often to frame technology in a business context, AWS’ approach does little to make this conversation easier.

Exhibit 1: AWS core audience statistics

Source: AWS Summit, London, 2018

That’s part of the problem with AWS as a major enterprise player. Now, before its techie groupies launch a full assault for not paying homage to the cloud god, the issue is not AWS’ ability to deliver services or innovate in the space. It’s the firm’s worrying lack of ability to communicate its vision to business leaders and, importantly, build feedback loops with members of the business community that aren’t already raving fans.

Keep your fans close and keep your critics in an air-tight, sound-proofed room in a desert somewhere

Let’s start with the last point first. AWS prides itself on asking its customers what they want—and at the AWS London Summit, the keynote speaker referenced AWS’ approach of asking what its clients wanted and then building it. The firm’s executives even peppered the lengthy keynote presentation with client soundbites describing how they needed to achieve a business outcome (that’s about as detailed as things got) and, unsurprisingly, proclaiming they couldn’t have done it without AWS. In many ways, this is both the firm’s biggest strength and most prominent weakness—it has a fan club and focusing on meeting its needs sidelines everyone else. And, if you’re a critic, you can expect to be ignored or chased away with a broom.

The risk, of course, is clear. In the same way that the downfall of many dictators begins when they only listen to their sycophantic advisors, AWS, too, may start to lose its edge if it can’t break free from a culture that ensures that only the positive feedback makes its way to the top.

Even with a room full of cheering techies, winning over a skeptical business audience may be a lot tougher

And then there’s the second challenge—building a vision for cloud services that doesn’t need a room full of techies to explain it to the business. While this is unavoidable to an extent, most IT services companies are making a noticeable effort to translate complex technical information to a business audience. This effort is what frequently sets apart the likes of Accenture and Deloitte in the industry—they know how to hold C-Suite conversations where technology is core to the company’s business strategy.

Countless conferences over the last year have helpfully avoided the urge to dig into the core technical proposition and instead focused on the use cases and scenarios that would offer decision makers in the audience the opportunity to go back to the boardroom and say “this is why we need this.” Tellingly, at the AWS summit, the focus was more on the technical prowess of their new offerings and why we should all be buying them. No questions asked.

When you buy electricity, do you care where the supplier houses its generators? When you use public cloud services, do you bother to question Google, Amazon, or Spotify about where they house their massive data farms? It’s the same when engaging with IT services firms to get work done. You assume they have the core skills and scale to deliver the grunt work—you want to understand how they can help you achieve your business goals.

The products’ detailed technical explanations stood in stark contrast to the superficial and relatively detail-free client speeches. AWS helped clients, and it was great—without any real proof points.

We could read a few things into this. Perhaps the firm is struggling to pivot its approach toward a business audience or they just don’t think they need to. Maybe it wants to stick to what it’s good at and keep the techies happy and let them win over business leaders on their behalf. It’s difficult to tell, and as with many of AWS’s ambitions, it’s not always clear if it’s by design. But, for the service provider ecosystem, we spend most of our time talking with, this approach is likely to continue to be reassuring. A short while ago, AWS sent a ripple of concern across the ecosystem when gestures indicated that it was expanding its professional services offerings—something that would make the firm more of a competitor than an ally to some of its current partners. As long as AWS keeps focusing on a techie audience, it leaves plenty of room for its partners to add value by capturing the attention of the business audience or by bringing AWS’ cloud capabilities into engagements as part of its digital transformation arsenal.

When we talk to enterprise service providers about AWS, we expect a range of emotions. Some find it hard not to show the inevitable slight tick, pursed lips, and clenched teeth when we mention AWS’ name. Some of this is, no doubt, due to the big wet bite AWS has taken from their market share. But most see the partnership as a splendid opportunity to link themselves to the technical might and innovation strength of AWS. 

Business partnering is replacing traditional outsourcing and “cloudability” is not even part of that conversation

Our recent study looking at digital transformation to the OneOffice revealed that the majority (57%) of the highest quartile of performers in the Global 2000 (based on revenue and profitability) view their primary service providers as supporting their digital transformation roadmaps, acting as co-innovation partners to help them achieve co-defined business outcomes.  Only a third saw their service providers solely as a resource to provision skills and scale via a headcount model:

Exhibit 2: Highest performing enterprises are replacing traditional IT outsourcing with value-based partnerships for digital transformation

Source: HFS Research

This data speaks volumes. Enterprises’ digital leaders need providers that can work with them to achieve increasingly challenging outcomes. Most no longer requisition 500 developers per year to code in ABAP for strategic initiatives; that is a commodity practice today, usually delegated to a lower-level manager to lead.  Nearly all G2000 firms today have a Chief Digital Officer tasked with taking their companies through significant business model change, enabled by smart technology provided by partners that understand what is required.

Bottom line: AWS may be the techie’s favorite, but its current approach makes a CIO’s job much harder when pushing it as a chosen cloud provider 

All of these factors combined make AWS’ current position a little unstable, which may seem a crazy thing to say given that it has been growing exponentially and currently features in the top 10 of our high-value IT services list. But modern enterprises are changing, and there are already firms sinking because they can’t quite pitch their technical expertise to the right audiences in the modern enterprise. Let’s imagine that overnight, techies no longer hold the strong positions they have now, and business execs decide to plot their course independently, how likely is it that they would pick AWS? It’s difficult to imagine them chewing over the pros and cons of the firm’s latest compute services.

In reality, they are more likely to approach one of the professional-services-heavy providers to help them pick the right cloud partner to get them where they need to be. Even the clients we speak to that are certain they want to work with AWS are asking providers to manage the relationship for them. While it’s unlikely the tech audience will lose sway, even with enterprise appetite shifting toward outcomes, it’s clear that the Achilles heel of AWS, ironically, is the love for their tech community—and to a lesser but potentially more impactful extent, themselves.

So, it falls on AWS to make a decision, continue harvesting affection from their current community, and hope it strengthens its role in modern enterprise technology decision making. AWS should keep working with partners to do the complicated business stuff, or it should start to translate tech jargon into something that makes sense to other stakeholders. If it’s the latter, it’s likely to set off a series of other battles in the ongoing cloud wars as providers take stock and the other cloud giants re-evaluate their positions. If we were to guess, the first shot will likely to come from an acquisition that significantly bolsters AWS’ professional services capabilities.