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Amazon, Cloud Partners Clash, with an inner inquiry about customer concerns

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  • AWS has launched an investigation following AWS salespeople allege intrusion into partner customer data.
  • An inner report shows that cloud partner 2nd Watch has accused AWS of arresting its client AIG.
  • AWS has created unused “subscription rules” for its partner sales pool to decrease oppose with partners.

When Amazon Web Services received a pricing inquiry from Farmers Insurance final year about data storage service Redshift, the cloud giant reached out to its primary competitor, Snowflake.

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Farmers Insurance at the time was a joint customer that used Snowflake’s data warehousing product on top of the AWS cloud infrastructure. Given Snowflake’s dual role – it competes with Redshift and sells AWS services – AWS felt the need to be transparent about farmers’ demand. Snowflake aired her grievances, however.

“Snowflake was not happy that AWS was discussing a competitive solution, but appreciated that AWS was upfront and sincere about what was going on with their mutual customer,” an AWS employee wrote in an inner report seen by Insider. “The customer decided not to go with Redshift and continued with Snowflake.”

This ring is emblematic of the increasingly fine line that Amazon must walk as it looks to grow its partner network, a group of more than 100,000 companies that sell and implement AWS products and services. These partners include software makers like Snowflake, who bundle their products with AWS cloud services, and consulting agencies like Accenture, which assemble distinct cloud offerings for clients.

This model is common in the world of business software and is often mutually beneficial. But in the case of Amazon, it has become an uneasy alliance. As AWS pushes to expand its leadership in the cloud and sell more of its software services, this increases the chance of confrontation with partners and customers who are also competitors.

Current and previous AWS employees told Insider that tension between AWS and its partners has been an ongoing issue. One person said that final year Amazon’s cloud unit investigated allegations that AWS sales reps were stealing deals from partners. While AWS strictly prohibits salespeople from scanning inner databases of partner deals, there is still a concern that partner information could leak to other parts of the company, this person said. People added that the leadership is starting to take the matter more seriously, creating stronger protective barriers to try to ensure that AWS does not reach partner customers. They spoke on condition of anonymity to discuss sensitive matters.

“People are rightly scared of Amazon, given its reach and its sheer scale,” said Corey Cowen, chief economist at cloud consultancy Duckbill Group. “You crawl into bed with a dog that was mostly friendly, but you’re never sure.”

An Amazon spokesperson said that AWS “has powerful partnerships,” including with Snowflake.

“While there is sometimes some overlap between AWS services and its partners in product features, these spaces are so big that there is room for many thriving participants – and partners who have powerful customer experiences and persevere to replicate those experiences persevere to prosper,” the spokesperson added. In a statement. A Snowflake representative did not respond to a request for comment.

The veil of customer obsession

Amazon’s complicated relationship with Snowflake is already under the spotlight. Snowflake CEO Frank Slotman said final year that dealing with AWS “can be frustrating, and sometimes confusing, from day to day.” At a comprehensive meeting final year, Andy Gacy, then-CEO of AWS, addressed those concerns, saying he expects Snowflake and Redshift to grow “extremely well” because the market is so big.

It’s not just competing AWS products that frustrate partners. Last year, 2nd Watch, AWS’ “Premier” consulting partner, complained of being “completely left out” from discussions between its customers and AWS representatives, according to an inner AWS report seen by Insider. One such client was the insurance giant AIG. 2nd Watch said AWS sales reps turned AIG into a direct customer to meet their sales quotas and for better control. AWS said at the time that AIG’s chief technology officer wanted to have a direct relationship with AWS “due to a number of support issues” with 2nd Watch, according to the report.

An AWS employee wrote in the inner report: “2W feels that AWS vendors often use the veil of ‘customer obsession’ to justify a direct move when the motivation is often quota compensation or an account control issue.”

An AIG spokesperson declined to comment. A spokesperson for 2nd Watch disputed AWS’ interpretation of her complaint and said the consulting firm continued to have a “collaborative and fruitful working relationship with AWS.”

“It’s no surprise that if a channel is conflicted, it gets emotional sometimes,” 2nd Watch CEO Doug Schneider told Insider. “We have no view that AWS was trying to go behind the scenes to steal our customers.”

Afraid to share customer information

2nd Watch has also raised concerns about AWS sales reps snooping on their customers’ data, according to the inner report. AWS uses a Salesforce program called ACE, short for AWS Customer Engagement, in which partners share potential or ongoing deals with AWS employees. The ACE is internally called “Little Salesforce” because it is used by partners, while the AWS Direct Sales Reps tool is called “Big Salesforce,” one person said. 2nd Watch said it was concerned that AWS sales reps could see and use ACE data to turn their customers into direct AWS customers — even though there is a firewall that prevents sales reps from accessing this information.

An inner AWS report stated that some 2nd Watch sales reps “are scared to offer opportunities at ACE for fear that AWS will take them directly within 6 months.”

This tension has become so bad that AWS created unused “partners and sales engagement rules” final year. The rules are meant to formalize the sales process that includes partners and address any ambiguity with seven formal “principles” that must be followed.

“AWS does not currently have a RoE, and our partners expect and require the alike guidelines, transparency, and consistency that they experience with other companies,” said the rules, a copy of which was obtained by Insider. “We believe that establishing official AWS inner rules of engagement and a mechanism to comply with these principles will aid our AWS teams enhance collaboration with our partners.”

The document emerged a few months following a congressional hearing that questioned Amazon over allegations of anticompetitive conduct. The House Antitrust Subcommittee said Amazon employees snooped on the data of third-party merchants in the company’s giant market and used the information to create counterfeit products. Lawmakers have also questioned how AWS uses confidential customer data when making positive business decisions.

“Amazon acknowledges that cloud customers who are also its competitors are wary of using AWS,” the House Subcommittee wrote in a report published in October. “The data that AWS collects on cloud computing customers can provide unique business intelligence, and information that investors, other businesses, and entrepreneurs miss.”

The first principle in the Amazon Engagement Rules document specifically addresses AWS’s concerns about using partner sensitive data to steal deals.

“AWS respects and protects customer and partner information. We obtain customer or partner consent prior sharing their information, do not share private partner information with other partners, and do not use private partner information to compete against them,” First Tenet says. “An example of the behavior we want to forbid: AWS uses partner opportunity information to identify potential customers and develop nested solutions.”

Do you work at Amazon? Contact reporter Eugene Kim via encrypted messaging apps Signal and Telegram (+ 1-650-942-3061) or email (


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