Partnerships Unraveled
The weekly podcast where we unravel the mysteries of partnerships and channel to help you become more successful.
Partnerships Unraveled
Dr. Alejandro Canonero - Inside the Cloud Wars: AWS vs. Google vs. Microsoft
Building a great product isn’t enough; you need to find your place in the right ecosystem.
This week on Partnerships Unraveled, we sit down with Dr. Alejandro Canonero, a 35-year technology veteran, PhD, and author, to dive deep into the power of ecosystems and why companies fail when they ignore them. With leadership experience at AWS, Google, Oracle, and HP, Alejandro has seen firsthand how tech giants build and scale through partnerships and what happens when they don’t.
- Why AWS struggled to gain enterprise traction before investing in partners
- The biggest mistake SaaS and AI companies make when entering the market
- How understanding ecosystem battlegrounds gives companies a competitive edge
- Why hyperscalers like AWS, Google, and Microsoft dominate cloud partnerships and what it means for vendors
- The operational mistakes that separate high-performing partner programs from failing ones
Alejandro also shares surprising lessons from Ironman training and how endurance sports offer powerful parallels to building long-term channel success.
If you want a masterclass on ecosystem strategy, go-to-market alignment, and the future of partnerships, this episode is packed with insights you won’t want to miss!
Connect with Dr. Alejandro: https://www.linkedin.com/in/canonero/
_________________________
Learn more about Channext 👇
https://channext.com/
Watch on YouTube ►
https://www.youtube.com/@channext
#channelmarketing #channelpartners
Welcome back to Partnerships Unraveled, the podcast where we unravel the mysteries about partnerships, and channel on a weekly basis. My name is Alex Whitford, I'm the VP of Revenue here at Chanix and this week I'm very excited to welcome our special guest Alejandro. How are you doing?
Speaker 1:Nice to be here, Alex. Thank you for having me.
Speaker 2:Yeah, I'm excited. I think this is the first PhD and author that we've had on the podcast, so I think we are actually in the midst of a true expert, which hopefully I'm able to keep up. Maybe, for the uninitiated, you could give us a little bit of an introduction about who you are and what you do oh sure, well, thank you for your kind words.
Speaker 1:I mean, I'm continuously learning and the phd was sort of about learning from people like yourself and many others. It was about gathering information from experts in the field and undocumented, and then I documented in a book. I've been 35 years in this industry in the technology industry ERP, crm, data warehousing, data mining and lately, cloud SaaS and AI ecosystems worked for Google, amazon, hewlett Packard, teradata, oracle and a few others. So I've been learning, making mistakes and learning as I go.
Speaker 2:Awesome. Now you have quite literally authored a book around ecosystems and having an ecosystem-first mindset. What are some of the biggest mistakes that you see companies make when they don't adopt this approach right from the outset?
Speaker 1:Yeah, thank you, alex. That's a wonderful starting point for the dialogue. I mean, I've seen it at the most successful companies in the world. I saw it at the AWS. When I joined they designed the whole offer to go direct to customers and then, when they realized they couldn't get into the enterprise and public sector they didn't work with partners they started to have to patch systems, had to re-educate the sales force to be didn't work with partners. They started to have to patch systems, had to re-educate the sales force to be able to work with partners and had to hire people that would be able to help them build an ecosystem. That created an awful amount of friction with the partner ecosystem, delays in enterprise and government customers to adopt the technology because they didn't have the expertise in-house, and it took a lot of time actually to convince at the time, all the systems integrators at Amazon. Web Services was a good partner to go. I have an example for you.
Speaker 1:In 2015, the European Union released the first ever cloud tender that ever existed and I was creating the partner team for AWS at the time and no one wanted to partner with us.
Speaker 1:A number of partners said yeah, we will go with you to this RFP, yes, yes, but everybody was going with the usual players, including Microsoft.
Speaker 1:Aws was not a contender, despite being the biggest and the most successful cloud provider at the time.
Speaker 1:So it forced me to take the RFP under my arm, go to Rome and talk to high-level executives at Telecom Italia at the time and convince them to work with the best cloud player ever. We ended up winning that RFP and won the first ever cloud tender that was available in the EU, but it took an awful amount of work internally and externally to build the credibility with the incumbents, with the people that were doing business in IT for the last 30 to 50 years, right. So I experienced the same at Google Cloud when I joined them to create the partner ecosystem for the public sector business globally, and it was a nightmare. There are executives that are running go-to-market departments that are not willing to work with partners, and that is absolutely unbelievable. So I experienced firsthand what it is to have to fight internally to show the value that partners bring to the business and also to fight externally to convince partners that you know your technology is good for them and for their customers.
Speaker 2:So not only have you won and done great work with AWS, but you've also played a key role in shaping channel strategies at Google. What are some of the key ecosystem lessons that you took away from those experiences, and how do you maybe apply some of those lessons to SaaS and AI-driven businesses?
Speaker 1:Yeah, thank you, alex. I mean it reinforced my belief that there will always be powerful forces that are driving certain momentum in the market and in the cloud business, it is the big players AWS, microsoft and Google this market. To sell your SaaS or AI technology, you really, really need to consider very carefully the ecosystem that your technology is going to fit in. What value chain are you part of and what ecosystem will you be participating, willingly or unwillingly? If you want to sell to customers, because customers are already buying technology from someone, so you need to know who they are and how you will fit into that ecosystem. So at Google, I saw the power of the brand, how the brand attracted a lot of customers that drove a big pool to bring SIs to work with Google. They didn bring SI to work with Google. They didn't want to work with Google, but customers were asking them I want to work with Google Cloud, I want this communication and collaboration technology. You need to bring it to me.
Speaker 1:So the power of the brand influences a lot of what happens in the market. Of course, same happened with AWS, when they went over the curve and it started to be dominant right. So what I'm learning is that this big friary of new AI companies. They will not succeed stand alone. They need to find an ecosystem where they will play a role, and the same for the SaaS companies that existed and will continue a role, and the same for the SaaS companies that existed and will continue to exist.
Speaker 1:You know, you need to seriously consider where are you going to play, what is your playground and how are you going to fit into it. And start with that ecosystem mindset from day one. As you're outlining what problems you're going to solve to customers, you also need to look at where those customers sit. Know what your ideal customer profile is yeah, of course, but where do they sit in the technology space? Who is serving them or who will be serving them, and how you can be a member of a bigger play. Because, as my book says and that's what I'm trying to convey this is a world of ecosystems. There are players that are in many ecosystems, but they are fighting against each other, sometimes collaborating, but it's a big war. The ecosystem of one is fighting against the ecosystem of another, and for that I build a whole chapter around.
Speaker 2:You know battlefields that are taking place in this world so in in one of the in your book, one of the key battlegrounds shaping that landscape um, can you break down one? What are these battlegrounds and why they matter today for channel leaders?
Speaker 1:sure, sure I mean, um, I try to write a few posts here and there talking about them. And you see it in the news, right, perhaps start with a more shiny agenda. And nvidia, right. You see how much valuation they drive, how much revenue they are driving, and and you see, you, you start to think about a little bit more who they sell to and how they sell to. And they grew and they put themselves into that position because they saw what's going to happen and they developed products that were going to fit that ecosystem, the ecosystem of the cloud platforms. First, who were hosting all the new SaaS software, and now they are hosting or they will be hosting or they will be interacting with AI applications, right. So they knew where the market was going and they crafted a product strategy that will fit that ecosystem goal.
Speaker 1:But you know, the chip manufacturers war for the platform money is evident. You see, intel is restructuring, trying to readapt to where the money is going to come from, and it's from the platforms, right, and the platforms are the biggest purchases of hardware for data centers and the edge. So that's one battleground. In the Second World War, you had the Russian front, the Western front, the African front, the oceans front with the submarines and the ships. There are many battlefields in this war and it's better that you are aware of them, so you know how to play your cards. The chips war for the platform money is one of them.
Speaker 1:The ISVs fight with each other for the platform's attention. It's another one because you have you know, isv software used to be distributed with distributors, resellers and direct, and then the hyperscalers came on board and they launched the marketplaces, some more successful than others. We will say that AWS marketplace is probably 10 years ahead of Google marketplace, but that doesn't matter. They exist and they are there. The ISVs want the attention of the hyperscaler and the money the hyperscaler has and it puts them go to market so they can co-sell with the hyperscaler. It's a big, big fight and there is a big power imbalance between the hyperscalers. So it's a big, big fight and there is a big power imbalance between the hyperscalers and the SaaS. The hyperscalers will choose 20 ISVs that they want to go to market because they are the biggest and they will leave the hyperscalers with a higher commission, but then the rest are struggling to get attention from the account managers, from hyperscalers, from the go-to-market money that the hyperscalers put in, so that's another battlefield. Splunk is fighting with other companies Trend Micro, fortinet, palo Alto and many others are fighting for attention and to become the preferred partner with hyperscalers so that's a second battlefield.
Speaker 1:The ESVs fight for attention and money from the platforms because they have a lot of money to put in. Another battlefield that I see is perhaps less visible for commercial people, but it's the battle for the developer's mindset attention and preference, attention and preference. Aws was very big with the developer community and that provided a solid, very powerful foundation to convince enterprise customers that the technology was sound, that the technology was great. So you need that stakeholder group to be with you. So all the platforms are fighting for the developer's time, because once a developer is set on a technology, they may know about a few others, but they will have a preferred one and they will recommend that technically. So when you're competing in the market, the technical recommendation, the technical envelope, plays a big role in the decision-making of big deals, and you have them there Also to develop new applications on top of the cloud.
Speaker 1:Right? That's what we love about the platform economy is that Uber allowed drivers and passengers to grow and to have more jobs and to have more possibilities to travel with less restriction, from the taxi, the same from Airbnb on accommodation, and the same applies here. If you wanted to develop software in the past, you needed to do it on your own, find finding what platform you're going to do it. Now everything is more streamlined and, in a way, there are a lot of power imbalances, but, I think, allow a lot more people to access the technology and to develop software. That's why the developers are so important for the platforms. So I'll stop there, but I have a few other more battlefields that you know I can.
Speaker 2:I can see in in the world well, one of the the and that's it's excellent to sort of see how these different businesses must compete right and and there certainly is really the spoils of war if you can, if you can put yourself in the primary position and you see companies like AWS who've been so successful over the last few years. Obviously, one of the key areas is that hyperscaler fight right, that fight between AWS, microsoft and Google for cloud dominance. How do you see that shaping channel partnerships over the next five to 10 years?
Speaker 1:Yeah, that's wonderful. Thank you, Alex, because you just mentioned another one of the battlefields that I talked about. Absolutely. So you also see it, which is great, and of course it's obvious they fight for dominance. The platforms fight for dominance and you have Alibaba attacking from the east and you have Oracle choosing to partner, sometimes with Google and another to compete. So IBM is coming up again.
Speaker 1:So there are many players that are trying to become extremely relevant. The positions are a little bit defined by market share for now that could change. But you know they define significant decisions that are made by software developers, by creators of new technology, because if someone is starting with an ecosystem mindset, they will see that they need to belong to some of those three at least or more, or they need to work with one more than another. So what they are creating and some people talk about monopolies or you know very strong power positions there, which are true, are certain and they define how you might need to go to market, regardless if you like it or not. So it's perhaps constraining in some cases the freedom on how technology is developed, but open source continues to be there and is an option for many organizations. You see a lot of governments in the European Union going open source, and that is allowing for another set of alternatives to flourish.
Speaker 2:One of the things that I sort of find fascinating about some of the language that you use and the concepts that you talk about. In terms of this sort of hyper-evolved competition, it requires obviously excellent strategy. Although strategy sometimes I find is overrated, it actually really comes down to the execution. Beyond the strategy, what are some of the overlooked operational factors that separate the high performing partner programs versus the losers in these wars? Partner programs are very intrinsically sometimes the differentiating factor between some of these competing businesses. Where do you see the winners and what are they doing differently?
Speaker 1:Yeah, thank you, alex. I mean I want to start with the most obvious one. That are perhaps obvious for everyone, but we still see them happening and I saw them at Google is a continuous shift of direction. Today we are partnering with GSIs and today we are going to work with distributors. Three months later, we don't work with distributors anymore. We're going to replace them and we're going to work with local systems integrators. The next six months, we are going to work with only these 20 ASVs. The next six months, we need to recruit more ASVs. We need to increase our offering. We need to become the Amazon of the software market.
Speaker 1:So the most basic one and it's very tied to human behavior, not knowledge is the lack of a consistent strategy that is well thought through before and then is fine-tuned. You know big ships, hyperscalers are very big ships. So to turn, you know, you need a lot of time and a lot of effort. And what strikes me the most, and I hate the most, is missed opportunity, because no one is calculating the cost in business, and missed opportunity for not paying attention to doing things right. So that's number one. I saw a lot of shifts in very big companies that you say well, you need to be agile, you need to respond to the market demands. No, not always. There are things that need to be done right and a partner program is one of them. That's number one. The second is changing incentives, another obvious one. You know, today you're compensating for this, another day you're compensating for that. So now, and also, some are copying others. You know Google used to copy a lot AWS. So if AWS was rewarding partners by value that they brought into the opportunity, then they will copy them but not execute in the same way. So you have some copycat problem with the level of detail in the execution.
Speaker 1:The third problem I saw is the lack of thought about the need for solid operational systems in place At AWS and Google. Until very recently, we were managing partner revenue and partner rewards with Excel spreadsheets or sheets from Google, no partner management software in place, no PRM whatsoever. So we said really Really, no, no, we're going to make it in-house. Can we not buy off the shelf and we develop in parallel or fix it? No, no, no, no, we're going to do it ourselves. And there what you're creating is an awful amount of friction with the partners. You can talk to any partners of AWS and Google, they will tell you it's painful to do business with them. Very painful it still is.
Speaker 1:So they have the power of the customer choice and this is another fight. Another battleground is who has the customer choice? Is Accenture who is deciding which is hyperscaler and which ISV? Is Splunk who is deciding which system integrator is implementing them and which cloud they're going to run? Or is AWS, google and Microsoft who are deciding which GSI and which ISV they're going to bring to the table? So that is a fight of forever.
Speaker 1:Right when we were running RFPs, if you answer in RFPs, you have these conglomerates that compete with one another. Right, and whoever has the customer choice has the power to create the team. But this continues to happen. So it depends on who has the customer choice, who has the preference of the customer. If the customer is saying I decide first cloud and then we see I decide first ISV and then we see, oh no, this is my system integrator. So that fight is also about the ground that takes place all the time, where people are trying to get to the higher level of the customer to convince them that what they provide is a defining factor in the implementation of the technology and the value creation that the customer is looking for so maybe, looking ahead then, what do you think will be the biggest shifts in how vendors approach channel in ecosystem partnerships over the next decade?
Speaker 1:Well, what I wish is one thing and it might happen, maybe another. What I wish is that we all learn from all the experts the ones that speak with you, the ones that speak with other experts in the field and do things right, do the basics right. I don't see many people doing the basics right, and those that do it are very, very successful Palo Alto, splunk. There are many few companies that are very good at what they do and they do very well. That would be my aspiration. My other aspiration is that people start having a comprehensive look at the GTM level or higher level in big companies and ecosystem play. Stop the silos right. It is unbelievable at this day and age that we are seeing these fights, the channel conflicts in organizations and the lack of a holistic perspective on how customers must be served, for value for the customer and for value of the members of the ecosystem. What might happen is, I think we're going to continue to stumble.
Speaker 1:Now, ai is a new thing, right, it was cloud not many years ago, 10 years ago, and all the SaaS offerings that came on top of the cloud, and now it's AI. So this is another thing that I always love to talk about is that in big companies, in these companies, people shift to the next shiny thing and keep forgetting about the basics and how we build the foundations for growth. So now everybody's talking about how they're going to deploy the AI tool in this process, in that process, in that process. A little bit of smoke, a little bit of reality. But how are you integrating your partners in this offering? How are you building value for customers in a way that is the least amount of friction possible? There will always be.
Speaker 2:They will always be. I'm putting the proper foundations in place in terms of systems, organizational structure and also rewards for the partners. So one of my favorite things about this podcast is it's an opportunity for me to learn from different people, and I think one of the things that I find most interesting is the lessons that we learn from maybe unusual areas. Um, now, I know you're an iron man coach, uh, someone who spends a lot of time, uh, doing a lot of extensive physical exercise, when iron mans are some of the hardest things that you can do on the planet? What lessons from endurance, sports or those high-pressure environments do you take and apply to channel an ecosystem?
Speaker 1:Yeah, thank you Alex. Yes, I was fortunate enough to have the health and the time to train, to run Ironman races, to raise money for the Children's Tumor Foundation, and people helped me a lot through that. And also scuba diving. I mean both sports scuba diving and Ironman require you to study your stuff. You cannot wing it, none of them In both. Well, in scuba diving, you die for sure if you don't plan your dive and you don't do it alone. You always die with someone else, with your body right, so it is a team effort. And for the Ironman, if you didn't train for three, well, I trained three years for my first Ironman before I did five in a row. So three years preparing and I studied about nutrition. I studied, I learned from the best. I went to a triathlon school. I'm trying to say here is number one you know, okay, if you need to wing it, wing it, but while you wing it, learn, don't keep winging it.
Speaker 1:And I see a lot of people in our industry. You know improvising all the time, please. You know improvising all the time, please. You know there are things that are foundational that we can all do, and then you improvise from that to differentiate yourself. And number two, of course, I vomited when I was doing Ironman Florida because I couldn't. I was running and my stomach couldn't do it anymore. I had some Coca-Cola Unbelievable. It was what fixed me for the rest of the marathon there. But keep going right. Keep going one step at a time.
Speaker 1:And the perspective. I think this is something that was strongly emphasized at Amazon when I was learning there about thinking long-term right. And Jeff Bezos is an example of an executive that really thought long-term by not paying dividends for many years and growing the company and many other examples of thinking long-term. And the Ironman is the same. You need to think very you know, if you people usually burn it on the bike, they will feel strong after the swim and they'll give it all in the bike and then you cannot run.
Speaker 1:The same for the channel business, you know. Don't spend all your energy, all your stakeholder credit and all your energy just once and go for the revenue on the quarter, because you might damage partner relationships if you're only thinking about making a number for this quarter. Talk to your employers about partnerships is a long-term thing. Talk to yourself about having a long-term strategy with your partners and develop that long-term strategy with your partner. It's one step after the other. With a long-term view, I think we need to be hunters to put food on the table and we need to be farmers to keep having food on the table in the future. So it's both Awesome, alejandro, that's excellent table and we need to be farmers to have keep having food on the table in the future as well awesome, alejandro, that's, uh, excellent.
Speaker 2:One of the things that's so powerful about the the world that we work in is that it's an ecosystem and, uh, this podcast is its own little ecosystem. We always ask our current guest to recommend our next guest. Who did you have in mind?
Speaker 1:yeah sure, I mean, I know a lot of great people actually in this industry. I would suggest Lewis Howard. We worked together at Amazon. I brought him to my team and I think he's a very knowledgeable person about ecosystems. He has worked on partner programs. He's been a partner manager, he's been in training. So I think Lewis Howard from AWS I think he's still in training. So I think Lewis Howard from AWS I think he's still in AWS marketplace will be a great speaker to share with you the insights of a big hyperscale.
Speaker 2:Awesome. I'm looking forward to having Lewis on Alejandro. Thank you so much for sharing your experiences. It's been awesome.
Speaker 1:Thank you, Alex. Thank you for having me. I truly appreciate the opportunity.