Cloud Partnership Ladder: Where Your Money Lives

AWS's Partner Profitability Framework breaks down exactly where partners generate returns at each stage:

Resell (Single-digit margins)

Simple cloud service reselling. Low differentiation, high competition. Most partners start here, but staying here limits growth potential.

Value-Added Services (High teens to 20% margins)

Partners add their services on top of native AWS capabilities. Migration consulting, implementation services, custom platforms built on AWS.

Managed Services (30-40% margins)

Range from basic IT operations management to performance monitoring and backup recovery, to completely running a customer's entire infrastructure.

Customers avoid CapEx while partners capture recurring revenue.

Co-sell your own IP

Partners selling their own IP alongside AWS get extra margins, because hyperscalers actively seek these partnerships to extend their total addressable market.

Business Outcome Solutions (highest margins, 60%+ previously reported)

End-to-end solutions that directly impact customers' top line. Real-time retail analytics, predictive maintenance systems, revenue-generating applications.

Compounding Effect Partners Miss

Amazon Web Services (AWS) has a $6.40 partner multiplier for $1 of its cloud services. Importantly the value only starts in year one:

39% of the multiplier is gained after first year. Partners can drive major upside beyond 12 months with the same customer.

79% of partners report customers increased cloud consumption after 1 year. This creates a large opportunity for expansion revenue.

Where are AI and Agents?

The AI wave is creating unique opportunities at every tier of the ladder and boosting value of the right partners.

Capgemini's study showed that 62% prefer partnering with solution providers rather than building agents in-house.

Just published MIT research confirmed companies purchasing AI tools from specialized vendors and building partnerships succeed 67% of the time, while internal builds succeed only 1/3.

Three Strategic Moves:

Climb the margin ladder systematically

Each tier builds on the previous one. Use resell to learn, managed services to create recurring revenue, then move to outcome-based and AI solutions

Design for compounding growth

60% of revenue happens during advise, design, and build phases, but expansion after year 1 is where revenue scales

Leverage the AI advantage

Position yourself as the trusted guide for AI transformation, not just another vendor selling tools

Partners who master business outcome delivery while capitalizing on AI will capture most of growth.

Source: AWS Partner Profitability Framework