As cloud deployments ramp up across Southeast Asia, channel partners must remain laser focused to remain competitive in a rapidly changing landscape.
That’s according to Nick Walton, managing director of ASEAN at Amazon Web Services (AWS), when addressing the vendor’s expanding cloud footprint with Channel Asia.
“Being laser focused is such a key part of how we think about our customers, and our best partners think like that too,” Walton said.
As the adoption of cloud increases across the region, business models are changing too. In fact, according to research from analyst firm IDC, regional business are quickly exiting their traditional business models, instead favouring cloud-enabled models bolstered by the services economy.
The operating expenses (OPEX) service dominated economy is, as a result, gaining traction while that of the traditional capital expenses (CAPEX) continues its downward decline.
IDC has predicted therefore that by as early as 2020, two-thirds of regional businesses are expected to have exited existing traditional business models and adopted new models enabled by cloud technology.
It is no surprise to AWS that customer demand is driving these changes, from investments in cloud infrastructure, applications and managed services, enabling businesses the capability to discharge top level business decisions under a more agile framework.
For partners to find success in this new services driven economy, they need to be “laser” focused, and specialisation is key, according to Walton.
“Partners should leverage the experience that they have to be prescriptive for customers,” said Walton. “There is also a group of customers who see the benefits of cloud but they do not know how to move forward. We are working with a lot of our partners to help those types of customers.”
The use of VMware Cloud on AWS by the United Overseas Bank (UOB) is a prime example of this, and the first such example in Southeast Asia.
UOB used this tailored solution to seamlessly migrate on-premise infrastructure to AWS, adopting a hybrid cloud strategy.
This approach allowed the business to continue using the VMware Cloud Foundation-based cloud infrastructure technology platform that they are used to across their on-premise data centre and the AWS Cloud.
Not only is this approach more convenient as it allows the same environment to be used that the customer is used to, but it also saves time that would be needed to convert or re-architect any of their workloads when moving from on-premise to the public cloud environment.
“We look for partners who are prescriptive in terms of helping guide customers in this journey,” Walton added. “We are also looking for partners who are focused on developing the skills necessary to be successful in this new environment, and continue to understand what these new services mean for our customers.”
A key strategy for AWS, particularly in Southeast Asia, moving forward, is to help customers see and understand the core benefits of cloud and to assist them in migrating from their physical on-premise infrastructure to the cloud, according to Walton.
“There is still a lot of interest in our core value proposition around cloud,” said Walton. “We want to educate our customers on the key benefits of cloud and the advantages, in particular, of AWS from a cost perspective.”
Walton sees the key to everything else through the prism of education. "We must educate,” he said. “Our customers are focused on turning CAPEX into OPEX. This is where a lot of our customers start. Helping our customers to understand the benefits of cloud technology is a core part of our business in Southeast Asia.”
However, it is not only about cost, Walton emphasised. "When our customers have been using our platform for a few months they tell us about the cost benefits but they also report many additional benefits including agility, for instance,” he explained. “A big push for AWS is helping our customers to benefit the most from cloud.”
Furthermore, as Walton pointed out, it is not just a matter of saving costs and improving agility. There are a plethora of other benefits, many of which were not even possible 12 months ago.
“The next generation of applications are much richer and incorporate artificial intelligence (AI) and machine learning (ML) into the application, leveraging the voice, computer vision, and so on,” said Walton. “These are the kinds of things customers are now asking us for.”
It is also about supply and demand. “Our customers ask for these services,” said Walton. Technologies such as AL, ML, advanced analytics, new ways of developing applications, serverless technology, and so on, are what help customers to remain competitive in an increasingly crowded market.
“We work with our partners to help customers understand how to develop these new solutions and understand what the real business impact is of these new technologies,” Walton added.
Furthermore, technologies such as Amazon Lex, which is the intelligent engine behind Amazon products such as Echo, are setting a new standard for what is possible. For customers, it is now possible to embed a lot of this AI capability in applications through simple API calls.
“It would have been very difficult, if not impossible, for customers to do this previously, especially to that level of accuracy and ability from a time and cost perspective,” said Walton.
“That is the kind of change that we can now incorporate into applications through API calls, which was not possible before. That is a big change.”
While technologies such as Lex apply AI to voice commands, computer vision is also a major investment area for the provider.
Most recently, products such as Amazon Personalise, which was released towards the end of 2018, apply ML to make it easier for developers to create individualised recommendations for customers using their applications.
Applications developed on top of products like Amazon Personalise go along way in improving customer engagement by providing personalised product and content recommendations, tailored search results, and targeted marketing promotions.
“This allows our customers to develop applications that are just completely different and solve completely different problems that have never been done before,” said Walton.
It is apparent how important Southeast Asia is to AWS’ growth plans, especially markets such as Indonesia where the tech giant sees great potential, recently revealing plans to open a new infrastructure region by early 2022 in the country, catering to its growing start-up ecosystem, large enterprises, and government agencies.
Walton also spoke of a business miracle occurring when AWS first launched in 2006. “We had no competition for seven years,” said Walton. “Business miracles almost never happen.”
When Amazon first launched its book business, two years later barnesandnoble.com was formed, and when the Kindle launched, two years later there were a lot of other devices on the market.
“To have a seven year head start for AWS is a business miracle,” said Walton. “What that means for customers is firstly the richness of the platform, particularly when the customer moves to production where you have complex workloads, production workloads, operations becomes critical.”
It is this richness that Walton believes in a key differentiator for AWS.
“Another differentiator,” said Walton, “is the pace of innovation.” Alluding to the fact that in 2018 the hyper-scaler launched 1,900 significant new features, taking the total number of new services to 165.
“It is not just about what we have but the pace with which we continue to evolve is another differentiator for us,” said Walton. “We are continuing to look at ways to deliver more value to customers over time. Price reductions is a good example of that.”
In total there have been 72 price reductions in the history of AWS.
“A focus of ours is to understand deeply what problems customers are trying to solve and using that to drive our roadmap, which drives innovation,” he added.
Furthermore, as investments have increased in Southeast Asia, customers have reported the lead time between a new feature being released in the provider’s home market of the US, and businesses being able to leverage that new feature has seen a significant reduction in recent years.
“It is our continued investment in infrastructure within this region, which is helping speed up the pace of deployment,” said Walton. “Our goal is to have all of our services released across all of our regions as quickly as possible. There is another thing at play, which is our use of automation and the efficiency at which we are improving our infrastructure all the time.”
These improvements means that AWS can ultimately deploy solutions and services more easily.
A concern of customers historically has been hesitation over putting mission critical services in the cloud, however, Walton believes such a concern has all but gone, or at least on the way out. “We saw a tipping point 24 months ago with regards to putting mission-critical services on the cloud,” said Walton.
“We saw that for customers who understood how AWS operates its infrastructure, and how we invest in our platform and security and the certifications that we have, they were, in fact, assured and confident to put their mission critical applications on our platform.”
Particularly in a region where over 90 per cent of organisations are SMEs, many customers, said Walton, simply did not have the resources to invest to the same level as AWS, building out their own infrastructure and investing in security, for example.
“They could not afford the kind of investment required,” said Walton. “Let alone the expertise required to do so.”
By leveraging AWS, such customers were able to compute and store sensitive data that is, in fact, more secure than what the organisation can do in their own data centres.
“This also brings us back to our focus on education,” said Walton. “We continue to educate our user base on the benefits of our products and services. The majority of customers say that they can improve their security posture by moving to AWS versus running their own data centre. I think that is a big change.”
There is also the opportunity in Southeast Asia to leapfrog other more mature regions and move right into the latest technology due to there being a lack of legacy investment in technology.
“I think this is one of the key things AWS does, as in it really levels the playing field for not just developers and engineers, but also customers and partners from start-ups, enterprises and public sector,” said Walton.
“It provides them with the very same latest technology that's available to other developers around the world. I do not think that has been the case in the old world of technology.”
In a wide-ranging interview, Walton emphasised that this represents a “very exciting prospect”, especially with the kind of optimism surrounding Southeast Asia and the creativity and the entrepreneurial spirit that is an inherent part of the region.
“When you combine that with the latest technology such as AI and ML, serverless technology and the ability to scale up infrastructure as and when you need it,” said Walton, “and at the same time for it to be reliable and secure then you have a potent mix with exciting prospects for the future of the region.”
Walton emphasised that the partner events AWS holds across the region are an important element for the organisation in enabling partners.
“These events allow conversations to take place between AWS staff and partners, and between partners and partners,” said Walton.
Furthermore, with ongoing investments across the region, the vendor staffs many of its offices with local staff who know the region and culture of the people they serve.
“They have local relationships and they understand and know the various partners across the region,” said Walton. “We hire dedicated partner managers who are focused on delivering the right kind of support for our partners.”
AWS also provides support around its cloud proposition and in developing migration capabilities, as well as the more specialised focus around areas such as AI and ML, advanced analytics, serverless technologies, and so on.
“This support is a big part of what we provide,” said Walton. “These competencies form a core part of our partner program. It is critical for us to help our partners understand the services that we provide and what they actually mean for them and our customers.
“It is about getting the right people in the right place and then the partner program will help support that. Some of the automation that we are building into the platform allow collaborate more effectively with partners.”
There are a lot of opportunities for partners around cloud migration, Walton was keen to point out.
“We think that in the fullness of time the amount of infrastructure that will be run on-premise will be very small,” said Walton. “What we present to our customers in an opportunity to reduce costs and innovate in a new way with the adoption of cloud technology.”
Indeed, this presents an opportunity for value-added partners to assist customers on this migration journey.
“There is an incredible opportunity for partners in Southeast Asia to help our customers make this move and to develop the kinds of solutions and capability that help them solve problems that they have not been able to solve before,” Walton said.
“I think we are at a tipping point in terms of the progression we see, such as the continued heavy investment in start-ups. There was an $11 billion in venture capital funds deployed in Southeast Asia in 2018. “We do not see that slowing down. I think that the startup space is going to be really interesting for us and our partners.”
In addition to start-ups, he also touched on the firm’s enterprise business. "We are seeing large scale migrations such as SAP and VMware on AWS,” he added. “Lift and shift migrations are picking up momentum, but there is so much more to do. This represents an amazing opportunity for our customers and for our partners.”