Partnering with AWS Is Like Partnering with the Internet — Here's What That Actually Means

[00:00:00]I said, "AWS is not a channel." I said, "My CRO now gets on his on his like TBRs and says, 'No, I don't expect source business from AWS.'" And he's like he's like, "I need more of you." And I was like, "Look, you're not a channel, you're not a this, you're not a that."

[00:00:13]And he's like, "I know. Every like that's where partners get it wrong."

[00:00:16]He's like, "I wish more partners were like you guys." And I said, "It's Look, it's not perfect, but I have to explain to them" he likes my analogy, right? I said, "This is Hunger Games. Like this is season four of Hunger Games."

[00:00:28]>> is a new analogy. I haven't heard it.

[00:00:29]So, I haven't heard that.

[00:00:30]>> Oh, you haven't heard this one? I've been calling I've been calling AWS I have two analogies for you, by the way.

[00:00:35]Well, the other one I stole and I'm going to owe someone like a bunch of I'll put it on camera. But, the first is in the Hunger Games book and movie. I never read the books, but it's there's the game maker, right? Like this is the game and the rules are constructed by the game maker. And so, me as a partner, I'm not capable of rewriting I I can't tell the game maker I don't like these rules. I don't want to play. This is the game. These are the rules. And then as you fast forward to every movie, right?

[00:01:04]It's like, "Oh, this is the next season of the Hunger Games." And every year there is new rules. And we are in this evolution of the Hunger Games with cloud partners and AWS. And every year the rules kind of change. And this year there's less people to manage as many or more partners. And the technology they're going to be all in with agents and agentic and AI. And so, you're seeing that. And the company as a whole had to invest in infrastructure and agentic forward. And so, in replace of that is you can't have as many people.

[00:01:44]Yeah. Like you're a public company.

[00:01:46]Dollars and cents, your margins are in clear text. You needed to spend 200 whatever billion dollars of capital.

[00:01:54]Sure, I guess think a loan, but truth is like, yeah, you got to keep people, right? And now maybe the agent can do a lot of the work of people. Yeah, it's a crazy times. Anyhow, Hunger Games. Yeah.

[00:02:06]>> Hunger Games. So, what's the second one?

[00:02:08]>> Second one. I will not disclose who told me this, but I was like, holy that is the best analogy I've ever heard. And he said, "Partnering with Amazon is kind of like partnering with the internet."

[00:02:21]And I was like, he said, "As a company, you know you need to do it, but how do you partner with the internet? And what do you expect back in return for partnering with the internet?" And so then I've been taking it a little bit further, which is well, really me as a partner representing Kong is I'm trying to figure out how to do SEO, search engine optimization. So, the truth is, well, what does partnering with the internet mean? Oh, well, I probably need a website. It needs to say maybe who we are, what we do. But if you think about it, those search engines and the crawlers are crawling for words. Now AI is crawling it for data.

[00:03:01]So, if I had to think about, well, if now I'm partnering with the internet, let's say the internet is AWS. Like, I can't I don't really expect anything in return from the internet. It doesn't work that way, but I know I need to do it. But I can't promise you what I'm going to get in return. Maybe I get some visibility, right? Maybe someone fills out a web form. In this case, maybe someone comes to my marketplace listing.

[00:03:24]Like this morning, I see it every day, signs up for our PLG, our free trial, right? Through the marketplace. Oh, great. Cool, that's fun to see. But what do you get back in return? How do you put a forecast? How do you measure this stuff? What's the real thing? But now I'm starting to unpack this where, hey, there's all these agents. Hey, there's less people. Hey, there's SEO to agentic. Oh, man, there's you know the things, partner matching engine, agentic this. Cool, what corpus of data are they looking at about comp?

[00:03:56]>> Yeah.

[00:03:57]>> So, now I'm reverse engineering like, hey, if I'm an AWS employee and I'm using Quick every day and I'm asking it questions or I'm looking at the data, cool, what are all of its connectors?

[00:04:06]Forget skills, but what is it connecting to? So, I'm thinking through AWS and the partnership and I'm trying to reverse engineer, where is it getting its data?

[00:04:15]And then what are the sales reps doing?

[00:04:18]What are the essays doing? What are the P essays doing? What is that corpus of data that if I want them to show up as the top listings for these things, just like SEO, what does the data have to say? Where does it have to be? What are the keywords? The same thing. So, I'm I've been thinking through the analogy of that. I was like, yeah, that actually is a little bit of a fair analogy, right? Like, I start a business, what's the one of the first things I do? I go get a domain, I go register the website, I write an about me. Maybe it's e-commerce, that's PLG, like it actually works really well. And then I'm like, oh man, well now like agents and search, this internal search is I may not come up in the right things, the right scoreboards, the right scoring. So, it goes back into, all right, well, if you want to be a partner, if you want to be a top partner, this is the stuff that you have to get. No, no, P P to B and partner, that data doesn't mean as much or almost anything to me. Now, I sell it internally different because I'm I have an agenda. But if someone tells me, oh, their P to B was high or their engagement score is high, you know what that really means?

[00:05:30]>> They bought >> Means they bought through the marketplace.

[00:05:33]Do you really think my sales team or my executives care if someone bought something through the marketplace? No, zero. But there's some hidden signals through that. Why would a company buy through the marketplace? They probably have a PPA, right? Or before an EDP. Why would they do that? Well, because if I have a PPA, there's only two ways that I get to use that commitment. I buy AWS native services or I buy solutions through the marketplace that are built on AWS. That's it. So, I look at this stuff, you know, my analogy of the credit card and I'm staring at a Starbucks over here.

[00:06:09]>> Yeah.

[00:06:10]>> It's I have a prepaid Amazon gift card.

[00:06:13]I can't go to Nordstrom's and buy clothes with my prepaid Amazon gift card. No, you go to Amazon and you can buy things on Amazon. So, if I am a merchant and I don't sell through Amazon, it doesn't mean like it just means that I can't use that prepaid gift card through that channel. This stuff is not rocket science. It's just But internally, I have to explain to my sales team like this signal means What does it probably mean? Well, probably means that the customer has a commit.

[00:06:46]Probably means that the customer already buys other things through AWS, which means it validates that they have AWS infrastructure. Like we don't even need to I know the data before we know the company cuz I get that account data before I we're even have opportunities in an account. Then, well, what else?

[00:07:04]Well, let's just assume that AWS account manager knows more about that company than we do. Can we safely assume that?

[00:07:11]Can we Can we safely assume they probably have friends or champions at that account and we don't cuz it's not even a prospect of ours. We may not even have an opportunity there or if we do, maybe it's early stage. So, I'm trying to convince our company to want to co-sell, to lean into the partnership, to permit me to just share this thing over there, but what they want that introduction and the stage one opportunity. I'm like, we That's not how it works and we have no earning the right to do that. Here's how I explain it as well to my own company. Why would a referral partner reseller go do that immediately? So the AWS reps like, "Ah, I just said nice things about you guys."

[00:07:50]Yeah, even better an essay does it.

[00:07:52]Essays aren't in salesforce, they're not even they would have to then go tell the account manager the account manager like none of that's going to happen. But the most powerful recommendation is from an essay. So then just So how I explain it is okay, well think about a VAR. A VAR is going to register the deal immediately. Why? Because they're blocking out any other VAR.

[00:08:12]>> Yeah.

[00:08:13]>> From registering that Oh, these guys might need calm. Cool, I'm going to go register it with calm. With the new splash they're going to register it with two of my competitors, too. Right?

[00:08:21]Because they're partnered with everyone.

[00:08:22]Second, they get margin or discount.

[00:08:25]>> Yeah.

[00:08:26]>> They're personally incentivized. Think of the behavior of a sales rep at a VAR.

[00:08:30]Do you know how that how some of them get paid? Do you know how they get paid?

[00:08:33]Read the comp plan of a reseller. What is it What is it that they get paid off of?

[00:08:37]>> Margin and a number as well, Noman.

[00:08:39]>> Gross profit.

[00:08:40]>> Yeah.

[00:08:41]>> Margin. Do you That's literally how they make their living, pay for their food on the table, kids clothing is on GP on gross profit. Of course they're going to register the deal. Of course that's how they get paid. That's how they keep a job. That's how they put food on the table. And there's a bunch of VARs that all partner with different companies. So like, yeah, they're all going to get there first, block out. So they're they're incentivized to do that. Let's reverse that with AWS. Does AWS have any goals for Aitos or for calling Aitos?

[00:09:11]No. Does that rep get paid margin, revenue, anything?

[00:09:17]>> No.

[00:09:17]>> Okay, my SIs well, some of them don't even care about the referral. They just want all the services, you know, they want to turn all the wrenches behind them. Okay, well, does AWS have a practice? Do they Do they implement Do they have professional services that implement our technology? No, there's no dollars there, either. And if there were, then the sales team probably couldn't resell it, so it's not insignificant. Okay, so then marketplace. Is marketplace AWS customer's decision, an AWS decision, customer's decision, or Kong's decision?

[00:09:48]>> Customer's decision.

[00:09:49]>> Yeah.

[00:09:50]>> So, if I'm a sales representative, yes, I I still don't have any guarantees that I'm going to get paid on that because it's ultimately the customer's decision. I can educate them, maybe we can throw some credits or something, like tactics, but man, if they if they have a $1 million PPA and they're spending $1.2 million a year, maybe they just don't and they're like, "I don't see the benefit right now."

[00:10:10]>> But I also think it's the level of people that are out there that don't get it, and they get it for they get sometimes the the basic, the interaction with the ISV and the hyperscaler, and a little bit about customer, but they don't get that in next level. And a lot of the time it's about the having been a salesperson, having been engaged in pre-sales. They just don't join up the dots. Does that make sense? So, it's very much, "Oh, yes, I'm just doing A and B." And as we've talked about in the past, it's we're actually we understand the whole business. You need to understand the whole business to be able to actually play not only play the the rules of Hunger Games, but also play the rules internally within the company that you're you're either working for, contracting with, whatever. So.

[00:11:06]>> I think that's what I was describing when I said just the first 9 months of figuring out the people, the politics, power structure, how decisions are made.

[00:11:14]I always look, like, who's running the business? Is it the CEO, the CRO, the CFO? Like, who's got more? It's all in harmony. Then board. I've seen boards run companies. I've seen boards be pretty out of the company, like all kinds of things, very different.

[00:11:33]>> Yeah.

[00:11:33]>> And I think that's that's a key thing, right? That's the key thing.

[00:11:37]>> Yeah. Yeah, it is kind of funny. It's a Again, it's just like an interesting and there's a lot of companies. I think you and I we should just at some point, what are the metrics that matter? What are the right metrics? I know what I've gravitated to lately is I'm linking co-sell to win rate and deal size. I've tried to link co-sell to like speed, like, progress deal progression. It's just sales forces are too dirty. My sales team is too smart, you know, they open and close deals, they move things around in stages, they're just too crafty. So, the data you could throw out outliers or whatever, it's just I don't >> Yeah.

[00:12:20]>> I can't I can't get to a good, but right now I can see that where we're co-selling, our win rates are higher.

[00:12:28]But, the baffling thing to me is that if I show the data, I always say, "Argue with me all you want. It's really hard to argue with the data."

[00:12:37]But, I can show my sales team the data and I don't know if they don't believe me or what, but I would see that data and go, "Wait, you're telling me that by talking to AWS and having them share data and help influence an opportunity, like, my win rate almost doubles?" I would come running with my pipeline.

[00:12:57]>> No, you you've missed So, I >> I'm missing something.

[00:13:00]>> Yeah, so it's ego. Because basically, I'm saying you're saying to me that this win isn't down to me completely, it's actually I'm giving power away to someone and that company, that entity, that partner is actually taking over and accelerating the opportunity. So, there has to be a spin on it that this is all down to you, get a sales guy. This is all down to you leveraging all your tools. You found the right >> Yeah. Yeah. Yeah.

[00:13:34]>> But some some reps are like, "No, no, no, no. I >> But this is my point. The 20% or 10% in the company that are the best reps, all they are, I always say forget the game maker. It's the other game I like to talk about is chess. Like the best sales people I've ever seen, they're not great they don't have to be great chess players, but the game of sales they're playing is like chess.

[00:13:56]>> Yeah.

[00:13:57]>> There's pawns, there's a rook, there's a queen, there's knights. Each player moves differently. So when I'm building that strategic deal, why do I move the pawn? Why do I do this? Why do I They're using the entire company at the right time at the right place to go win.

[00:14:17]>> Yeah.

[00:14:17]>> I'm just one of those I always say like like you're the sales rep. You got this God, I'm the analogy king. You're You got this tool belt on, right? In the tool belt there's a hammer, a screwdriver, a wrench. I'm just another tool. Like dude, you're the handyman.

[00:14:33]I'm just this tool right here and this tool there's a bunch of things that it can do. I can use credits to help you accelerate and do a help you with why now, help you with timing, manufacturing timing. We can use co-sell to do this, we can do that. Again, you can lay that into med pick and I can start filling in decision criterion paper pro you know, I can start playing that game too. But at the end of the day like either you're playing chess you're a handyman. You got You know, when do you use a screwdriver versus the hammer? Like yeah, they have different purposes. So if I need to go build a house, like I need all these tools to build a house, but like when's the right time and what do I use this and that for? Cuz a sales rep at the end of the day sees me as an a resource.

[00:15:16]They're going to use me. And that's what I'm offering. Yeah, use me. I'm I'm the screwdriver. This this the screwdriver does. This is when you need it.

[00:15:23]>> You're the electric screwdriver, and that's the whole point.

[00:15:25]>> Even better. Yeah. But >> So you're you're the one thing that can speed up like certain parts of building that house with the electric screwdriver. So that's also me what you do. You've got your your manual tools, but by the way, one part, the paper process, procurement, this is the electric screwdriver.

[00:15:45]>> Like that's terrific. That's the number one signal, marketplace growth year over year.

[00:15:50]>> Yeah, I've got a potential contract.

[00:15:53]>> consumption, that kind of too.

[00:15:56]>> I've got a potential >> don't see that stuff.

[00:15:57]>> I've got a potential customer who literally wants to go from 25 million to 100 million by the end of this year through marketing.

[00:16:07]>> And spend or marketplace?

[00:16:08]>> Yeah, yeah, marketplace.

[00:16:10]>> Yeah. So they already have that revenue volume.

[00:16:13]>> Yeah, but they haven't even switched on Co-Sell. They're not They're just yet.

[00:16:17]>> But why would they like I'm now Now I'm curious. Why would they want to do that?

[00:16:21]Why Why do they want to do that?

[00:16:23]>> It's a good question. I have a follow-up call on Thursday.

[00:16:25]>> Yeah. I always I love hearing that, and I always say, "Dude, that's great. Why?

[00:16:31]Why? Why?" Because what I find out is they like look, if they start to link that we want to do that because we think we're going to get more from them. I'm like, "You may not." Like that I That's a bet. You will get visibility, you might get more awareness. I This is the currency to go like how currency to go get more things, but it it's not it There isn't a give and get lever that you pull. If I do this, then I get that.

[00:16:59]There These are not It doesn't work that way.

[00:17:02]>> Like from from my perspective, depending on I don't know their numbers. They haven't I've got to sign an NDA. But if I have a look at let's say, I don't know how much money they're actually generating right now. If they want to put it through the marketplace, and they're very much a partner-driven business. Then the average margin for channel most definitely is around 15 points. So, if I can if I can >> 20 20 to 30 >> 20 to 30. So, if I can reduce that and if I've got a mindset of okay, well, we're going to double down on AWS Marketplace.

[00:17:36]>> I would say it's the cheapest channel.

[00:17:38]>> There we are.

[00:17:39]>> If you want to treat them if you want to treat it like a channel, newsflash, it's the cheapest channel. Co-sell is free.

[00:17:45]Marketplaces is 3% >> Yeah. So, >> And if you want to include a disty or a CPPO, another half a percent. I mean, like it's not a lot. It's not like it's double taxes, but it's not that much and and the facilities exist to make everyone happy.

[00:18:02]>> So, let's say it's 5% you know, versus 15 plus points. So, you can save at least 10 if not 10 15 points on flipping a switch. So, that that would be my logic to it, anyway.