AWS Billing and Value Added Reseller Opportunities

Close to the remarkable Spot pricing model announcement, AWS silently started offering Consolidated Billing. For typical AWS user, Consolidated Billing is not a big deal except of the convenience and some cost saving. Consolidated billing dramatically reduces friction for enterprise AWS adoption via., centralized payment, sharing of capital intensive reserved instances etc. In short it is centralization of AWS finance(read beanie) aspect at the same time decentralization of technical( read geek) aspects. More interestingly, AWS Consolidated billing opens up value added reseller opportunities.

Consolidated Billing Illustration

Consolidated Billing centralizes the payment, decentralizes the geek!

What makes value added reseller opportunities possible is the flexible attachment and detachment of the AWS account to any Payment account( the Payment a/c will have to authorize the attachment – of course!). Paving the way for the reseller to leverage the volume discounts from the consolidation:

AWS Volume Discount illustration

Usage of multiple buyers can be consolidated by reseller to realize profits

The dynamic nature of the spot pricing also create opportunity for optimizations – the real ‘value added’ part of the reseller story! Going by the current trend spot prices are at least 50% cheaper on an average!

The arbitrage due to cost saving will not be too high to sustain a profitable business. But the nature of AWS itself – being building blocks rather than complete solutions – lends itself very well to value addition and profitability.
Indian software service providers especially the smaller ones will find these opportunities very attractive. Thus they can get a firm foot hold in the cloud/SaaS space.
The very dynamic and emergent nature of AWS, your valuable value added service being obsoleted by a native AWS offering are some of the risks in the opportunity. On the other hand the simplification and cost saving are compelling reasons enough for the customer to stay with the value added reseller and build lasting relationship.

Thanks for the heads up @guyro
Bonus Links:
AWS: the new Chicago Edison by Nicholas Carr

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About labsji

I blog, Therefore I exist ! Funny things are funny to me. Cool things are cool to me. Innovations tick me. I attempt spirituality religiously :)
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One Response to AWS Billing and Value Added Reseller Opportunities

  1. marius says:

    Great information! You mentioned that “What makes value added reseller opportunities possible is the flexible attachment and detachment of the AWS account to any Payment account”, so this means that in order for a reseller of AWS to be profitable he has to make at least 250K revenue in order to be eligible for the 10% discount? Would it not make more sense to offer some general discounts for all AWS services that an APN partner signs-up?

    I am trying to build my APN practice and am having a tough time getting my head around some of their policies.

    Many thanks!

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