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Why would they be in a good negotiating position with AWS, given that they have to be on AWS to even exist in the first place? I don't get why amazon would ever negotiate down with these guys, they're the ones who absolutely need the product.



Like any reseller, they are aggregating demand, and then negotiating volume discount with the provider. Resellers will work with multiple cloud providers.

In principle at least, customers can become loyal to the reseller and their value-added services, and the reseller can influence their clients to move to other providers. Obviously hosting is one of the stickiest SaaS services around since switching costs can be monumental, but the theory still applies.




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