Amazon Teams Up With Accenture to Boost Cloud Services Business

Amazon.com Inc. and consulting giant Accenture Plc are teaming up to provide cloud-based technology services and consulting to businesses, catapulting the Web retailer further into territory long dominated by companies such as Hewlett-Packard Co. and International Business Machines Corp.

The deal, announced Wednesday at a company event in Las Vegas, will create a group staffed by Amazon and Accenture employees that will provide consulting and technology services to businesses. The team will focus on helping businesses move existing applications into the Amazon AWS cloud, and design new products on top of AWS, with an emphasis on large-scale data analysis. Around 1,000 Accenture professionals will be trained in how to use AWS in the first year, said Omar Abbosh, Accenture’s chief strategy officer.

Amazon is trying to grow its Amazon Web Service cloud business by selling a broader range of services to enterprises, which requires closer collaboration with global technology consulting firms, like Accenture, that work with large, traditional businesses. That may pose a bigger threat to traditional computer-services companies such as Hewlett-Packard and IBM as corporations look for cheaper and more efficient ways to outsource management of their data and networks.

“The HPs, the Oracles, the Dells, have already had a relationship to Accenture & Co.,” Holger Mueller, principal analyst at Constellation Research, said in an interview. “This is why it’s so important for Amazon to get these relationships now. They have to become more like a shrink-wrapped platform for business users.”

While Amazon Web Services — commonly known as AWS — now generates only about 8 percent of annual revenue, Amazon has big ambitions for the division. Andy Jassy, who runs the unit, has said it could one day be bigger than Amazon’s traditional e-commerce unit.

Established almost a decade ago, AWS has been working closely with customers to tailor its services to their needs. Infor, an enterprise software company, began exploring AWS’s capabilities five years ago and gave Amazon a list of about 100 services it needed the company to deliver.

“They went through the list and delivered every single one,” said Pam Murphy, Infor’s chief operating officer.

Infor shut down all of its data centers and last year based itself entirely on AWS. Murphy says the addition of more consulting firms will help Infor serve clients’ ever-increasing demands.

As Amazon brings Big Five consulting firms such as Accenture on board, more and more companies could be tempted to ditch traditional IT services companies for AWS, which offers more flexible contract terms.

To compete, the likes of IBM and Hewlett-Packard have had to build up their own cloud services offerings and stop infighting between their sales organizations, which tend to squabble over cloud versus traditional contracts, said Brian Gracely, an analyst at Wikibon.

“Most of the traditional vendors haven’t figured a way to change their compensation model,” he said.