Cloud brokers: What are the benefits of using them?

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Cloud brokering is, in theory, a simple enough concept: facilitating the use of cloud resources from one or more providers. Unfortunately, this simple definition has paved the way for many entities to declare themselves a cloud broker. But with so many companies now using the term as a marketing novelty, it has become devalued.

However, the emergence of cloud brokers, who own and operate a control plane, catalogue or console that can automate the scheduling, delivery and access to multiple cloud services, is a real trend hitting the industry.Suppliers from all sides of the industry are converging here, from all points, in both technical and financial positions.

451 Research's Technology Business Insight report on cloud brokers reveals a large market and wide spectrum of functions brokers can perform that extends from basic introduce and configure services, such as aggregation, federation, selection, integration, migration and fulfilment, to capacity management and optimisation, billing, vendor management, contract negotiation, and contract ownership. The term 'broker' encompasses all of these functions.

Brokers deal in multiple services, providing access, enablement, fulfilment and even potentially contract ownership. Regardless of sector or vertical, their raison d'etre is to arrange a transaction between a buyer and a seller.

In the IT world, brokers have existed for decades – vendors and service providers have relied on networks of distributors, resellers and SIs to match their products to their revenue-generating customers. But cloud has changed is the nature of these roles.

The cloud means intermediary parties must operate dynamically and offer services on-demand. In the traditional model of IT, distributors, resellers and SIs have not been consumption-based entities.

This used to mean long sales cycles, fulfilment measured in weeks or months and no guarantees that a product would be in stock. In the cloud world, users expect services to be available as soon as they are requested, based on users' experiences with consumer technology, which have set a high benchmark.

And here lies the big difference between the traditional IT supply chain and the new cloud supply chain: If cloud is an on-demand version of computing, brokerage is an on-demand version of IT procurement.

New markets and opportunities are emerging as a result: vendors are selling technologies to create and operate brokers, and cloud broker service providers are emerging, from startups and established players. And indeed within enterprises many IT departments expect to act as brokers themselves through ‘IT as a Service’, matching internal demand with external providers.

Broker service providers, whether they are a third party or internal, need to deliver to consumers on-demand access to disparate and aggregated cloud resources, either natively by the broker itself or federated directly from the cloud supplier. Broker-enabling technology vendors supply tools to create brokers. These tools aren't just cloud management platforms; cloud brokers service provider also require tools for billing, metering, procurement, and security.

To deliver a money-making service, a broker service provider needs more than just a platform to start, stop and move workloads. A whole ecosystem of service providers, service consumers, cloud broker service providers and cloud enabling technologies is needed for the broker model to be more than just theory.

But is a cloud broker something an enterprise really needs, or is it just a buzzword contrived by the marketers? One thing's for sure: enterprises are keen to embrace cloud, but they want the freedom to choose which deployment models suit them best – the so-called 'best execution venue'.

How many enterprises have sprawling and disjoined IT estates consisting of the likes of Salesforce, Office, Google and AWS? Surely the majority. Imagine how much time and effort could be reduced by using a single broker to deal with all these entities. But more importantly, how powerful would an IT estate where all these entities interact together be? Perhaps herein lies the true value of a cloud broker.

Dr Owen Rogers is a senior analyst of digital economics at analyst house 451 Research