Microsoft and AWS Deploy Engineers Inside Client Companies
This internal deployment by Microsoft and AWS may redefine enterprise cloud integration strategies over the next two years.
Key Points
- 1First large-scale internal deployment by major cloud providers.
- 2Alters traditional IT integration dynamics within enterprises.
- 3Increases dependence on specific cloud vendors for integration.
What Changed
Traditionally, cloud providers like Microsoft and AWS have relied on external service network (ESN) partners to manage the integration of their offerings into client businesses. This recent shift sees both companies deploying thousands of their own engineers directly within client organizations. Such direct involvement was first adopted by Google in 2019 but on a considerably smaller scale.
Strategic Implications
By cutting out traditional partners, Microsoft and AWS are gaining unprecedented control over integration processes, which may lead to stronger client relationships and improved service delivery. However, this could weaken ESN partners, who now face reduced engagement opportunities. The increased control also means that client companies may become more dependent on these vendors.
What Happens Next
As AWS and Microsoft forge deeper ties with clients, other cloud providers might follow suit by 2027. This strategy could prompt regulators to scrutinize potential anti-competitive practices, given the decreasing role of intermediary players in the industry. Policymakers may begin implementing frameworks addressing these changes by early 2028.
Second-Order Effects
With more engineers housed within client companies, there could be a shift in IT department dynamics, potentially leading to new roles focused on managing these third-party engineers. Furthermore, the supply chain dynamics may shift, affecting ESN partners as their involvement diminishes, potentially leading to industry consolidation within the next five years.
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