Eric Gales on 20 years of AWS and what comes next for the Canadian channel

Robert Dutt: Hello and welcome to In The Channel from ChannelBuzz.ca. I’m Robert Dutt, editor of ChannelBuzz.ca, joining you for a special Friday episode. Thanks for pressing play.

On March 14, 2006 – Pi Day, for those keeping track – Amazon Web Services launched S3, its first generally available cloud service. Tomorrow marks 20 years since that moment, and whether you were paying attention to AWS back then or not, it’s hard to argue that any single technology shift has reshaped the channel more than cloud.

To mark the occasion, I sat down with someone I’ve known for close to 20 years in this industry – Eric Gales, the president of AWS Canada. Eric’s been at the center of pretty much every major platform shift in the channel. He ran Microsoft Canada during the cloud push, led VMware Canada, and has been heading up AWS Canada since 2015. So there aren’t many people better positioned to reflect on what the last two decades of cloud have meant for Canadian partners, and where AI is taking things next.

This one’s a conversation, not an interrogation. I hope you enjoy it. Here’s Eric Gales from AWS Canada.

Eric, thanks for taking the time. I appreciate it.

Eric Gales: My pleasure, Rob. Great to talk to you.

Robert Dutt: We’ve known each other for quite a while, going back to your Microsoft Canada days, and it’s been close to 20 years now. Before we get into AWS at 20, when you look over the arc of your career in Canada – Microsoft, VMware, AWS – you’ve been fortunate enough to be with and to lead some really transformative companies. What’s the single biggest thing that you’ve seen that’s changed about how technology gets to market here in Canada over those two decades?

Eric Gales: Yeah, you know what, as you indicated, it’s been fascinating. It’s been super fun to be in the tech sector. I’ll take a few things. One is, I think about it as eras of computing. I actually started at the dawn of the PC era, the end of that mid-range era. The PC changed everything, and then local area networking, and the internet, and mobile computing. Then my time in Canada – when I first came to Canada I worked for Microsoft, and I worked for Compaq before I came to Microsoft.

In this era, technology has only become more important to more customers. That’s one storyline, is that it’s become more and more important. One thing I think is the most profound change in recent times is, it was always just the domain of technologists. I was working for technology companies, selling to technologists. Now, because the impact of technology is so profound, it’s a lot more about businesses, and business leaders, and lines of business understanding what the technology can do. I think that’s been the biggest evolution, and certainly in the last decade, is the importance that everybody within an organization appreciates the importance of technology, and what it can do, and how to apply it.

Robert Dutt: That has been pretty transformative for the channel, hasn’t it? Selling into line of business, selling into the C-suite rather than going to the CIO. That’s a good point. For all the technology changes, that’s kind of been the thing, right? Not a technology, but rather the “who cares about it” part of it.

Eric Gales: Exactly. I think, just like as someone in this business myself, if I look out to that partner ecosystem, they’ve been on that same transformation that creates new challenges for every partner, as well as new opportunities. Those that have been most successful have of course been the ones that continue to evolve their businesses to meet the needs of, ultimately, the end customer.

Robert Dutt: When AWS launched S3 back on Pi Day 2006, I don’t think many folks in the Canadian channel were paying attention on that day in particular. As you moved through your career path, when did you first realize, “Okay, cloud isn’t a buzzword. This is a fundamental change both in technology, and it’s going to rewire the channel”?

Eric Gales: Yeah, I think there were two things back then. One was, at the time, of course, Amazon was not synonymous with being a technology provider. It was a consumer of technology. So point one was, “Amazon’s launched something.” I didn’t work for them then, and I would be in that community that says, “Why would you buy those services from a bookseller?”

So that was one dimension of it. And then the second thing was, there had been managed services before, but I think the thing that a lot of people missed for a while was, a few things had changed. The internet was ubiquitous. People were using the internet for lots of different things. And so it was that new transport that the internet gave you that enabled a company like Amazon to come along with AWS and offer a service that was available to everybody.

And then it also changed the way that people thought about consumption. Because up until that point, most software and consumption of services was a long-term contract or a license. And this was pay as you go, use on demand. It was a whole new construct. And I think it took a while for people to realize that AWS had changed a whole set of characteristics about how technology was going to be consumed.

And the rest is history. That whole idea took off because it just made so much sense to customers, and many partners got behind that very quickly in terms of seeing the opportunity to transform how they interacted with their own customers.

Robert Dutt: You’ve said, and I don’t think this is too much of a secret to the industry, to anyone who’s observed the Canadian business and technology scene, that Canadian businesses are slower to adopt new technology than especially the US, but also European counterparts. There’s that kind of tendency to let someone else see where the mines are in the minefield before you go walking. Looking back over 20 years of cloud in Canada, do you think that gap has closed, or has that sort of conservative approach to technology shifted forward to a new frontier? Are we going to see the same thing with AI now?

Eric Gales: I think, you know what, when I first started working over here with the cloud 10 years ago, a lot of my conversations were about why cloud and why it was important, both with partners and end customers. And at that time, I had felt this sort of theme that Canada was slower to adopt technology. And I felt there was a real opportunity there because everyone was at the beginning. And so here’s an opportunity for us to take these capabilities to our customers and help them to play catch up with other jurisdictions.

And I learned back then – I’d already learned by then – that it was important to point to Canadian customers to make it okay. To avoid the sort of “first to be second” thing. “Canadian customers are doing this.” And so we went out of our way early on to get key brands on our platform in every industry so we could make it okay.

But I’d say in aggregate, yes, we’ve made a huge amount of progress, but the Canadian landscape moved a little bit more slowly than other jurisdictions. I see the same opportunity now, but the landscape has changed, the circumstances have changed. I think politically, geopolitically, there’s a new opportunity, particularly with AI. And I think there’s a great opportunity for Canada, for Canadian firms, for Canadian government, and for Canadian partners to take this opportunity to really see if we can accelerate the consumption and the application of this technology to real business problems and productivity challenges.

And again, once again, the world is all at the same starting point. So I think there’s a great opportunity here to accelerate the Canadian adoption of these kind of capabilities in this next era.

Robert Dutt: One of the things that certainly arguably helped close that gap, helped make cloud much more de rigueur here in Canada, is that we kind of eliminated the “okay, so my data is going to live where?” question. For you guys, rolling out Montreal in 2016, I think it was, and Calgary a couple years ago – not just data center announcements, these were things that unlocked data residency and sovereignty conversations that Canadian partners and their customers really needed. As those conversations shift from “where does my data live” to “who controls my AI models and my training data,” how does that change the work that partners do and how they frame that to customers?

Eric Gales: Yeah, I think it’s interesting again, but go back to the history of it here. Many things have changed that have stayed the same. The importance of security – that hasn’t changed. Arguably, it’s more important. The management and the financial controls of technology they might be using – those haven‘t changed. They’ve changed the application of those, but there are some key themes.

This question of sovereignty and control of one’s data and the policies around it – those things are very important. They were very important to us. One of the reasons that we built our infrastructure here is the control of this for our customers.

That’s why in this AI era, the same things apply. And so we’re super focused on maintaining the same principles that allow customers to use these models with their data in a secure way. That means that their IP doesn’t leak out somewhere. We don’t use their data for anything else. And so to us, the same philosophical approach and the same technical approaches to making sure that customers can be confident that there’s a way of taking advantage of all of these capabilities without compromising the security, the privacy, and their own intellectual property. That is a key feature of our value proposition to our customers – we help you get all of the benefits of these capabilities without the risks associated with using models which sort of live on the internet somewhere.

Robert Dutt: For Canadian VARs, MSPs, folks who’ve been around since the early days of cloud, the ones who made that transition from selling boxes to selling services – what did the ones who succeeded have in common? And sort of the flip side of that as well, what did the ones who struggled to make that transition miss?

Eric Gales: Yeah, I mean, I think – you’ve heard me say this before, Rob – but I’m a maniacal believer that the only sustainable competitive advantage is innovation. And whatever business you’re in, if you’re not innovating, if you’re not willing to change, then you’re losing. It’s just at what rate.

And that’s not a new problem. I’d put it out there that, think of any company that you knew that was top of its game and then it wasn’t. In whatever industry, I would posit that you could trace it to a lack of innovation on product, customer service, supply chain, whatever. And that’s the case with the IT sector and with partners. If you think that you’re going to be able to hold the tide back in a world that’s changing, that’s going to come to a stop.

And I’d say the characteristic of those partners that were able to most benefit from these eras of computing were those that were prepared to transform how they were going to make money, where they were going to make money, what they were going to contribute to their customers. And those that didn’t do that are the ones that typically end up in a position where their business isn’t sustainable anymore because that market went away.

When I started in the industry, my first job, I was an installation engineer, and there’ll be some people out there – maybe you’re one of them – that remember, we used to put Harvard graphics cards into PCs. People paid money for us, for me, to do that work. And then, you know, graphics cards came in the PC. And so that business went away. And that’s the case. Where the money can be made, where you can build a profitable business, it’s been evolving.

But the actual surface area to build businesses and be partners that help customers translate this technology into value for them – that opportunity has only got bigger. And that’s the case today. If you think about the potential for AI and AI services, there’s just a tremendous opportunity out there for partners to help customers translate these capabilities into value for their businesses.

Robert Dutt: You guys have talked about partners being the lifeblood of AWS, I think the language that the leadership team has used. The fact that partners are generating $7 for every dollar of AWS service sold. That’s a great number. But for a Canadian MSP who’s in that long tail of the channel, that isn’t a Deloitte or an Accenture – maybe they’re a 15-person shop in the GTA or Calgary or wherever they may be – what does that $7 actually look like for them, and where is that value being created?

Eric Gales: Yeah, I’d say there’s a few different areas. So if you think about the continuum, there are many customers out there who have yet to move their on-premises infrastructure to the cloud. And so there is a whole decade’s worth of work or more in helping customers to transform what they’re doing on-prem into the cloud. And there’s a necessity to do that, because the opportunity to leverage these new sets of capabilities like AI, for example – they have a dependency on having proximity of your data to these cloud services.

And so at one end of the spectrum you’ve got migrations and modernizations of legacy technologies and architectures to the cloud. And at the other end of the spectrum, there’s building new capabilities, using the features of the cloud, using these new capabilities with AI. And we see three big categories there: helping businesses generate more employee productivity, helping streamline business processes and doing new processes in new ways, and then also thinking about new business models.

And so there’s a continuum. The technology itself is a set of tools that can be applied to every business. But the services around that, the people and process part – that’s where that $7 is. That $7 is the people and process, largely, around helping customers to adopt and deploy and take advantage of these capabilities.

And then there’s both the SI partners and then ISVs that live on the AWS platform. And we’ve tried to create new opportunities for those too, with things like Marketplace, to help our customers be able to consume software from our partners that build software that runs on AWS too.

Robert Dutt: You guys rolled out some pretty significant program changes for 2026 – growth incentives, different benefits, changes to deal registration. For a partner who’s been doing this for a while, what’s sort of the biggest practical change they’ll feel day to day this year in terms of being an AWS partner?

Eric Gales: Yeah, I think a lot of those changes are built in sympathy to what we were hearing from our partners and from our customers, to allow us to streamline the way that we’re working with our partners, to allow us to focus more explicitly in solution areas as well as specific industries.

Think back to some of my opening comments at the beginning there – it’s more important than ever to be able to translate these capabilities into the language of the customer. And so we have a lot of focus on industry, for example, to help our customers put this technology into context.

And so thematically, we’re trying to translate everything we’re learning from our partners and our customers into programming that allows us to jointly focus on the right things. And for us to make sure we’re getting the right support to the right partners in the right places to help them to scale their business.

We think this next era of compute, particularly led by AI, provides a tremendous new opportunity for our partners to translate this technology into value for our customers. And so we’re trying to line up our execution and programming in a way that is much clearer, simpler to engage with, more transparent about what we think is important, and allows us to get the right support to the right people at the right time.

Robert Dutt: You talked about the idea of AI kind of resetting that starting line, creating a new starting point where everyone’s on a more even footing because, like we were with cloud, it’s a new start. A lot of MSPs that I talk to are still figuring out the basics of it – the where to start, what’s real, what’s hype, how do I find value for my customers? I think you touched on that a little bit in the last answer. But if you were advising a Canadian MSP right now on their first meaningful AI conversation with a customer, what would you tell them to focus on?

Eric Gales: I think it’s all about business value. Whenever you have a new era of technology like this, there are a bunch of people just trying to sell stuff. And customers want this stuff to be translated into value for them. And so I think really looking for where is the business value of the application of this technology, and being the translator of that for customers.

Because there are tremendous opportunities for AI and generative AI and symbolic AI and machine learning to be applied in whole new ways with our customers. And what we’re finding is our customers need help to translate that into value for them.

And so the real opportunity is to identify where are the sweet spots today that you can take a value proposition to a customer that is all about real business value and the “how” part. How do they get that value?

And so I think at this stage, that is most important. There’s a high noise-to-signal ratio right now in this world because it’s moving so quickly. And customers are looking for people that can help to translate all of this noise into signal that’s valuable to them. And so that’s my general advice: find the opportunities where you can translate all of this stuff into real business value, whether that’s a particular use case, a particular portfolio of customers. And at the same time, every partner needs to have a business model here, a business that supports scaling and growing into the future, to translate this opportunity into business value for themselves.

Robert Dutt: And sort of the flip side of that, what’s the biggest risk for a Canadian partner who looks at it and says, “Okay, still early in the game, going to wait for clarity”?

Eric Gales: Yeah, I’d say that there can be no waiting. What we’re finding is that every customer, every partner needs to get moving. There’s a huge amount to be learned by doing here, and every era of compute that you and I have been involved in and the IT sector, it has gone at a faster rate than the previous one. And this one is going at a rate that we’ve never seen before.

I think last year, 160,000 customers volunteered that they are adopting some form of AI. And that’s the highest rate of adoption we’ve ever seen of any technology, including internet and mobile phones. So this is happening. One needs to be moving.

And there is a certain amount here, I think, for partners, of moving the train whilst laying the track. Those two things are important. I think the folks that wait will find themselves at a disadvantage just because it’s moving too quickly.

And in fact, you have to build a business model, just like we’re doing here from my own organization, that is dynamically learning and evolving, because the rate of change here and the applicability – I mean, if you think about two years ago, 18 months ago even, you and I were talking about LLMs. But now we’re talking about agentic workflows. We’re past the LLM. It’s really about the application of this technology with agents. And so even in that very short period, the applicability of this technology and how people consume it has changed pretty profoundly.

And so I think it’s super important every partner starts moving, because there’s a lot to learn and a lot to keep up with as this thing continues to accelerate.

Robert Dutt: All right, I’m going to ask this one just a little bit tongue in cheek, maybe. 2006, you arrived in Canada and AWS launched. 20 years later, you’re running AWS Canada. If the next 20 years of cloud and AI are as transformative as the last 20 years have been to this business, to this business model, what does the Canadian IT channel look like in 2046? Are there still resellers and MSPs, or has everything been reinvented? Just crystal ball for me.

Eric Gales: I think a lot is going to change. There’s no doubt about that. A lot is going to change. We very much see that, just as has been the case to date – if you think about it, IT has been about augmenting and working with humans and human processes and business processes. It’s created new business models. It’s allowed us to do things in new ways and to live, work, and play in all different ways.

This next era of the application of AI, in particular at scale, follows the same themes but creates incredible new opportunities. So I think we’re going to see a tremendous amount of change in terms of how we live, work, and play with this technology. But within the context of that, tremendous opportunities to be part of the solution versus part of the problem. Part of helping people to embrace and use and deploy all of these capabilities in ways that are value-added and respecting the things that we know are important – security and privacy and intellectual property protection. There is a tremendous opportunity, I think, ahead.

But I would not underestimate how profound the change is going to be over the course of, if you take that 20-year horizon, tremendous change. I think even over the course of the next few years, we’re going to see a lot of change in terms of how we work and how we live and how we interact with each other.

Robert Dutt: All right, a more sane final question for you, especially since it is the 20th birthday of AWS. If you could go back to 2006 and tell the Canadian channel one thing about where the cloud was going to take them, 20 years on to 2026, what would it be?

Eric Gales: I think, drafting off what we just talked about, it’s: don’t underestimate the opportunity here. When you have a new set of capabilities, back then with the birth of the cloud, there were people that embraced it very early on and were real beneficiaries of it. There are some partners I can think back to at the beginning, when I first came here to Canada, that really embraced that opportunity. And those that waited – those that waited missed out on a tremendous opportunity.

So I think I would go back, if I could, and just try and do a better job of helping people to appreciate what the opportunity was here and why the people that were early adopters of it had the most to gain.

And I think we’re in that moment now with AI. So the same again – I think tremendous opportunity here for Canada, for Canadian companies, Canadian partners to be the leaders in how these capabilities get applied to businesses and governments and how we work and live together. And so I’d say, lean in. Now is the time to lean in and work out how you can leverage this stuff to build a business and help businesses.

Robert Dutt: All right. A very happy 20th birthday to AWS. And Eric, thanks so much for taking the time.

Eric Gales: Thanks, Robert. Great to talk to you.

Robert Dutt: There you have it. Eric Gales, president of AWS Canada, on 20 years of AWS. Again, the official anniversary is tomorrow, March 14th.

I thought Eric’s point about the Harvard graphics card was a great one. The work disappears, but the opportunity doesn’t. It just changes shape. That’s been the story of the channel for as long as I’ve been covering it. And that’s the story again right now with AI.

Thanks to Eric for joining us. And thank you for listening. The podcast will be back on Monday with In Case You Missed It, our weekly roundup of some of the headlines that might have flown under the radar this week.

And next week on In The Channel, expect to hear about microsegmentation and why “contained by default” is replacing “detect and respond,” what Barracuda‘s latest threat data says about how fast ransomware actually moves, and why the network visibility your business relies on might have more blind spots than you think.

Between now and then, we’d invite you to subscribe to or follow the podcast in your podcast app of choice. And if it allows you to, please leave a rating and review.

Until next time, I’m Robert Dutt for ChannelBuzz.ca, and I’ll see you in the channel.