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Channel Conflict, Discrimination, Shake-Ups: What's Going on at AWS? - Channel Futures

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We dig into allegations of direct sales problems, bullying and racism, and explore some personnel changes.

Facing allegations of channel conflict, bullying and racial discrimination, and dealing with some significant personnel changes, Amazon Web Services has a lot going on.

None of these issues comes as huge surprise. As the world’s largest, hungriest public cloud provider, and employer of almost 100,000 people, according to LinkedIn, AWS stands to create tension.

In terms of channel conflict, it’s easy to see how that could happen. AWS moves quickly and pushes its people hard. A hyperfocus on innovation and customer experience can encourage missteps.

When it comes to potential discrimination, the tech world is not known as a paragon of diversity, equality and acceptance. AWS may be forced to lead on that front, should an investigation find the company has not given fair shrift to women and “underrepresented groups.”

And the installment of new top executives – in this case, Adam Selipsky replacing Andy Jassy – often results in staff shake-ups and attrition.

Let’s break down each issue.

Is AWS Really Competing Against Its Partners?

Last week, Business Insider published a piece that claimed AWS’ relations with its cloud partners “are getting incredibly tense.” Citing an internal memo that circulated in late 2020 (although failing to call attention to that date, so the note could seem more recent), the outlet pulled two examples of apparent channel conflict to bolster its claims. BI said Snowflake, the data warehousing giant, and 2nd Watch, a managed service provider, both encountered instances of AWS direct salespeople trying to steal accounts.

AWS, according to the memo, did not have rules of engagement in place to prevent this kind of behavior. As a result, direct salespeople supposedly were attempting to take clients from Snowflake and 2nd Watch.

Or, maybe not so much.

“I think it’s a little bit sensationalism and hyperbole,” 2nd Watch CEO Doug Schneider said of the Business Insider article.

‘This Isn’t Abnormal’

2nd Watch's Doug Schneider

2nd Watch’s Doug Schneider

“We’ve had a longstanding relationship with AWS for 10-plus years and over those 10-plus years, there’ve been times when we’ve had channel conflict just like with any significant vendor partner ecosystem,” Schneider told Channel Futures. “So part of me [thinks], this isn’t abnormal. Some of the accusations in there … we never had that or made those claims. It was more traditional channel conflict going on in the field.”

Channel Futures was unable to interview Snowflake. The company remains in a quiet period ahead of its earnings call later this month. Channel Futures also reached out to other AWS partners for comment. They either did not want to go on the record or did not respond. Should partners speak with us as a result of this article, Channel Futures will run a follow-up.

The channel conflict issue, meanwhile, amounts to …

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Channel Conflict, Discrimination, Shake-Ups: What's Going on at AWS? - Channel Futures
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