At the Washington summit, AWS sent a clear signal: it wants government agencies and their service contractors to migrate from traditional infrastructure to its cloud platform, and it is investing substantial funds to make that happen.

Through the new Intelligence Community Accelerated Modernization Framework, the hyperscaler will offer intelligence agencies still running workloads on-premises up to $1 billion in outcome-based credits. These credits are tied to migration milestones, not contract signing, and are valid through October 2030. AWS stated in its announcement that CIA Director John Ratcliffe, in his first public remarks since taking office, confirmed the agency will use these credits.

Another initiative reaches further down the supply chain. On Tuesday, AWS announced that its Secret Cloud for Industry is now generally available, allowing licensed defense contractors and research institutions to run classified workloads on the Secret Region infrastructure already used by the government. Northrop Grumman became the first contractor to go live on the service. AWS also established a $20 million accelerator for other participants in the defense industrial base, including qualified contractors, federally funded research and development centers, independent software vendors (ISVs), and system integrators.

Judging from these two announcements and the exchanges among executives at the event, AWS is signaling that its public sector strategy relies not only on direct engagement with agencies but also on advancing through its partner ecosystem.

Rishi Bhaskar, AWS's global public sector partner leader, distilled the company's partner proposition into three parts: build, monetize, and scale.

Partners deploy solutions on AWS infrastructure, leveraging the hyperscaler's compute power and expanding their global footprint. Bhaskar told Channel Dive: "If you run a business as a channel partner, AWS is the best platform for building an agency-type business."

Second, partners monetize through AWS programs, with managed services being the clearest demand signal Bhaskar has observed. As migrations advance toward agentic AI stacks, deployments become complex enough that agencies need someone to operate them, and AWS has built a suite of products driving partners to achieve managed services capability certifications.

The third part is scaling, which Bhaskar links to the breadth of the partner ecosystem and AWS Marketplace as a mechanism for reaching end customers.

Federal migration

Market data provides quantitative support for AWS's proposition. Omdia (a sister company of Channel Dive) reports that the U.S. federal channel market was $75.2 billion in 2025, with expected growth of 4% in 2026, driven primarily by AI, managed services, and cybersecurity. Managed service providers stood out, growing 14.1% year-over-year, far outpacing the ecosystem average growth rate of 2.4%, as agencies turned to contractors to maintain operations after DOGE layoffs.

AWS has also extended a cost-review program to government customers. Federal, state, and local agencies are now eligible for the AWS Business Value Realization (BVR) program. Launched by AWS in June, this outcome-based partner mechanism provides partners with benchmarks, ROI models, and change management playbooks to demonstrate the value of deployments. Bhaskar noted that proving ROI in the government sector is harder than in the commercial sector—procurement cycles are longer, stakeholders are more numerous, and operational success metrics are more complex—so BVR gives partners a structured approach to linking technology spending with mission outcomes.

For partners, AWS presents both opportunity and pressure. Agencies are being asked to accelerate innovation and adopt generative AI, yet still must meet strict security and data residency requirements and demonstrate clear returns to oversight bodies. Traditional relationships that defined government IT contracting often focused on rewarding initial outcomes. AWS's difference lies in offering financial incentives to partners who maintain close collaboration with agencies, prove their impact, and scale effective results.

Whether these credits can change behavior remains an open question. Outcome-based incentives only work if agencies and contractors can reach the milestones that unlock credits, and classified modernization can move slowly. But AWS has removed two common obstacles: migration costs and the infrastructure wait times that once took months to set up. The next move depends on partners.