AWS’s Matt Yanchyshyn on Enterprise IT Buying Trends – Techstrong IT Insights EP1

Hi, I am James McGuire, and on today's video we're talking about making purchasing decisions for IT products and services. We're taking a look at how this process has changed in terms of current trends and we're providing best practices for making purchase decisions To discuss that, I'm joined by someone who knows a lot about the topic with me is Matt Yen, vice President, AWS Marketplace and Partner Services. Matt, absolutely thrilled to have you with us today.

Thanks Ja. James. So I, I know you work for AWS marketplace.

What exactly does that mean? I mean, in a very brief nutshell, what do you do for AWS? So, I've been based, uh, outta New York for AWS for 13 years, and I've been running their AWS marketplace and partner services business for a few years.

Uh, that means that I'm responsible for all of the, the services that customers use to discover and use partners on AWS and also all the services that partners use to do business with AWS, those, those two halves. Mm-hmm. Great.

I'm sure it's enough to, to keep the busy, I'm sure. Yeah, For sure. Uh, so you see, you're right there in the frontline where customers buy and sell it services, you know, a lot of transaction, a lot, a lot of money changing hands.

What sort of trends have you seen unfolding over the last few years or so? What, what's changed these days? I, I mean, a lot.

I i sure. Working, you know, with AWS uh, for, for, like I said, 13 years, and I mean, so much has changed. When I joined, you know, cloud was still a relatively new thing, right.

A lot of customers were figuring out. And actually right around the time I joined about 13 years ago is, is when the marketplace or AWS marketplace came out. And what we saw, I think about a decade ago, where, where a lot of these customers, you know, there was always the early movers, but we started to see the first enterprises adopt cloud, right?

And I remember there was a CISO of a prominent customers stood on stage and there was this watershed moment where he said, you know, we can be more secure in the cloud. Yes. And at times, like, wow, you know, now that's sort of taken for granted, you know, because, But, but there was that early period when people thought, oh, the cloud I, not if we can go there.

Yeah, yeah, exactly. And so I think, you know, what has changed well so much, but to focus on a couple things. There's been a big shift from, uh, using server based products, you know, what we would call amis or amiss, uh, to SaaS.

Definitely have seen that, right? And seeing the, the vendors, you know, having to change their whole sales model, you know, to move to a subscription based service, you have to change how you pay reps. Customers are consuming a lot of pay as you go.

And, and in fact, the way people consume third party products in it, especially in the cloud, has, has started to mirror cloud itself. You know, sort of a more of a pay as you go model. Even if you have a contract, it's often contracted with subscription.

So that shift to kind of getting things immediately and paying for what you use has been a huge journey that we've seen. First the cloud itself and then software running on cloud, uh, sort of go through. So I, I'd say that's one of the biggest changes.

And, and then especially more recently, obviously AI coming in impacting not only procurement and discovery when it comes to, you know, IT vendors, but, but also everything from contracting to, to all parts of the procurement process. So in addition to agents and AI itself, I think it's actually impacting how people discover, buy and, and use their software in the cloud. Oh, really?

They're using AI to say, explore data or ask questions that actually make purchase decisions using AI these days? Yeah, I mean, absolutely. We, we use ai, uh, on our own AWS marketplace to do things like scan listings to make sure that it, it does what it says on the box, you know, to spot erroneous claims.

Um, I think that customers are increasingly turning to AI to help them make purchasing decisions. You have to compare products as a really good example. Like that's something that, uh, you can do a ton of research yourself or you can ask, uh, you know, a search engine, large, large language model to make some recommendations.

So procurement teams, especially procurement teams who are sort of forward-thinking, adopting AI are, are increasingly adopting it, definitely seeing that trend. Hmm, Interesting. Alright.

So what advice do you give to businesses that are procuring services in particular? What pitfalls do companies encounter that you wish you could warn them away from? Yeah, it's, it's less pitfalls and more, I mean, the demands on IT teams and on companies in general these days ha, have never been higher.

The demands of moving faster and innovating, you know, to stay ahead of the curve these days. If, if you look at, you know, what's happening in AI and, and generative AI specifically, it seems like every week there's a new model coming out, you know, a new framework. And if you're the CIO or if you're the IT buyer, you know, staying ahead of that trend is, is hard.

You know, you, you need to move quickly. So how do you unlock innovation for your developers, for your business teams, um, but at the same time keep risk low. And, and that is, you know, definitely both advice and, and what I hear from customers is they want, they wanna move quickly, but they don't just wanna let their, their company, the people at the company use any, any software, right?

You know, that introduces risk. So how do you, how do you find that balance between speed and agility and innovation and adequate governance? And so I'd say spend a lot of time upfront working out what is the long pull in the tent when it comes to procurement, how can you speed up both finding the right product and actually, you know, trying that product, buying that product, and then setting it up for use.

Uh, an incredible amount of software out there or models that, that is bought is never used. And so, you know, if you're a CIO and, and that's, you know, it's leaving money on the table, it's leaving value on the table. So unlock innovation and speed, and then make use of what you have and, and look for those long pulls and, and that time to value and focus.

Do everything you can to reduce procurement time. Just like, you know, with the change in security 10 years ago, we'll say with the cloud, I think we're, we're there with procurement now, and I see a lot of customers, you know, working with us to reduce the time it takes to find the latest generative AI solution or, or the latest products so they can innovate and keep up in what is like a really fast paced market. You know, on that very note, I, I hear a lot of companies say, well, we wanna be contemporary, we wanna be sort of forward looking, but we don't really wanna be in the bleeding edge because we don't, we can't go that far out.

I mean, sort of, there's, there's a real conflict there. I mean, do, do you sense that What I do sense is, uh, a whole generation of C levels who are from the app store generation, now, you know, you, you have, uh, these, these people who grew up on, on their phones have with, with, uh, immediate access to, uh, personal apps in the commercial space, are now often in very senior IT positions. And, and they, they want things now.

They, they want some immediacy. So, uh, I think evolving enterprises and, and really companies of all flavors to sort of meet the needs of the, of the CIO or the chief procurement officer of the future, that that's, that's definitely something I see a ton of. Mm-hmm.

It's real interesting the way consumer applications have, have morphed over the enterprise world and expectations from consumer world have, have morphed along with them. Um, so, so what, what do we need to know about, uh, the AWS marketplace and in particular, how can enterprises best navigate this big, uh, big platform? Yeah.

Well, I mean, I think the reason why marketplace, the AWS marketplace has, has grown so successfully over the last 13 years is because it's mirrored a lot of these shifts that I just described. You know, we, we started out as a largely self-service app store style marketplace where you bought server-based products. We evolved to sell SaaS solutions, and that's been very successful.

We evolved then to sort of, you know, we onboarded channel partners. And so I think we kind of came at it from this bleeding edge, like you said, of, uh, cloud procurement, which was, you know, pretty revolutionary back in the day and have sort of backed into more traditional sales motions, like, like channel led, uh, SaaS contract purchases, for example. And so with the marketplace, now you can satisfy both those needs for that immediacy that I described.

You know, that app store generation now, CIO who wants things now, but who also needs to govern what, what the company uses, but want, needs to give sort of immediate access. So we have over 20,000 products, you can discover what you want. Uh, a huge number of those products have free trials.

And so the customers tell me that, Hey, I want to let my people in my company try before they buy, I want them to find things, self-service. I don't wanna have to front every sort of I vendor buying decision. Mm-hmm.

And then I want to, you know, give them the, the ability with the right guardrails in place to, to purchase. So again, you can kind of move quickly so that, that's what marketplace allows. So we, we give a broad selection, the ability to find what you need, try before you buy largely self-service, and then still use those sort of enterprise contracts, governance guardrails if you need them, uh, to reduce risk.

So really just about everything in terms of IT is bought and sold on AWS marketplace. Yeah, I mean, what we want to do is continue to increase selection for customers so that they can effectively buy their entire IT estate through the a BS marketplace. Because if you do that, then you can, it increases the governance that you can do.

The more products that you procure through the marketplace, the easier it is to do things like cost management, uh, you know, vendor and product governance and management. So we see, um, we see huge value when, when, you know, customers really pivot their purchasing to marketplace. 'cause it just makes everything easier.

You know, end of the day, if you're a chief procurement officer, you're measured on saving money and, and, and you're measured on sort of, they're putting the right, uh, governance in place and, and ultimately unlocking innovation. So I, I tell CPOs, Hey, with Marketplace instead of the office of no, you can become that office of yes, you can actually help your developers get access to the latest, greatest Gen I, uh, more quickly. Great.

To, to wrap up our discussion, and I'd like to get your, your sense of, uh, you know, what is your view of the future of procuring IT services? I, I'm thinking you mentioned this a little bit, like, will it all be AI driven? So I'm just gonna click on my cloud in the chatbot and have, you know, five AI servers delivered to the data center and then probably installed too.

So what, what do you see for the future of buying and selling it? Definitely we're seeing, uh, steady and fast, uh, but incremental progress, uh, about ai. If you look at, on AWS marketplace, for example, we have AI powered product recommendations.

So customers can very quickly do product comparisons. It's almost like an RFP as a service, uh, which I think customers have been asking for, for a long time. Uh, when I think of the future, you know, we're gonna continue to see evolution in, in what people are buying.

We've seen the rise of agents very quickly and, and this will definitely continue to be a category that will grow on marketplace. We're seeing, uh, uh, partners like Zendesk for example, selling their, their agent alongside their SaaS solution on the a BS marketplace. I think we can expect a lot more of that.

So not just for customers discovering that the partner products or the third party vendor products themselves, we're gonna see agents plus SaaS applications, plus containers, plus models, and these sort of multifaceted, uh, packages of products sold through marketplaces. And, and that will mean more to choose from, which is why AI is even more important from a discovery and selection perspective. 'cause you can lean on a little bit to make sure that you have the right product for your specific needs as a customer.

Mm-hmm. Man, that's great. It's a lot of good stuff.

Uh, I really appreciate your sharing expertise. Please come back and talk with us again sometime. You bet.

Thanks James.