Amazon Web Services held its third annual re:Invent conference in mid-November, and while there were plenty of new tools and services for developers, this was the year AWS showed it's now fluent in the language of the enterprise IT buyer.

There is now a center of gravity around AWS that makes it impossible for enterprises—and, by extension, enterprise solution providers—to ignore. In a press conference at re:Invent, Andy Jassy, senior vice president of AWS, said the company now has more than 1 million active customers using its cloud. AWS is growing revenue at more than 40 percent year over year, which makes AWS the "world's fastest-growing enterprise IT company," he said.

Jassy has said his boss, Amazon CEO Jeff Bezos, is "very excited" and optimistic that AWS eventually could become the company's biggest moneymaker. That's a bold statement considering that Amazon generates some $70 billion annually from its retail business.

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AWS clearly has learned a ton about using the cloud to run IT more efficiently, and now it's using this knowledge to go after traditional enterprise vendors. At re:Invent, AWS took a shot at Oracle's database cash cow by launching Aurora, a MySQLcompatible relational database engine it claims is faster than existing offerings at one-tenth the cost.

AWS executives also tried to show attendees that enterprises are using its cloud to handle mission-critical functions, as opposed to just testing and developing software. A parade of enterprise executives appeared on stage during the keynotes, including leaders from Coca-Cola, Condé Nast, Major League Baseball, Intuit and Splunk, to talk about how they've moved parts—or in some cases, all—of their on-premise computing to the AWS cloud and never looked back.

While not everything Amazon does is a success —the Fire smartphone is a notable example— AWS is one big gamble that did pay off, Bezos said at Business Insider's annual Ignition conference earlier this month.

Bezos said it's vitally important for companies to take chances on projects that might not work out, noting that these can be great learning experiences.

"Companies that don't continue to experiment, that don't embrace failure" often run into problems later on, Bezos said at the conference according to media reports.

The momentum AWS is seeing could be why the company isn't worrying about competitors Google and Microsoft, which have decided to compete with AWS by trying to undercut it on pricing. "If you look at the amount of functionality, the number of services, and the features within those services, we have a lot more functionality in our platform than any other provider," Jassy said in a Q&A at the conference.

But while AWS has a large and active partner ecosystem, traditional enterprise solution providers—the types that partner with vendors such as Hewlett-Packard, Cisco Systems, IBM and Oracle—haven't really embraced AWS en masse.

This is the case for a number of reasons. Many traditional solution providers are still making lots of money selling private clouds, and they haven't made the skills investment in hiring public cloud services and consulting expertise. There's also a belief in some circles that working with AWS amounts to a betrayal of enterprise vendor partners, some of which used to try and steer them away from AWS.

But judging from the action at re:Invent, and the fusillade of new products and services that came out of the show, there are some traditional solution providers that have decided they can no longer afford to ignore AWS. The thinking, according to some of these partners, is that AWS has grown so large and diverse that they have little choice but to work with it.

Next: 'The reality Is That AWS Is Everywhere'

"The reality is that AWS is everywhere. They are a fact of life at this point," Mike Strohl, CEO of Entisys Solutions, a Concord, Calif.-based solution provider and AWS partner, told CRN.

Entisys just recently launched a formal partnership with AWS and, while it's still early days, Strohl is impressed with what he's seen so far from the vendor. "They are open to a reseller model, and they are definitely engagement-focused," Strohl said.

Terry Wise, AWS' director of business development, told CRN in an interview at re:Invent that the vendor intends to more than double its investment in partners in the coming year. In typical AWS fashion, Wise declined to say how much the vendor is currently investing in partners, but he did say that AWS made a "substantial" investment in the channel in 2014.

"This is something that, a few years ago, was pretty small," Wise said of AWS' channel investment. "The channel is becoming super important in this space."

Entisys is starting out with a modest plan to resell AWS services and get recurring revenue and include AWS services in the solutions it develops for customers, Strohl said.

"We're not going to tell customers to move everything into AWS. But if you enable customers to do more to strategically deploy cloud services, you put yourself in position to create more value around it," said Strohl. "If we didn't include them in our portfolio, we would be limiting our offering for customers."

Entisys is an example of a traditional solution provider that is making the shift to working with AWS, and Wise said there are plenty of other examples of ones that have benefited from doing so. "It's definitely a trend we're seeing. There are a number of partners in the AWS ecosystem that fit this profile," Wise said.

Slalom Consulting, a Seattle-based firm with a large Microsoft practice, has been an AWS partner since 2009. At the time, Slalom used AWS block storage for clients that were launching mobile content and needed a place to store it, Garret Carlson, director of strategic alliances at Slalom Consulting, a Seattlebased AWS partner, told CRN.

Since then, Slalom—whose business is focused on custom application development, big data and migrating Microsoft workloads to the public cloud — has adopted many of the new toolsets AWS regularly rolls out, Carlson said.

"What they provide helps our business because it provides the foundation for what we do best, which is to help clients with strategic and complicated problems," Carlson said. "AWS is one stable piece of the puzzle that you don't have to worry about."

Next: Dangling Carrots To The Channel

Now, the challenge for AWS will be convincing more would-be partners to take the leap. Managed service providers have long been a target, and at re:Invent, AWS launched a formal MSP program in which partners get specialized technical support, training and marketing assistance.

AWS is hoping that the new program will bring in some much-needed expertise. "We don't have enough partners in the ecosystem that really understand and can deliver cloud managed services," Wise told CRN. "Everybody has been taking a traditional approach, but they're missing things like orchestration, automation and the whole concept of DevOps."

Alan Dumas, president of Accunet Solutions, a Boston-based solution provider, has met with AWS a couple of times recently about becoming a partner. "You can't ignore it," Dumas said of AWS. "Many of our customers are either using AWS or considering it, so we have to have some strategy around it."

Some of Dumas' customers are using AWS for compute and primary and backup storage. Others are using it for archiving. His biggest vertical is life sciences, where cloud is always part of the discussion.

"We're looking more to build around cloud solutions—such as AWS as part of an overall solution. If we're building a data center or private cloud, we'd like to say, 'Here's your on-premise production data, archive it, and let's move some of that to the cloud,'" said Dumas.

Even partners that compete in some ways with AWS have found ways to work with the public cloud giant. TekLinks, a Birmingham, Ala.-based managed service provider, owns three data centers and might not seem a logical candidate to work with AWS, but is seriously considering it.

David Powell, vice president at TekLinks, told CRN his company is looking at AWS as a place to move some of its workloads to free up more computing power in its data centers. TekLinks is using AWS to build solutions that wouldn't be possible on its own infrastructure, such as archiving data for health-care customers. Powell said Teklinks also does some consulting work with AWS, and its field engineering teams provide services to build solutions for customers.

"AWS services are a little intimidating, so there's room for us to guide customers," Powell said. "Enterprises with a developer staff can figure out AWS on their own, but in the medium-size business segment and down, that's an opportunity for us to do consulting, or add services to an AWS-based solution."

TekLinks is still early on in the process of partnering with AWS, but Powell says there are clear opportunities.

"We view AWS as a potential to add more value to what we're doing, and add value to our services portfolio. And to give a home to some services that could add elasticity to our gear," Powell said.

Next: The Big Roadblock

"There's really no value I could provide to someone who wants to go to AWS," an executive from one enterprise solution provider told CRN. "With AWS, I have no ability to maintain that client long term. They can go direct and I'm left with nothing. "I don't know why anyone would even want to do business with Amazon. It's a lot of wasted effort to get a little bit of profit, and you're not guaranteed to get that profit," said the source, who requested anonymity because he's not authorized to speak publicly on company matters.

Another source—the CEO for one of the largest system integrators in the country—doesn't hide his disdain for solution providers that are cozying up to AWS. The way he sees it, these companies are currying favor with a vendor whose ambition is to crush them.

"I see Amazon Web Services as a significant threat to folks like us," said the CEO. "It's a generic plug in the wall. I am not going to do anything to make them more successful. I don't understand why it is so difficult for people to stand up for their principles and their business. Some people are acting like they are a friend. But if you spin this out to its logical conclusion, they are coming for us."

The CEO, who did not want to be identified, compared the AWS pitch in the enterprise sales trenches to Budweiser competing against a high-end craft beer. "Not everyone has a taste for Budweiser," he said. "There are people who pay a little more for a different value proposition."

The CEO says he sees financial pressure mounting on Amazon, which posted a $437 million loss for its third fiscal quarter ended Sept. 30. "Bezos is all over the place from gasoline to groceries," said the CEO. "I see them as a delivery service marketing company."

That leaves a big opening for solution providers bringing in more robust hybrid cloud solutions from the likes of Cisco and VMware, he said.

As a Cisco partner, he said, he is ready to battle AWS for every enterprise workload with Cisco's Intercloud offering. Intercloud Fabric, Cisco's technology for connecting different clouds, began shipping in September.

Next: 'Start Establishing Relationships With Solution Providers'

Intercloud now includes 250 data centers in 50 countries with a formal Authorized Technology Provider program for solution providers. The diverse partner ecosystem includes VARs, system integrators, aggregators, distributors, ISVs and a number of cloud service providers that complement Cisco's own infrastructure hosting services.

"Amazon's approach is the generic low-cost volume way," the CEO said. "It is kind of standardized and you can have it any way you want—as long as it is black. Cisco's approach is different. They want to influence and control the protocol and the network that allows everything to flow. Amazon is just an aggregator. They are applying the same logic to compute that they applied to books or anything else."

Even some solution providers with existing partnerships with AWS aren't thrilled about the relationship. One AWS partner, who uses its public cloud in a hybrid cloud demo shown regularly to customers, said his AWS partnership has never generated much revenue, and he's not optimistic about its future.

"In general I have my concerns about Amazon as a company," said the source. "They have a service provider model that's losing a ton of money. They're always building for capacity, but if you look at the telcos that have done that, the people never came, in most cases."

The source said he's also not been impressed with AWS as a partner, which is something he believes could slow AWS' charge into the enterprise market.

"If they want to get a footprint there, they should start establishing relationships with solution providers," said the source. "If they came to me and said, 'We're serious about doing a channel program, and are putting 100 percent behind it,' I would take a hard look at it."

STEVEN BURKE contributed to this story.