AWS just made an IT services power play with DXC deal

Dive Brief:

Amazon Web Services and end-to-end IT services company DXC Technology are partnering to create an integrated services practice focused on cloud migration and digital transformation, AWS announced Tuesday. The "multi-billion DXC-AWS Integrated Practice" will center on Fortune 1,000 clients.
DXC is a relatively new name in the end-to-end enterprise services market. In 2017, the company was born from a merger between CSC and Hewlett Packard Enterprise's services division. The deal with AWS will include the development, marketing, sales and integration of AWS products, according to the announcement.
One of the goals for the partnership is to reduce time to market with AWS offerings. DXC's offerings will initially focus on managed security and compliance, analytics and application services; support for SAP on AWS; and VMware Cloud on AWS migration.

Dive Insight:

DXC touts about 6,000 private and public sector customers, however it spun off and merged its U.S. public sector practice with Vencore Holding Corp. and KeyPoint Government Solutions in June, creating Perspecta.

AWS has standing relationships with other consulting and services firms — like Deloitte and Accenture — in addition to its AWS Professional Services. But the deal with DXC to create an integrated practice focuses on cloud migration and digital transformation. AWS is essentially bringing consultants in-house to make it easier for customers to adopt and capitalize on its suite of services.

Vendors have long partnered with IT services firms, relying on them to implement their wares. The partner channel is alive and well and a vast third-party ecosystem makes it easier for vendors to go to market and have tools quickly adopted.

The deal between DXC and AWS is a power play for cloud migration. AWS brings a lot to the cloud market with the "sophistication, breadth and depth" of its cloud services portfolio, said John Dinsdale, chief analyst and managing director of Synergy Research Group, in an emailed statement to CIO Dive. The company also has a global platform and customer-centric culture that it boasts in the market — a market it holds 34% of the shares in.

But as powerful as AWS is, there are only so many custom resources it can offer. "There are an awful lot of enterprises and large organizations out there who need a lot of customized support — and that is where an organization like DXC can provide a big assist," Dinsdale said.

AWS has made a name for itself building unique products and selling them many times, according to Dinsdale. "But that is not the key to supporting complex organizations with unique support needs."

Of interest too in this deal is the DXC's relationship with the public sector. Thought it spun of its public services branch, the relationship and credentials still stand.

Many federal cloud contracts are up for grabs, including a $10 billion, 10-year contract to build the Pentagon's cloud infrastructure. With close relationship to a services firm like DXC, it would make it easier for AWS to run multiple large-scale cloud migrations at once, according to John Parkinson, affiliate partner at Waterstone Management Group, in an emailed statement to CIO Dive.