ISV Partnership Programs: Amazon Partner Network (APN)
The AWS Partner Network (APN) brings together cloud software and service providers who collaborate with Amazon Web Services on various operational levels across several business domains. AWS partners can progress to higher performance tiers after completing certain criteria, such as training, customer engagement, and monetary investments and fees, enabling further partner perks. These types of partners include independent software vendors and providers of software as a service, platform as a service, developer and security tools.
APN Technology Partner programs include AWS SaaS Factory Program, AWS Direct Connect Delivery Programs, AWS Device Qualification Program and other programs offered to consulting partners. APN Partner numbers are in the tens of thousands all around the world. APN Partner solutions and services are used by more than 90% of Fortune 100 firms and the majority of Fortune 500 enterprises.
Product Improvement Benefits
AWS offers a set of customizable services that allow businesses to build and deliver products more quickly and reliably at scale by combining AWS with DevOps techniques. Managing infrastructure, deploying software, automating software release procedures, and tracking application and infrastructure effectiveness are all examples of how AWS can improve your product.
A Forrester study that combined size/geo features of five partners to create a single sample composite organization shows that this ‘composite’ organization experienced:
- Reduced time-to-development by 30% to 50% for a minimum viable product
- Reduced time-to-launch by 69 to 77 percent (in net new markets)
- Time-to-customer-usage was cut in some cases by almost 95%. (an ML product built using SageMaker)
Example: IoT Competency
Another example of the product improvement benefits is the IoT Competency, Amazon’s approach to the device-to-device ecosystem that enables partners to accelerate IoT implementations by providing IoT out of the Box through reference integrations.
Revenue Growth Benefits
Implementing SaaS on any cloud, including AWS, moves upfront licensing revenue with annual maintenance to a monthly recurring revenue stream (MRR). In Year 1, many AWS SaaS partners achieved greater gross profit margins than before deploying their software on AWS, having 50% or more from SaaS revenues.
Forrester’s ‘composite’ ISV showed that ISVs SaaS operations can become profitable as early as year 2, showing a 70% return on investment (ROI) and SaaS Gross Margins rising from 55% in Year 1, to 63% in Year 2, towards 70% in Year 3.
The AWS Marketplace is a significant player in driving revenue growth for partners. It is used by a company to market and sell its AWS-approved software solutions. Apart from the benefit of having your product visible in a tech focused market, AWS Marketplace can also increase revenue for a software vendor at lower sales and administrative costs:
- Amazon manages all billing and payment options;
- Product vendors do not need to establish a proprietary billing infrastructure
- Auto-generated delivery and tracking reports for your customers.
- Partners can take advantage of offering free trials without having to invest in infrastructure development
Marketplace example: VMware cloud on AWS
VMware Cloud on AWS helps companies manage the cost of maintaining a stable and efficient hybrid IT infrastructure. Organizations can benefit from expanded VMware functions integrated in their solution, as well as a unified contact point for service and support integration. Four interviews with “VMware Cloud on AWS” customers (found the following revenue growth benefits:
- 46 percent faster migration,
- a 43 percent reduction in overall cost of operation,
- a 479 percent five-year ROI,
- and $9.6 million in total new revenue gained per year
Cost Reduction Benefits
Partners work with AWS to optimize their consumption costs, streamline onboarding processes, and experience more favorable deals with other ecosystem players due to the AWS scale. As a result, profit margins, which take into account cost of revenues such as data hosting, customer onboarding expenses, revenue sharing for leads, and embedded third-party IP, grow over time. In addition, AWS offers any software-as-a-service (SaaS) company assistance through AWS Well-Architected SaaS Lens to be able to analyze costs: SaaS Lens employs best methods for cost optimization and metering tenant consumption, matching to AWS resource usage, and hence computing the cost-per-tenant.
Risk Mitigation Benefits
Cloud providers such as AWS have ongoing certification and compliance testing to prove their competence in preventing and addressing risks for any company that migrated to AWS Cloud. Those risks, including disasters that are either natural, caused by operational activities, caused by security breaches or that are cybersecurity vulnerabilities, can be mitigated by the AWS infrastructure, easing the burden on ISVs. For example, natural disaster or outage risks can be mitigated through AWS’ ability to offer partners duplicate servers at different data center locations.
Read more about ISV partnerships in our next blog posts from this series, and hop on the ISVWorld Platform to find the right ISVs to partner with.
In case you missed our latest post on tech partnerships:
#3 Microsoft Partner Network
#4 Google Cloud Services
#5 Salesforce Commerce Cloud
#6 Oracle Partners
#7 SAP PartnerEdge
#8 Sage Partners
#9 RedHat Partners
#10 Acumatica the Cloud ERP
#11 Twinfield Partners