 Live from the Sands Convention Center in Las Vegas, Nevada, it's theCUBE at AWS ReInvent 2014. Brought to you by headline sponsors, Amazon and Trend Micro. Hey, welcome back, everyone. We're live here in Las Vegas. This is Amazon Web Services ReInvent conference. We're excited to be here second year in a row. This is theCUBE, our flagship program, where we go out to the district to see the noise. We're on the ground floor. We're getting all the action. I'm John Furrier, the founder of SiliconANG. I'm Joe Michael. I'm Stu Miniman. We're here getting all the action, all the topics. Terry Wise, director of partner ecosystems for Amazon Web Services. Welcome back. Thank you. Great to be here. I know you're super busy, so we'll just jump right into it. You're winning and Amazon's growing and it's a freight train, secretariat, thundering way, multiple boat lengths, whatever metaphor you want to use. With that, you're drawing an ecosystem. You saw it last year. You saw Marketplace. This is a utility model. Is the strategy changed at all? Is there any tweaks? What's the update of the ecosystem and what's current? The strategy hasn't changed. I think we've tweaked it a little bit. If I boil it down to two things, coming out of ReInvent, we want to make it easier for customers to use our services. If you look at everything we've launched with CodeDeploy and Lambda today and Aurora, it's all about ease of use. The second major theme, hopefully, everybody's picked on is ecosystem. We've had partners present. Godfrey from Splunk was on today. We had Docker in the keynote. This is really an ecosystem play. Frankly, our customers don't win unless the ecosystem wins, because that's where all the value at is. I've been really impressed with Trend Micro, for instance. We've been sponsoring the Cube here with you guys. We're really thankful for that sponsorship. But it's companies like that who actually have a lot to gain from that. I wrote a post this morning about channel services. Huge margin expansion for professional services. That's cool. I get that. That's evolving. You guys are enabling that. Let's talk about in the stack now. Where is the white spaces? Where is the action for your ecosystem? Informatica's now announcing pennies for the hour. It's insane how awesome this is getting. Outside of the channel, partner piece. What's the white space area look like for you guys? Who are you wanting to attract? Who are you growing? I think one of the greatest things about the cloud in general and specifically AWS is just the breadth that we provide the partners in the ecosystem. We're giving these partners the ability to easily sell to customers they haven't been able to engage with the fact that whether it's through marketplace or really offerings and whatnot. But the real white space ends up being in the value add on top of AWS. I'm not taking necessarily one layer but we're talking two or three layers up the stack. The application modernization. The application development. The vertical workflows. That's really where the white space is. And that's what customers really want to pay for. Stu, before I know Stu wants to jump in but I want to just get what your news that you announced. So what specifically did you guys announce this year that's new? Any new program expansions? Yeah, we've got a couple of things. We launched a whole bunch of things but I'll say three things quickly. First is we're planning the more than double on investment in the ecosystem with the real focus on go-to-market. So helping our partners build their business. Traditionally we've been more about around the technology enablement and platform enablement. Now we're really doubling down on the go-to-market with our partners. Two other major announcements is our managed services program. So this used to be a competency for us. We've turned it into a full-blown program where we're wrapping up our intellectual property that we've gathered over the last few years and we're enabling the ecosystem by providing those methodologies and tools and best practices into a full-blown program. I think the third case is very similar to the managed services program, our softwares of service program. We've enabled literally thousands of software companies to bring their products onto the platform in a SaaS model. We've packaged up all of that intellectual property around multi-tenancy and security and high availability and now we're distributing it back to the ecosystem to enable them to move faster. One more question I want to follow up on that, go-to-market. One of the things that we've seen in Silicon Valley is start-ups and certainly the venture capital is trying to figure out Amazon and what are the big bets but start-ups love Amazon and because you can get up and running fast but now the go-to-market becomes a critical piece of SaaS. Bland and expand is a proven business model for winning in the cloud. Look at all the winners there. Splunk, all the people that are doing anything with SaaS, it's a flat hockey stick so long blade and inflection point on growth. You guys are enabling that. What do you offer those companies for that growth and what would you say to them and why should they go to market with you guys? The biggest thing we're trying to do is bring down the barrier to adoption of their products on the platform and one great cloud just brings down the barrier to adoption in general but when you look at that cloud licensing model and starting to license by the hour it turns into a freemium type model. One of the things we're really investing in in our top SaaS partners is let's go out, let's really promote your product and make it super easy for customers to use and they'll adopt more and they'll pay for more once we expand actually the overall market you're going after so I think that's a big piece of this. The other piece is enabling our ecosystem to better align with our field organization which is substantially larger than it was last year so we're actually a lot of joint engagement and joint selling now with our partner ecosystem. So Terry, ecosystem's been a big word obviously it's in your title we've been talking about and there's a lot more focus this year on the enterprise. Last year really speaking the developers you've got both communities here can you talk to us a little bit about how your partners are helping move you into the enterprise further? Yeah what I will say is no question the fastest growing market segments of our business are the enterprise in the worldwide public sector which is an enterprise in and of itself and I will say the vast majority of our engagements with enterprises include one or more partners and we don't win in the enterprise if we're not in with partners. We only capture a small amount of the workloads we rely on the partners value add whether that software functionality, professional services, vertical expertise this is the things that we don't have and if we're going to help our enterprise customers maximize the value of the cloud we have to have partners with us. Alright so Terry what conversations are you having with your partners? I think back to when we first launched the CUBE you know VMworld 2010 VMworld said you know for every dollar we spend on VMworld 15 dollars go into the ecosystem and today the discussion is how much is VMworld eating their ecosystem so give us a little bit of the inside the kind of give and take and roadmap sharing that you guys are doing. Yeah I think it's been really fun over the last couple of days is yeah if you saw our partner summit on Tuesday one of the major themes was think big and go big so most of my discussions actually really all my discussions this week are how do we go really big we're out of the experimentation phase we're out of the investment phase it's now like how do we go all in. You've seen partners like Informatica and Splunk and Aquia this week announce that they're all in with us. Info did it earlier this year so it's much more about an all in strategy and yeah the second part of your question is what's the number? Absolutely No actually we came out publicly and really I'll give you the great consulting answer it depends but now we're finding that our systems integrator and consulting partners who provide a lot of value up the stack strategy security and what not oftentimes earning 10x plus revenue as a multiple of the AWS spent so if you're spending a dollar of AWS you're providing managed services application services security services strategy you can earn up to 10 so just do this question which is an awesome question you don't know because you guys have such a wide range of variability on what your dollar is right so but you're not greedy if you look at the numbers what you're busy saying is it's not it might even be if it's one to five for VMware you might be ten cents to their five so it depends right it could be 20 actually yeah you're absolutely right and it's really dependent upon the value that the partner is bringing to the customer if you're just going to provide managed services on top of the platform there's definitely value there but you know it's a bit of a commodity play if you're talking about vertical strategy and application development and bringing dev ops to the table and all the things you're hearing about that's when you get into these 10 12 13x multiples so based on your experience this is a good thread everyone's about what's in it for me like so people watching out there's like there's a lot of voodoo magic going on the cloud I know you guys Amazon are constantly doing new stuff so I'll bet on you guys I'll do the all in thing no problem but bottom line I need like a sense of the dollars I'll make I'm a channel partner for instance okay I've been doing you know some professional services getting squeezed on margins from the box guys and now I'm got in a cloud service is it like do I get is it all gross profit on my end or what's my margin going to look like can you give some kind of high level order of magnitude insight yeah so I mean there's a sea change going on in the channel I mean gone the days of making a lot of margin on reselling products only and having that be your your core source of income and revenue I mean those days are numbered I mean frankly there's not a lot of value there for the customer and the customers have gotten really intelligent over the last you know decade in terms of well the partner and the customer that's right that's right so the margin question comes into back to the value ad piece yeah I'm going to make more margin providing more value and really becoming a strategic partner to the customer not just somebody who's fulfilling a transaction on you know quarterly basis yeah that business will be around for a while because we've been built on it for a long time but yeah I tell the ecosystem every time you get from build up the stack build value and that's where the money is that's where the margin is yeah so Terry one of the biggest things over the last year was that that government move we interviewed Teresa yesterday can you talk about you know what should we expect to see from Amazon will we have other market places to go deeper into other verticals how do you expand beyond just the general marketplace in certain segments yeah you know it's it's fascinating I love the work we do with the federal government because in so many ways they're leading in cloud and you don't often hear that the federal government is leading in innovation so I think it's great it makes me happier to be a taxpayer not happy but happier and but no I think one of the big trends here is we launched yesterday our service delivery catalog yeah so we're hearing from customers that hey I want my own private marketplace I want a place where I can store and manage images and I want to be able to easily integrate public images from the marketplace the US federal government the intelligence community is leading the way I would expect to see that in other industries health care financial services life sciences yeah as you see this ecosystem coalesce around these opportunities and bring new offerings yeah I mean basically what you're creating is the enterprise app store this is where enterprise can now you become the new IT for them yeah it's when you when you open something up like the marketplace and you see what the ecosystem starts to do I mean you can try to guess what's going to happen but the innovation that's happening in the ecosystem and some of the partners that are moving really fast like Jasper soft and Riverbed I mean and then you know smaller partners that are really coming up it's super fun to watch alright so if you are to become the enterprise app store how do you partner and make sure the customers can use all their applications because even customers that are all in on Amazon they're probably using Microsoft 365 you might be using Google Docs you know how do you make sure that it's not just Amazon that you span the full solution it's a great question and we're living in a hybrid world a lot of people talk about on-prem and cloud but you just brought up a great point there's a lot of other hosted offerings out there some of which live on Amazon some that don't and we've got to make sure these things work really well together so it comes down to integration and that's another great opportunity for the ecosystem how do we integrate sales force with AWS with my on-prem and create this next generation of hybrid cloud and a huge huge opportunity so we can't not talk about the Patriots so we got to get the sports now I'm a Jets fan so this is going to be painful so awesome I love to see the Jets twist in the wind but that's me I mean he's due to get fired New York Post had a great headline two weeks ago he's got to go I mean they're going to run them out of town don't you think the Jets coach is doomed yeah it's it's it's classic Jets right you know you go put yourself out of the playoff really early in the season then you kind of start to turn it around so that you make sure you get a really marginal draft pick right now I'd like to see him lose lose out get a great draft pick but now Michael Bates going to turn it around with a few games we're going to be bent a little pack we're going to get some linemen who may or may not be there a year should be all throw away games at this point go for the seller get that draft pick rebuild get a quarterback that's it killer Chris at a stampers looking really really good that's the red shirt freshman should take over the Stanford program but that's a whole nother story Terry this is coming on really appreciate it you're super busy you're on leading leading the charge just put the final word in what's the bumper sticker for this show this year if you had to put it on the on the car what's the main thing I think there's two I said earlier it's ease of use and its ecosystem so we're launching all these new services to make it easier for customers to adopt mission critical enterprise applications and we're really focused on enabling the ecosystem to to play and what has become in a massive opportunity and we're just getting started what are you doing in the market you're doing anything like any programs you want to share with folks out there you're doing like events you're out in the field doing tours what's what are you doing to gin up the action I'd be remiss to say that I think the most exciting thing I've done this year is the global expansion I mean the innovation in the expansion we're seeing in India and Australia and Germany which we just launched two weeks ago and Brazil and Latin America and they are across the Middle East and Israel I mean this is really a good China too is a lot of innovation in China absolutely and I mean yeah that's really the this is really a massive global play and I think that the thing I love about what I've seen in the ecosystem is you get a small company that starts in Japan and all of a sudden they have a global business overnight well the germany is a nice feather in your cap for the company because Ireland just wasn't cutting it in the EU with the germany kind of having their own little little inside baseball there but it's a nice footprint now absolutely full data center there absolutely so you know for customers who had concerns around data localization and data privacy laws I mean that addresses that it also gives us a much more infrastructure and expanded footprint lower latency in continental Europe alright Terry wise here inside the cube always bringing the A game we're bringing the signal to you here live in Las Vegas for Amazon reinventing the cube I'm John Furrier with Stu Miniman we'll be right back after this short break thanks guys