Jon Hathaway

Jon Hathaway

The Ethical Reseller: The Balance of Profitable and Ethical

The balance between being profitable and being ethical

Like all reseller and partner programs, vendors and manufactures make goods and services available for a discounted rate as a reward or in exchange for value added services. These services are then made available to end users, capitalizing on the reseller’s own network, reputation or value that is added to the original offering.

The challenge, however, is how transparent should a reseller be with their end customers and what, if any, discounts should be passed on?

The common approach of the current breed of modern capitalists is that it’s ok to do whatever it takes to make a profit, regardless of how it affects the customer. “As long as the customer thinks they are getting value for their money, why should I care?” is a typical mantra that I’ve heard over and over again from many of my peers.

This becomes particularly problematic when programs, initiatives and end user benefits are hidden, abstracted or simply not communicated to the end users by the middle-men – their trusted Partners and Resellers. This is especially true when an end user themselves would benefit from the initiatives if they went to the vendor directly.

Amazing cost saving opportunities with AWS

That brings us to AWS. AWS is undeniably the momentum behind the cloud and DevOps wave we find ourselves riding. As they continue to add more customers, more partners and resellers are also added in a hope to get a piece of what, for the foreseeable future, is an ever increasing ‘pie’ with enough to go around. However, many AWS partners have a ‘don’t tell’ modus operandi, in which cost saving recommendations are not communicated or passed on to their end users.

In no area is this more true than with the case of Reserved Instances. A Reserved Instance from AWS provides the ability to get highly discounted EC2 instances, and a few other services, in exchange for committing to a certain number of instances or capacity for a period of time. The savings are of great benefit to end users, especially startups and other companies that are trying to grow with savings upto 80% in some cases.

The Reserved Instance program consists of three options that provide discounts – no upfront, partial upfront and full upfront. As the names suggest, the no upfront option gives the consumer a discount on their monthly spend just for committing to running a resource of that type and size for a period of time – 1 or 3 years typically. Partial upfront and full upfront are models in which you pay a portion of the total running cost upfront and then benefit from an even higher discounted rate.

Subscribing to Reserved Instances is an incredibly simple process – Reserved Instances are nothing more than an accounting exercise; if you have those resources listed in your bill for that month, then you will get the discounted rate. However, if you do not have one of those resource types in your bill, you will get billed as if you did. Very simply – you committed to a set of resources for a specific of time and you will ‘pay’ that amount for the period of time you committed to.

Sleeping well at night

The murkiness however is in the details. End Users and Partners/Resellers can purchase Reserved Instances. Resellers have an additional bonus; the Reserved Instances that a reseller commits to can be shared across every resource from every customer that is in their reseller account. The same principle applies – the resources have to appear on the reseller bill to benefit from the discount. This helps Resellers increase their profitability as they get the heavily discounted rate from AWS, but still charge the end user the List Price. This isn’t the underhand part that causes so many issues.

An issue comes to light when the Reseller themselves haven’t communicated to their customers that there are benefits to be had that would dramatically reduce their AWS costs. For many resellers, this is the only way that they survive every month, by ‘hiding’ possible cost savings from their end users. The Reserved Instance program is available to ALL AWS customers and therefore it isn’t a perk for resellers looking to grow their profit margins. The benefits are available to all.

The HATech Difference

Like all reseller and partner programs, vendors and manufactures make goods and services available for a discounted rate as a reward or in exchange for value added services. These services are then made available to end users, capitalizing on the reseller’s own network, reputation or value that is added to the original offering.

The challenge, however, is how transparent should a reseller be with their end customers and what, if any, discounts should be passed on?

The common approach of the current breed of modern capitalists is that it’s ok to do whatever it takes to make a profit, regardless of how it affects the customer. “As long as the customer thinks they are getting value for their money, why should I care?” is a typical mantra that I’ve heard over and over again from many of my peers.

This becomes particularly problematic when programs, initiatives and end user benefits are hidden, abstracted or simply not communicated to the end users by the middle-men – their trusted Partners and Resellers. This is especially true when an end user themselves would benefit from the initiatives if they went to the vendor directly.

As part of our FY2018 initiative, we are offering everyone a free Cost Analysis and Cost Savings Assessment for their AWS and Azure accounts. If there are ways you could be saving money, you can guarantee we will find them.

Contact us and be a part of the multiple millions that we have saved our customers over the course of their projects.

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