Amazon’s plans for Australian telcos

By Petroc Wilton

Amazon Web Services ANZ MD Paul Migliorini is looking to telcos as a key part of his plans for local growth, alongside large corporates and a surging startup sector. And while AWS itself may be facing increasing competition in the cloud space, Migliorini is Confident that the firm’s growing geographic coverage, rapidly expanding portfolio of services and established base of trust will keep it ahead of the pack.

Migliorini – himself a veteran of the telco space, having previously served as national and then region-al MD for BT locally – told CommsDay that AWS was working with telcos in a number of separate ways. The first is partnering to help the telcos serve their own customers, particularly as carriers offer more managed services and start to focus on soft-ware-defined, AI and machine learning products – areas in which AWS itself is investing.

“More and more, what we’re seeing is telcos investing in capabilities to help customers transform; to migrate and then transform their infrastructure… because telcos are running their core infrastructure today, they usually have some level of responsibility for security, and so folding your compute infrastructure into that makes meaningful sense,” he said. “Telstra is an example; they’re building an integrated proposition that they can then take to their customers to help them do that.”

“[For instance] Visy, which is a long-term Telstra customer [has] an agenda where they want to transform and modernise [by taking] cost out, and the other thing is they’ve got an interesting innovation agenda based around robotics and automation, a range of things they want to do to transform their manufacturing operations,” continued Migliorini. “For us it was [a case of] first migrating all their applications off their infrastructure, we’re most of the way through that… and then it was a question of how they accelerated their innovation from there, what capabilities could they then take natively off the [AWS] platform and bundle with things they wanted to put inside their organisation to move more quickly.”

“This partnering context is an important one; we’re doing a similar thing with Optus as well, there’s a range of customers we’re working on together there, and it seems that customers are looking for us to build an integrated proposition for them.”

The second strand of AWS’ telco play is helping the carriers themselves to transform.

“Increasingly what we’re seeing is telcos, like most big enterprises, trying to drive greater innovation and remediate ‘tech debt’… we’re seeing all the major telcos trying to solve the same types of problems in fairly similar ways, and we’re working with a lot of them in that vein,” said the AWS ANZ MD.

“The third context to it is, as a lot of the telcos provide the underlying infrastructure on the networking [side] to support customers, things like Direct Connect become important to help customers with their connectivity requirements as well.”

Broader ANZ plans

Migliorini is focusing his ANZ efforts across a whole range of customers and partners. “There’s tens of thousands of customers built on the platform here, and that crosses the full spectrum of customers – our largest corporate and multinationals, most of the big banks, people like Qantas and Telstra. We’re seeing significant adoption in the public sector as well with Australia Post, the Australian Tax Office, those sorts of organisations,” he said. “But what we’re also seeing is some really interesting software and technology companies that are doing interesting things here.

Atlassian, obviously; [firms] like Xero, like MYOB, those sorts of organisations.” “In the broader enterprise conversations, we’re seeing a pretty significant acceleration of the migration of traditional and core enterprise systems… I think what’s happening at the moment is that organisations that are carrying more legacy have realised that bi-modal isn’t necessarily a concept that’s relevant anymore, that if you’re going to transform and be relevant in the long term you need to transform at the core. Which means you need to both innovate and remove friction associated with legacy. And we’re seeing that vector being played out pretty significantly.”

“[We’re also seeing] a big acceleration in startup activity as well; A$2.4 billion of net incremental investment into startups in the last 24 months. And we’re really lucky that a good proportion of Australian startups build on us.”

Competitive confidence

While Migliorini acknowledges an influx of new competition for AWS into the ANZ market, he remains unruffled. “We don’t worry too much about it; we think that this isn’t a winner-takes-all scenario here,” he said.

“But importantly, the things that seem to matter to customers are… firstly that they’re looking for depth of capability, and at the moment we’ve got by far and away the broadest portfolio of offerings.”

“The second thing they’re keen to see is they’re looking for someone they can trust who will continue to iterate on their behalf over the long term,” he continued, adding that AWS was ramping up its arsenal of new features and services largely in response to customer demand; the firm brought in 1,017 of these last year, compared to 516 in 2014. “The third thing is… you start to see the scale of the platform grow, with millions of customers. We’ve launched several new regions this year, we’ve now got 16 regions comprised usually of two or more Availability Zones, and within each [of those] there could be several datacentres, so the scale of the infrastructure’s growing both in terms of capacity – the AWS cloud now has several times the capacity of the next 14 providers together – [and] accelerating the geographic reach of the platform.”

“The other thing we hear from customers is that trust is a really important [element]. The fact that we pioneered the as-a-service model around cloud, and that over the 11 years we’ve been around we’ve reduced prices 59 times – and much of that was against the backdrop of little or no competition – customers have said ‘ we’ve developed a good level of trust; we trust that you’ve developed a good level of pricing, we trust that you’re going to continue to release new features.’ That’s kind of the way we’re thinking about it, and as long as we continue to do the right thing by customers, with a bit of luck they’ll continue to trust… and put their services on us!”

(This article first appeared in www.commsday.com)