How AWS Partners Are Creating New Revenue Streams by Modernizing Microsoft Workloads on AWS

By Prasad Rao, Principal Solutions Architect – AWS

Customers are increasingly focused on modernizing their legacy applications and infrastructure to optimize their ongoing maintenance operations costs, reduce licensing fees, enhance performance, and increase security and compliance–and with good reason.

Recent Amazon Web Services (AWS) customer studies showed modernizing to the cloud produced a 50% lower cost of operations over five years, 47% more efficient IT infrastructure management, twice as many new features delivered per year, a 69% reduction in unplanned downtime, and 45% fewer security incidents per year. This presents an excellent way for AWS Partners to create new revenue streams by modernizing their customers’ Microsoft workloads on AWS.

This post will explore ways AWS Partners can create more revenue streams for their business by leveraging various AWS solutions, tools, and programs that enable customers to modernize and take advantage of the agility and innovation of AWS cloud-native technologies.

I will also highlight two AWS Partners, SourceFuse and Kloia, who describe how modernizing Microsoft workloads on AWS has helped them grow and sustain their practices by improving recurring revenue, increasing profitability, and creating additional revenue streams.

Modernizing Microsoft Workloads on AWS Maximizes Partner Value

Modernization involves transforming the customer’s current legacy environment into a more agile, flexible, and highly available cloud-based environment. Modernizing legacy Microsoft workloads such as .NET applications running on Windows Server and/or Microsoft SQL Server databases enable customers to fully realize the differentiated value of the AWS cloud architecture.

This, in turn, unlocks opportunities for partners to leverage their expertise for data analytics, artificial intelligence (AI), Internet of Things (IoT), and other key growth areas.

As part of the modernization journey, AWS Partners benefit by extending and integrating with additional solutions, such as introducing line-of-business software (LOB SW) and developing solutions to solve customers’ business specific needs in bringing their workloads to the AWS cloud.

The AWS Partner Profitability Framework helps partners think about how to build these new services and solutions to monetize on AWS. According to a study published in 2022 by research company Canalys, partners can earn $6.40 for every $1 spent on AWS services. Modernization partners can unlock significant, long-term revenue potential by expanding their practice capabilities and expertise.

Figure 1 – AWS Partners with a breadth of offerings can achieve a $6.40 multiplier.

Tools and Programs to Drive Partner Business

Since modernization is a journey that can last from months to years, AWS offers multiple tools and programs for partners to meet customers’ needs wherever they are in the journey. It starts with knowing what workloads customers are running and then identifying viable workloads that can be modernized.

The AWS Optimization and Licensing Assessment (OLA) program helps partners assess their customers’ on-premise environments and which workloads to migrate based on actual resource utilization and third-party licensing. This assessment provides a customized and right-sized licensing strategy, as well as guidelines on how to optimize current Microsoft workloads, reducing costs by 36% when migrated to AWS.

Partners can use the AWS Migration Acceleration Program (MAP) to help customers reduce costs and automate and accelerate their migration and modernization projects. MAP is a comprehensive and proven cloud migration program, and its three-phased framework (Assess, Mobilize, and Migrate/Modernize) helps partners build their case for migration and modernization and offset the initial costs.

Once customers have migrated their workloads to AWS or identified specific workloads in their on-premises environment that needs to be modernized, partners can use Microsoft Modernization Program (MMP) and Modernization Viability Assessment (MVA) framework for Microsoft workloads to accelerate modernization of customer workloads. MVA offers partners guidelines and best practices to standardize their approach for assessing Microsoft workloads such as .NET applications and SQL Server databases to modernize on AWS.

Let’s look at how AWS Partners SourceFuse and Kloia have modernized Microsoft workloads on AWS for customers and positively impacted their revenue and practice growth.

Partner Success: SourceFuse

SourceFuse is an AWS Advanced Tier Services Partner with the Microsoft Workloads Consulting Competency that has helped organizations worldwide save millions by modernizing their legacy Windows workloads on AWS. These migrations and modernizations have become an increasingly significant part of SourceFuse’s business, encompassing about 70% of customer contracts.

This increase has accounted for an average modernization compound annual growth rate (CAGR) growth of around 60-80% over the last five years, with some years at 100% revenue growth.

“Currently, a substantial percentage of our overall business revolves around modernizing Microsoft workloads on AWS,” says Vidur Yash Ahluwalia, Director of Strategic Initiatives at SourceFuse. “This has had a big impact on validating our business expertise globally in this niche for the AWS ecosystem.”

Modernization is a primary driver for most SourceFuse customers. Often, customers who initially come to them seeking migration services find their need to migrate is actually driven by a technical or business challenge that necessitates modernization. To determine the best plan, SourceFuse starts by assessing what customers need to migrate and whether a simple migration would address their goals. In most instances, they find modernization is the best path to overcome their challenges with outdated equipment, expensive licensing, and lack of scalability.

To help customers realize the advantages of modernization, SourceFuse offers a proof of concept (PoC) during the assessment phase, which provides tangible evidence of the benefits.

“The PoC is complemented by immersive sessions where we educate the customer about the advantages of exploring modernization options,” says Ahluwalia. “By taking this approach, our customers can make informed decisions based on a thorough understanding of the potential benefits, such as reduced costs and increased efficiencies, that they can unlock through modernization. We believe that by aligning their migration strategy with broader business objectives, customers can maximize the value they derive from their cloud transformation journey.”

With a thorough understanding of the challenges faced by customers predominantly using legacy Microsoft technologies, SourceFuse addressed their concerns regarding growth, scalability, and security by modernizing their workloads on AWS.

In addition, SourceFuse has added to its modernization framework and services by developing ARC by SourceFuse, a catalog of pre-built backend microservices, micro-frontends, and infrastructure as code (IaC), enabling customers to develop, modernize, and go to market 30-40% faster. This has provided an additional revenue stream for the company, resulting in more than two million downloads.

“Like AWS, SourceFuse is customer obsessed and always works in the customer’s best interests,” says Ahluwalia. “We have successfully implemented open-source technologies like .NET Core and Linux for numerous customers, reducing their total cost of ownership, achieving greater flexibility and scalability, improving security and compliance, and eliminating end of support concerns. These outcomes have not only driven long-term value for our customers, but have also fostered trust and loyalty.”

This trust and confidence are evidenced in SourceFuse’s high customer retention rates, which average a three- to five-year customer lifecycle and 80%+ year-over-year contract renewal for the past four years. SourceFuse’s success in modernizing Microsoft workloads on AWS has added more recurring revenue for the company and established them as a trusted partner for customers’ digital transformation journeys.

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Partner Success: Kloia

Kloia is an AWS Advanced Tier Services Partner with the Microsoft Workloads Consulting Competency. By focusing on legacy application modernization, Kloia has seen a significant impact on its operations, and modernization now accounts for about 30% of both its DevOps and Software divisions.

Kloia’s clients frequently come to them with concerns about the maintenance cost of legacy technologies and the struggle to find staff who are familiar with maintaining those platforms. This technology, such as Microsoft-based legacy applications and workloads, is often over a decade or two old, presenting an opportunity for modernization at both a software and database level.

Kloia’s modernization strategy goes beyond migrating customer workloads to the cloud, focusing on refactoring to cloud-based applications and helping customers realize the full potential of cloud benefits.

Kloia has experienced significant growth in modernizing legacy Windows applications to cloud-based applications on AWS by developing a three-step methodology that guides customers along their modernization journey. The phases include application components and code analysis, refactoring monolithic applications to microservices, and building a cloud-native solution architecture. The phases are tailored for each customer based on their specific business requirements.

During the assessment phase, Kloia identifies potential modules which are open for more modernization. Dorian Sezen, Managing Partner at Kloia, describes some of the challenges of modernization as akin to “taking a 20-year-old car and trying to make it like a Tesla.” Similar to a car, maintenance phases can become more expensive with age, and certain parts and components may get more costly or complex to replace, while other parts are easier to change.

“Once we get deeper into the software and customer requirements in the assessment phase, we identify the components which have a lower cost to modernize, as well as the higher value components that drive business change,” says Sezen. “The customer also sees significant financial benefits by eliminating Microsoft licensing costs and leveraging open-source technologies.”

AWS Microsoft Modernization Program (MMP) has been a core resource in helping drive additional modernization business for Kloia. Many of its customers view lack of time as an issue in modernizing their legacy technology because it takes time away from their daily routine and operations. The MMP is a partner funding program for eligible AWS Partners which provides monetary and staffing resources the customer lacks by creating a hybrid team that incorporates expert AWS and partner staff focused on supporting the customer’s modernization.

“When working with AWS, it’s easier to show our customers how to modernize their application. Together with AWS, we are helping them modernize,” says Orhan Burak Bozan, Managing Partner at Kloia. “After the modernization, it’s more cost-effective for the customer, and they are surprised because AWS helps them decrease their costs, which isn’t normally what a vendor does. That helps us a lot.”

Conclusion

AWS Partners are finding significant benefits and adding additional revenue streams by modernizing their customer’s legacy Microsoft workloads on AWS. If you’re looking to take your operations to the next level, AWS offers a variety of tools, funding, training, and programs to make your Modernization of Microsoft workloads on AWS practice a success.

For more information, download the AWS Partner Go-to-Market Playbook for Modernization.