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Ep. 111 Cloud Powerhouse Unveiled How Managed Services Elevate Azure and AWS! Pt 1/3

April 2, 2024

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Jump in today with Telarus’s Data Center and Cloud Architect, Mike Kowalski. Mike and I discuss AWS and Azure and how managed services elevate those opportunities and environments for partners. We discuss AWS, its $100 billion run-rate, and why that’s such a great opportunity for partners with migrations, management connectivity, and more. Mike opens up some secrets of the program that might make that conversation a little lighter on your customer’s wallet.

Welcome to the podcast that’s designed to fuel your success in selling technology solutions. I’m your host, Josh Lupresto SVP of Sales Engineering at Telarus and this is Next Level BizTech.

Welcome back here. We are kicking off a new Cloud track. Specifically, we’re talking about Cloud Powerhouses and how managed services elevate Azure and AWS.

On with us, we have got the newly minted Data Center and Cloud Solution Architect, Mr. Mike Kowalski. Welcome on, man. Yeah, thanks, Mr.Lupresto I’m glad to be here.

We got a lot of stuff here.

For anybody that didn’t get to hear your backstory, they’re going to have to go back to a previous episode you and I did where we were talking about licensing,

episode 83. So go back to that and listen to that if you haven’t heard it.

But I want to kick it off with, you know, let’s flash back over the history of your career. Any key lessons that you’ve learned, previous mentor, boss, something valuable, mistakes made, all those are acceptable. Oh, there’s been plenty of mistakes made, but I think I’ve said this before. I’ll say it again. When people think they’re overwhelmed with technology, I had an engineer leader one time tell me, hey, you’re never more than 18 months behind. And that number is still standing true today. If anything, it’s getting a little bit shorter in time. And that’s because things are evolving so quickly, things are changing so quickly. So if you’re just getting into technology or maybe you haven’t been paying attention, you’re only 18 months or less behind. So I kind of took that to heart and it always kind of gave me a smile saying, hey, I can overcome this. I don’t have to make up two, three, five years of loss. 18 months is easy. – Fair, I like it.

Let’s talk about your role here, right? I mean, obviously people may have known you in the past as a regional engineer that kind of covers that NorCal on the coast of which you still have responsibility for, but talk to us about what is a data center and cloud solution architect at Telarus for anybody listening out there? – Well, a lot of my history has been in physical infrastructure and specifically data center. I sold for a really long time before cloud was really a common term that we use today. And for you to be a data center expert, what does that mean? It just really, you have to understand a lot about infrastructure and how it works together, how things are cooled, how things are powered, how they connect. And when you kind of combine that with cloud these days, there really isn’t any data center opportunity that I’m in that is purely physical infrastructure that doesn’t have some cloud component to it. So the marrying of the two within Telarus and having me on opportunities really gives me a great ability to understand where we can take them because it doesn’t really matter. It’s best for the customer, whatever is best for the customer we do, but that combining of the two has really grown exponentially over the last 12 months, 15 months with the dominance that we see in Azure and AWS these days.

So what does that mean overall? It means, hey, let’s have conversations about this. There’s no right or wrong answer. Let’s figure out what’s best for the user. – Yeah, I think it’s, I mean, what I wanna call it is we’ve got a lot of expertise. I think what we’ve realized is there’s a lot of value in specialization, right? Thus the creation of the role because look at where we’re at, we’re in this age of AI, we’re in the age of GPUs, everything is hot, data centers, AI, you name it. And like you said, I think your background is phenomenal for being in this role, huge value for partners. – Thank you. – Okay, so let’s look at this, right? When I started getting into tech back in the day, this crazy thing called AWS was coming out and it was for devs, it was for tests, it wasn’t for production, so whatever that was, oh, six, seven, eight, right around there. And now we look at this latest report that came out. AWS is doing about a hundred billion dollar run rate, right? That’s baffling to me. – That’s incredible, it’s a huge number. – Yeah. – You’ve got a full number. – Yeah, so when that started in the channel, it was hard to monetize that. And I think we were trying to figure all of that out, but when you hear that though, and you hear about, oh my gosh, there’s all this revenue in these hyperscalers, and a lot of customers are doing productization in these hyperscalers. Why is the fact that there’s a hundred billion dollar annual runway a great opportunity for partners? Where’s the help needed? – Well, you’re right, when AWS first came to market, if you were with any cloud infrastructure provider, you had a value sheet in front of you that said, why your product in your cloud was better than AWS, right? And how to beat AWS, how to outsell AWS. Well, that ship has sailed, you can’t beat them, you’ve got to join them. And I think where they are in the market today, having such a huge amount of revenue, they’re not going anywhere except for up and to the right with more and more sales.

The opportunity for our partners is following, hitching to that wagon, because it’s heading in the right direction, but it’s not necessarily on the infrastructure piece of it. AWS knows the infrastructure, they’re notorious for not paying commissions on their infrastructure, which is good and bad, it perhaps keeps the pricing low for their clients. But all of the residual business that comes along with these huge deployments are opportunities left and right. And that’s where we really can fall back into our MSP kind of solutions, where we can provide the expertise and the solutioning and the governance and the,

nearly every other component that is required to run a successful hyperscaler infrastructure.

we’ve never really talked about my cloud strategy, I’ve got a lot of infrastructure maybe in AWS or in Azure.

And I’m asking you, the partner, what your value is in that conversation, how can you help me in that? What do you say, right? So the partners kind of understand some of that talk track a little further. – The value you can add is twofold. One is you have someone that’s deployed in AWS or Azure, and they don’t know if they’re getting a good value for that spend. We could come in with services that could come in and evaluate their infrastructure and even audit it to determine what’s up, what’s running, what’s not, where’s the money being spent and create this output that says you have 100 servers that are doing absolutely nothing, turn them off, versus them not having that understanding.

The first thing that we don’t wanna do is say, oh, you’re in AWS, you’re in Azure, we need to sell you and we need to get you in, we need to migrate you right away into a different platform. What we don’t know, what we don’t know, that’s not necessarily the game plan. The game plan is for you to create value for yourself in this opportunity by saying, let’s make sure you have value in that spend that you’re currently doing. If we can find efficiencies and you happen to save some money, that’s a win. If we find efficiencies and we can increase your capacity for the same amount of money, then that’s a great value, that’s a win.

But maybe they started their life as a cloud first company, which was somewhat of a requirement five to six years ago that VCs would only give you that seed money if you put it in AWS.

They knew it was reliable, they knew they didn’t have any capital costs with that deployment and let’s get up and running. Well, those that have become successful now see that their bill is exponentially growing and is there a better way to do it? Some of that includes data center actually, moving out of hyperscale partially and into a physical footprint.

And then some of it is maybe we just fine tune it for what they have. So there’s a lot of different talk tracks we could go off on this one, but they’re nearly endless on the amount of value that we can add in a situation like that. – Yeah, you bring up a good point. We got into a couple of these lately where, okay, if AWS and Azure, they use different nomenclatures, right? So let’s pick on AWS first here. So AWS, right? If you’re of a certain size organization and you’re not just paying that retail predictable, or you’re not just paying that kind of retail burstable rate and you wanna do an EDP with AWS, enterprise discount program,

Microsoft’s equivalent in Azure that is an enterprise agreement. I think people go, oh my gosh, maybe I need to back off, maybe I can’t help. And the reality is in that what we’ve seen, right? Is that we can help in either of those scenarios. Even if they’re in an EA, guess what they still need? They still need help in Azure with managed services and migration and some of those processes. The licensing might be different. Maybe we can’t collect on the licensing in the same way because of how it has to be procured. But I think we’ve seen that same thing on AWS, right? People have come to us saying, well, I just snapped a new baseline, right? I’ve done my annual review with AWS of what my cost is gonna be and my enterprise discount is based on that. That’s great. You still have to spend that with AWS. AWS sometimes doesn’t care where you spend that, but ultimately if we need migration, if we need management, if we need auditing, if we need different dev, different building, AWS relies on that partner ecosystem of which I think we found that we can help. And so to me, it just seems like there’s really no limit, right? I don’t think we’ve really run into anything that we can’t help. – That’s right. And I think your example is a fantastic display of how confusing some of these things can get very quickly. And you and I both have this understanding of the language and we understand on how we can find some of these efficiencies and maximize this. But what about the company that manufactures shoes and they have an IT department, but they’re in charge of making sure the website is still taking orders and up and running, but everything is living within AWS.

They don’t know these things. They don’t know where the new applications are that are coming out. They don’t know about how they could work with these technology expense management companies that focus on cloud spend within hyperscalers to make sure that workloads are appropriately sized and you’re running with the right configuration of a server, they just can’t keep up the pace with it. And if they want to hire somebody like this, very expensive. And then you gotta keep that person happy. So don’t overwork them or else maybe they’ll just go someplace else.

Excellent opportunities. Knowing we’re having this conversation, I always like to talk in comparisons to things that people would really understand. And I live in a house without an HOA. I don’t have to paint my house. I don’t have to mow my yard. I don’t have to do any of these things if I don’t choose to do so. So I think that’s more of a private cloud environment. I get to hug my house like a server and I get to do what I want to with it. If you look at AWS and Azure, they’re creating these environments that are like master plan communities with HOA’s. You get the pool and you get the clubhouse and you’re getting neighbors with golf carts and you’re getting knitting clubs and you’re getting all of these new things that continually pile on. And there’s a lot of people that see value in that. But if you live in that house, how do you keep up with all the activities that you are paying for and you’re included into without getting like a cruise director or something? Like the neighbor that comes over knocks on your door and says, “This is the list of activities today. You would just simply get lost.” And this is the opportunity that all of our partners have in these environments where we can become the cruise director of their deployments and we can point them in the right direction. We can make sure that they’re staying leading edge with all of the new developments and services that are being launched that otherwise they may just be blind to. – Good points, good examples.

All right, let’s talk about problems.

So if you think about if I’m a customer out there, I mean, from what you’ve seen in opportunities, we don’t always get things when, hey, somebody needs the easy button, let’s call Mike. We get, hey, we’re stuck on what to do, can you help? Do you have resources that can help with this? Which is great, we’re problem solvers, we love that.

So let’s talk about some of the challenges that you see some of these businesses face if they’re migrating to AWS, they’re migrating to Azure. And then how do we and some of these services address some of these, but also, I mean, even take it further than that.

And I think when people think, hey, I’m moving from cloud to cloud, all I have to do is pick up my data and move it, that’s true to a certain extent, but it’s a really, it’s a missed opportunity. If you’re moving from house to house and you’re paying someone to move your furniture, would you wanna go through and say, what clothes do I wanna take? What furniture do I wanna take? What don’t I want to spend money on to have moved?

So if you’ve been in your environment for three years or four years, there are some inefficiencies there.

I think it’s really important that if they’re talking about moving or even expanding, that they have all of those inefficiencies identified and eliminated. And so you can go through this process of renewal and find your efficiencies, perhaps lower the compute resources that you need. So when you open the doors to your new cloud environment, no matter where it is, it’s fresh, shiny, new, and it is the best that it can be in that moment. Now you just have to get the housekeeper so you can keep it that way. And that’s what the MSPs can do for you. They can make sure the doors are locked at night, that the carpets are vacuumed once a day, and the bathrooms are clean because who doesn’t want a clean bathroom?

(laughs) – That’s true. Nobody wants a dirty bathroom. – Nobody wants a dirty bathroom. – Yeah, I mean, I think you bring up a good point. There’s so much improvement, there’s so much efficiency and savings. And I do come back, we always used to talk about this a lot in security, and we still do about the talent shortage. But I think the talent shortage is compounding. If you think about, okay, the security shortage is a couple million jobs that can’t get filled, now what? Now we have AI, and we have companies that need help with prompt engineers and large language models. And I mean, it’s not like even if all of the prompt engineers left and took all the jobs filled, I mean, there isn’t enough prompt engineers and there isn’t enough people to understand large language models. So you look at what some of these hyperscalers are creating. Again, all of it combines down to, we’ve got awesome tools, we’ve got Bedrock and AWS, we got Copilot and Azure.

Nobody’s the expert on that yet. Everybody needs help. I can’t imagine being a customer at this point in time and technology is tricky to stay up on these. – It is, and I’m sorry for the dirty bathroom analogy, but I have to go back there.

I know how to clean my house,

but I’m at a place in my life where I can’t afford to live in maid.

I can afford maybe a service once a month.

That maid is your IT specialist that’s sitting behind a desk, that’s a W2 employee that you’re paying benefits, 401(k) paid vacation, right? And that’s great if there’s a real purpose that he serves, but he is so busy with work, he is not keeping up to date on all of these other techniques that are being launched, or maybe he is and it’s taking away from his regular job. So I can’t afford the maid full time, but getting that housekeeper in here once a month is like my favorite time of the month because I know I’m getting the latest and the greatest back into my home, everything’s getting cleaned up, everything is getting right sized. And if I continually do that, I should live a pretty healthy lifestyle at home. That is the exact same thing about the services that all these MSPs can offer to any size deployment, right? Let it run wild with developers having access to creating and never destroying their lab environments. Your house is gonna get messy real quick, but if you can get in there with a service that is a low barrier of entry cost because it’s not a full time employee, they start with just minimal, minimal applications, minimal services,

that’s the low hanging fruit. They do a good job and then the client’s gonna say, what else can they do for us? And they give them a bigger job. And next thing you know, this is expanding and it’s moving to different departments and it’s spreading across the company. I think too many people try to go straight for the Fortune 500 or 1000 and they want the big win. When the big win is actually finding a small compliant company that really sees your value and then you starting and growing with them. – Yeah, let’s talk about innovation. Well, let’s talk about keeping pace, right? On that same track.

So, I mean, these providers release so many iterative products quarter over quarter.

We’re not gonna have enough time to talk about all of them.

But I think there are so many key products and programs that people are not aware of. How do you keep tabs on that? Do you wanna talk about one of those programs, maybe map or something similar?

I think last week we had no less than four trainings on emerging technologies, new things in the market, how you could add value. And so our whole team is getting this information. So that’s very valuable. As new things are launched with AWS and Azure, we’re depending upon our suppliers as well as our own tribal knowledge and our desire to learn more about the technology to come together and say, these are the next things. These are the next things of interest. And so our alignment with those suppliers is really a huge differentiator for us. Our clients don’t get that. Our partners get it to some extent through our own university, but we’re really living and breathing it every day.

Going to the AWS map program,

I’m right now working with a client that it’s a data center only. I’m supposed to identify four data centers where they’re going to migrate from one, they’re divesting a business, and they have to break it up. They also have an AWS deployment.

Since that has been out of scope, I haven’t had much purview into that until just recently. We’re doing so good on the data center side. They’re like, maybe you could help us on the AWS side. We have a direct relationship, we don’t get the best service, and they want $1.2 million to complete the audit for us. And I’m thinking, there’s a better way for us to do this. They’re not talking about map money, which AWS map is a program where if you are moving workloads into AWS, they will help fund these initiatives in the form of cash payments. And I believe it tops out at $400,000 for one tier. And then there’s three verticals, there’s three columns of upgrades. So that’s 400,000, and then it could be another 100,000, that could be another $300,000 that the client doesn’t have to pay if they work with these qualified suppliers that we have.

Now, going back to that $1.2 million, there has not even been a breath of, hey, you qualify for these funds from AWS.

Why wouldn’t they offer that? Because they only are single threaded to that support channel. I’m not saying that AWS is bad or they’re nefarious in this instance, but why would you discount your services if you’re the only one that can supply it?

We’re going to introduce competition into that process. And it’s gonna get a lot cheaper for our partner. And whether we win the business or not, the client is going to remember us and that we help drive that business price down. – Yeah, and I think this migration assistance,

I think it’s interesting, it’s been so valuable to learn from our suppliers through the years that a lot of people to your point, they just don’t talk about this necessarily from a direct perspective, but the providers that we have in the portfolio have access to these funds, right? And you could get up to X amount, it’s a use case, it’s a business case analysis, it’s the migration, it’s the where, are they spending it now? It’s just a business case. But I think that knocks down that wall from what we’ve seen of, wow, this is a really, this is a big upfront cost or this is a big, how am I gonna lift and shift all of this over? I need some help. It’s been awesome to see that. So yeah, certainly I would say come talk to Mike if you’re not aware of this program, if you’ve got customers that are looking to migrate into AWS and other folks have programs as well, but this is one of them that’s out there. So I thought that’d be a good one to call out. – Yeah, and for those that don’t know, the AWS map program is the AWS migration acceleration program and it is fully commissionable through our approved partners in the form of a one-time fee. So whether that be a $20,000 cost to the client and we get a percentage of that, or it’s ultimately hundreds of thousands of dollars, it’s all commissionable events. – Yeah, it’s a beautiful thing. – Beautiful thing. – Beautiful thing.

Okay, let’s talk about some deals or a deal. I mean, you get to see a lot, this team gets to see a lot. Walk me through something specific with AWS or Azure, a problem that you saw, how we came in, maybe what it was described as, and then ultimately what was the end solution.

Other opportunities that we’ve come across are they’re looking to do a full AWS deployment because they’ve got a relationship at the very top. Their CEO knows somebody at AWS and hell or high water, this is the direction it’s going to go. So when we got on and we started talking with them, they had absolutely no experience with AWS at all. So even though they knew that they could have their infrastructure out by, are positioned in one of their data centers or one of their regions, excuse me, they didn’t know how they’re gonna do it. They didn’t know how they’re gonna get there. They didn’t know how they’re gonna support it. They didn’t know how it was gonna operate. And this is a very large organization where we’ve made up our mind, it’s done, we’re going. What we were able to do is come in and not only supplement the things that AWS wasn’t doing, we were able to optimize the things that AWS had suggested. So getting on the phone and having a discovery call, which is typical process for us is, let’s just get on with just me, the engineer,

the client, the partner, let’s just have a conversation. When that progressed into customer facing conversations,

they were just floored. They were saying, I can’t believe that all of these things are missing from my skillset, they would be able to support this decision. Now I’m talking to an IT director, not the CEO.

CEO made the selection top down and the director was like, I have no idea. I’m gonna lose my job if I have to support this myself. We saved his job, we optimized the environment, they still went in all in AWS, we got it secured, we put in levels of governance that they didn’t have before. So they were just wide open in how they could create servers. It was like, you just, then they say, what else can you do for us? That’s just the beautiful moment in any opportunity.

And so I think the ultimately the engagement on that was around $65,000.

It’s professional services on the front end, but now we have those ongoing management services month in and month out. So anytime that they wanna make any major changes or small changes, it’s open a ticket, it gets done, there’s an SLA on how long it takes to be completed and they couldn’t be happier. – Love it.

Final couple thoughts here. So you’ve gotten the partners excited, they understand you’re here to help and the team is here to help.

Who do you want the partners talking to about this? Maybe they’ve sold a different technology, anything else in the advanced solutions tech or some network services or whatever it might be. Who do you want them to talk to? And what is that talk track to just to get it to a point where it’s time for a conversation?

What I don’t want to happen is if you’re talking with clients and they say, we need to do a migration from our data center, we need to get rid of our data center. I don’t think it’s a smart idea to go in there and start selling them on technology because maybe you heard about all the great things that AWS or Azure can do.

I would really be hesitant in saying, you definitely need to migrate from that to this, right? Because there’s just too many unknowns. We’re out here to serve in the best interests of the clients and sometimes that may mean putting them in multiple different technologies. Maybe it’s a VMware based dedicated private cloud in some data center. Maybe it’s Hyper-V, maybe it’s AHV, maybe it’s just fill in the blank. But then they have this other footprint because they’re a seasonal business, they’re a tax company that six months out of the year, they’re just crazy. And then the other times they’re just enough just to keep going by, right? Just to get by.

I think that you keep your ears open for opportunity and then your talk track is, where can I add value to this conversation?

There are several technologies, Mr. Customer, that could potentially get you where you want to go. If you could give me 30 minutes with my engineer and I to have this conversation with your team, we will make sure that you’re pointed in the right direction from the start.

Too many times clients will Google answers, they’ll go down a rabbit hole and now they got to dig themselves out because they either made a purchase that they didn’t know about or they got themselves in trouble with one thing or another. Let’s get them set on the right path right from the beginning

and have that discovery conversation.

give me a heads up, pitfalls to avoid, key considerations, things to think about if I’m thinking about a transition. I mean, you did cover some of that in kind of the previous question, but anything directly that you would say to the customers?

and it’s just not a good way to lead the conversation.

If you have to have a conversation around money or budget, just tell them we are going to get the best value for your spend and we’re going to go through this process to learn what that is, okay?

If you can lead with that and we ultimately can find them some cost savings, bonus, they’re gonna be stoked.

But I think that, hey, I’ve got these resources at my fingertips. I’ve got 400 plus qualified known suppliers that do a litany of different IT things.

Let’s get on the phone with an expert to have this conversation so that we can get the right solution.

And I think the value is as you’re talking to these folks, if you have an established client, they understand your value. They understand you’re going to do all of this heavy lifting for them. You’re going to be their personal trainer and you’re gonna give them the shortcuts to getting in shape. You’re not gonna have them wandering around the gym, wasting their time.

If it’s a new client and you’re trying to do client acquisition, don’t sell the technology. Sell yourself. Go in there and tell them all the great things you can do. Tell them how you’re going to help them and add value to their business without costing them any additional effort.

I think if you can lead with either one of those things, when I get engaged as an engineering conversation, it’s there’s an opportunity there and we’re gonna win something. – Love it. Okay.

I’m out of questions, man. That wraps us up. Mr. Kowalski, thanks so much for coming on, buddy. – You’re welcome. It’s always a good time, Josh. Thanks for having me on. – All right. That wraps us up for today. I’m your host, Josh Lepresto, SVP of Sales Engineering at Telarus This is Manage Service Elevating Azure at AWS. Go like and subscribe. Thanks for tuning in.

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