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Channel Conflict, Discrimination, Shake-Ups: What’s Going On at AWS?

We dig into allegations of direct sales problems, bullying and racism, and explore some personnel changes.

Kelly Teal

August 13, 2021

10 Min Read
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Facing allegations of channel conflict, bullying and racial discrimination, and dealing with some significant personnel changes, Amazon Web Services has a lot going on.

None of these issues comes as huge surprise. As the world’s largest, hungriest public cloud provider, and employer of almost 100,000 people, according to LinkedIn, AWS stands to create tension.

In terms of channel conflict, it’s easy to see how that could happen. AWS moves quickly and pushes its people hard. A hyperfocus on innovation and customer experience can encourage missteps.

When it comes to potential discrimination, the tech world is not known as a paragon of diversity, equality and acceptance. AWS may be forced to lead on that front, should an investigation find the company has not given fair shrift to women and “underrepresented groups.”

And the installment of new top executives – in this case, Adam Selipsky replacing Andy Jassy – often results in staff shake-ups and attrition.

Let’s break down each issue.

Is AWS Really Competing Against Its Partners?

Last week, Business Insider published a piece that claimed AWS’ relations with its cloud partners “are getting incredibly tense.” Citing an internal memo that circulated in late 2020 (although failing to call attention to that date, so the note could seem more recent), the outlet pulled two examples of apparent channel conflict to bolster its claims. BI said Snowflake, the data warehousing giant, and 2nd Watch, a managed service provider, both encountered instances of AWS direct salespeople trying to steal accounts.

AWS, according to the memo, did not have rules of engagement in place to prevent this kind of behavior. As a result, direct salespeople supposedly were attempting to take clients from Snowflake and 2nd Watch.

Or, maybe not so much.

“I think it’s a little bit sensationalism and hyperbole,” 2nd Watch CEO Doug Schneider said of the Business Insider article.

‘This Isn’t Abnormal’

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2nd Watch’s Doug Schneider

“We’ve had a longstanding relationship with AWS for 10-plus years and over those 10-plus years, there’ve been times when we’ve had channel conflict just like with any significant vendor partner ecosystem,” Schneider told Channel Futures. “So part of me [thinks], this isn’t abnormal. Some of the accusations in there … we never had that or made those claims. It was more traditional channel conflict going on in the field.”

Channel Futures was unable to interview Snowflake. The company remains in a quiet period ahead of its earnings call later this month. Channel Futures also reached out to other AWS partners for comment. They either did not want to go on the record or did not respond. Should partners speak with us as a result of this article, Channel Futures will run a follow-up.

The channel conflict issue, meanwhile, amounts to …

… a bit of a non-story, said an AWS employee who spoke to Channel Futures on condition of anonymity.

“These are good examples of things being resolved — and that’s where there’s a grain of truth,” the employee said.

Schneider agreed. And, he said, what matters most is how a vendor resolves those complexities.

“My view here is that the channel conflict is not deliberate and intended; it’s basically a natural consequence. To me, the bigger issue would be, how do they respond to you? How do they engage with you when you as a partner bring up the channel conflict? … What we have found is that they don’t ignore us. They don’t just say, ‘Tough luck.’ They lean in; they try to understand stuff. There have been other things even recently where we had some conflict. They ended up backing up, looking at some things and disbanding the program. I would be very vocal and frustrated if what we were finding is they were not listening to us and taking action.”

AWS ‘Obsessed With the Customers’

Schneider also clarified that 2nd Watch has had to accommodate customers changing their minds. Some decide to buy cloud computing capacity directly from AWS while continuing to use the MSP for implementation, monitoring and maintenance. That does not arise because of channel conflict, Schneider said. Rather, it’s about designing the best approach for the client.

“What I do credit AWS for is that they are obsessed with the customers and making sure the customers are getting the best possible experience, and that’s where we believe we shine.”

An AWS spokesperson provided Channel Futures with the following statement:

“AWS has a vibrant and growing partner community of over 100,000 companies, and every day, 50 new companies join the AWS Partner Network to build their businesses. … These companies choose to work with AWS because of AWS’ leading functionality, partner programs and operational performance. … Though there are times that AWS services and partners have some overlap on product features, these spaces are so large that there is room for multiple successful entrants — and partners who have strong customer experiences and keep iterating on these experiences have continued to prosper.”

What About the Charges of Discrimination?

In late July, news began to circulate that five women, current and former employees at AWS and within the e-commerce division, had sued Amazon for discrimination. The women filed the suits separately. The accusations are similar.

Pearl Thomas, a Black human resources employee, says her manager called her the n-word after ending a call with her. She further says she was recruited into a position lower than her qualifications merit, and that such placement for people of color is a systemic problem within Amazon.

Tiffany Gordwin, another Black woman in human resources, concurs with Thomas. She says she lost promotions due to racial bias.

An AWS technology executive, Cindy Warner, says a top manager, Dave Lavanty, called her “b****,” “idiot” and “nobody” — and in front of …

… a human resources representative, with no repercussions. Interestingly, several media outlets say Warner was fired in June. Her LinkedIn profile, however, still showed her as employed at AWS as of Aug. 13.

Diana Cuervo says her white male supervisor made comments including, “Latins suck,” and “How is a Latin like you working here?” She says she was then illegally fired for reporting a dangerous gas leak at an Amazon facility in Everett, Washington.

Lastly, Emily Sousa, a woman of Asian-American descent who worked in Amazon’s Harleysville, Pennsylvania, facility, says she was subjected to sexual harassment from a male manager, then demoted after rebuffing him. Sousa said she reported the problems to HR but that Amazon did nothing about it.

Wigdor LLP Partners is representing each of the women. The law firm also represents Charlotte Newman, a Black female manager at AWS who earlier this year sued for sexual harassment. Newman remains at AWS. She serves as head of the underrepresented founder startup business development group. Among her career accolades, Newman has worked as the economic policy adviser to Sen. Cory Booker and senior legislative assistant to Congressman Dan Kildee.

Petition Points Fingers at Treatment of Women, Underrepresented Groups

Meanwhile, more than 550 AWS staff have signed a petition stating that the cloud computing provider supports “an underlying culture of systemic discrimination, harassment, bullying and bias against women and under-represented groups.”

The complaint targets the professional services unit, in particular. In it, employees asked Selipsky to establish a staff-led council to work with external investigators. The Seattle Times, which reviewed the petition, said workers want to “hold the company to account in how it responds to the investigation and any recommendations made, and to ensure the voice of employees is central to the review process.”

The system at AWS “is set up to protect the company and the status quo, rather than the employees filing the complaints,” the petition continues.

AWS has indeed hired an outside firm to investigate the concerns. In fact, an AWS spokesperson told The Seattle Times that Selipsky did just that even before he received the employee petition. Selipsky responded to the document’s creators. Channel Futures obtained a copy of that July 16 email, which reads:

“Thank you for your thoughtful note on what is a very important topic. I share your passion for ensuring that our workplace is inclusive and free of bias and unfair treatment. I can tell you we are committed to that outcome, as well as to specifically investigating any incident or practice that is inappropriate. I understand you are aware that, given the nature of the concerns here, we have retained an outside firm to investigate and understand any inappropriate conduct that you or others may have experienced or witnessed. This firm is experienced and objective, and I personally will review their independent findings, which will help guide any further actions.

“I know that you have been actively engaged in productive conversations on these issues with the AWS ID&E team, and I would encourage that to continue. Personally, I believe that frank and open discussion is really important.

“Thanks again for raising these concerns. We are all committed, as am I personally, to making sure we get this right.”

The authors requested that Selipsky share the investigation’s findings by Oct. 30. However, he has not …

… committed to a timeline or responded to the call for an employee task force. Selipsky also has not named the firm AWS has hired to look into the charges of discrimination and harassment. Amazon did tell CNN, though, that the company is woman-owned and led.

AWS and Amazon are, of course, not the first or only technology vendors to confront accusations of discrimination and harassment. The problem has run rampant in the sector since its inception. In just the past year, examples of troubling or shocking behavior come from Google Cloud, Exertis, Oracle, Alteryx and Solid8. What AWS does in response to the range of allegations in front of it will be telling.

What’s Going On with All the Personnel Changes?

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AWS’ Adam Selipsky

Finally, with Selipsky officially on board as AWS CEO as of July 5, the cloud provider is undergoing some significant shifts in its employee roster.

Charlie Bell, who has worked for AWS for 23 years, is departing. He was considered a top candidate for Jassy’s role when Jeff Bezos named Jassy as the new CEO of Amazon. Bell also is a member of Amazon’s elite S-team. That group, made up of about two-dozen people, provides strategic advice to the company’s CEO. Peter DeSantis will take Bell’s place as head of utility computing. Prasad Kalyanaraman will take over for DeSantis is the infrastructure and network services group.

This week, too, Kamlesh Talreja, general manager at AWS, said he has taken a job with Goldman Sachs as co-head of engineering. Talreja joined AWS 16 years ago. Also, in April, Splunk snagged AWS’ Teresa Carlson. She had served as vice president of public sector and industries.

On the channel side, Ashish Dhawan recently took on the managing director role under Chris Sullivan. He’s overseeing global partner sales for enterprise workloads, he wrote in a LinkedIn post. Dhawan has moved to the United States after spending three years at AWS India. Vaishali Kasturae now holds Dhawan’s previous position.

Sullivan is new to his job as well. He recently took over as global director of worldwide systems integrators and strategic alliances, replacing David Fuess.

Amazon does not announce personnel changes, nor does it comment on them. One cannot definitively say, then, that all the shake-ups come because of the new AWS CEO. To be sure, some could reflect typical career moves. Others, such as Bell’s, do leave more questions than answers. Even so, the memo Selipsky sent to employees contained nothing but praise.

“Charlie has been instrumental in so many of the most important initiatives at Amazon, it would be impossible to list them all,” Selipsky wrote in a copy of the email obtained by Channel Futures. “His impact has been deeply felt across the entire company and literally across decades. We wish him the best and thank him for all of his contributions and for the innovation he has driven.”

Want to contact the author directly about this story? Have ideas for a follow-up article? Email Kelly Teal or connect with her on LinkedIn.

 

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About the Author(s)

Kelly Teal

Contributing Editor, Channel Futures

Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.

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