The Next Big Thing
Posts about next generation technologies and their effect on business.

What is a cloud broker?

Cloudbroker.pngForrester recently released an analysis of the concept of a Cloud Broker. Although there was much to agree with, I actually view it a bit differently. They have a too hardware centric view for my taste. This is not something new and we (in HP) have been talking about it for years. My view is that the various components of a cloud approach build up on top of each other as I’ve described before.

 

The various market components can interact in different ways to provide value to the marketplace.

  • Cloud Infrastructure provider – Infrastructure operators have been around for decades. Organizations who specialize in this area focus on the automation, security and performance needed to take what has been a traditionally business by business approach into a multi-tenant solution that can be charged “by the pound”. This is the core of the IaaS space.
  • Software vendors – These players are critical to the cloud since their solutions are what actually add the business value on top of the lower cost solutions provided by the Cloud Infrastructure providers. Their software (and just as importantly their licensing) needs to change to enable the cloud shift for organizations. Taking advantage of the many cores that can be applied to the new leveraged environments and to have the solutions fail over gracefully when needed with no downtime is something the software vendors need to continue to address.
  • Industry consulting – As more of the infrastructure operations and management functions are provided by 3rd parties, the need to integrated it all together in a unified, business value generating solution still remain. Consultants still play a role by having the deep expertise that can be brought to bear on the strategic cloud move.

Businesses specialize at the intersection of these IT industry components:

  • SaaS – this is where the software intellectual property mentioned earlier meets the cloud infrastructure. Business application functionality is offered as a service by subscription. The consumer does not normally see the IaaS issues that may reside under the SaaS layer.
  • Cloud Integrator – This is where the IaaS capabilities are used by consultants to help modernize both the infrastructure and the application portfolio and make it operate effectively in this new environment. Since the value needs to be generated against the organizations business model, integrating the various components can be critical to effective use of the cloud.
  • BPO – Business process outsourcing has been around for decades and it usually involves access to both the software IP as well as the personnel with the industry (or at least process skills) required to take on specific business functions. It allows organizations to concentrate on areas where they want to focus and offload other business functions to experts in that area. Some organizations have relabeled this to BPaaS so it can align to the XaaS abbreviation model, but BPO has always been cloudlike.

Finally at the hub of these intersections is the cloud broker. This function may do all of the items previously mentioned or just perform 3rd party administration ensuring that a unified solution meets the needs of the business.

 

They need to have expertise in a wide range of hardware capabilities, ranging from the servers through the desktop and mobile platforms – after all the computer you have with you all the time is likely a smartphone.

 

They must also understand the analytics and user interface issues to weave together all these possibilities into a solution that is coherent and effective for the business. No one wants to be distracted by user interface or data inconsistencies. The elimination of latency through the use of automated workflow and techniques that allow people to focus on the anomalies and automate “normal” is key here as well.

 

There can be a range of capabilities in this cloud broker space ranging from the simple sourcing manager all the way though the business model integrator who deeply understands the business and technology objectives of the organization and is constantly on the lookout for technology solutions that disrupt the status quo. They need to be experts on the kinds of problems that usually hurt cloud deployments. Some of the descriptions of the cloud broker function that are out there make it seem like an IT management function, but to me its roots are deeper into the business needs and expectations than that.

 

What is common to this range of cloud broker is that the IT complexities of managing the workload and the vendors should be hidden from the end user – and to some extent the end business. After all if they wanted to know these details and manipulate the controls, they should have someone on staff that is performing the function, instead of purchasing it as a service. Many CIOs are going to spend much of their future effort in the cloud broker function, among other things.

 

Although these cloud broker function may seem like a vision, there are a few organization that HP supports today where this level of performance is expected and delivered.

 

There are some recommendations I can agree with though:

1)      Understand your window of opportunity – We can all see this happening. Know what is happening in the marketplace and if you retain your infrastructure what is the price point where you would change to a different model. If you don’t understand this point, you are passively deciding to stick with the status quo.

2)      Build trust with the right partners – I used the term partners here because I’m talking about a close relationship. Understand where they are headed. What are the lock-in issues? How does that make you feel? The farther out your headlights shine and the sooner the direction and issues are understood the less likely you’ll over-steer later.

3)      Plan to invest – There are many skills involved. You may not have them in-house. You will likely need to do some pilots to understand the implications financially, behaviorally and on the staff itself.

Comments
StrategicBlue(anon) | ‎08-20-2011 08:51 PM
The term Cloud Broker is quite broad. Much is made of the technical side, but the financial side can be just as important in terms of being a disincentive to cloud adoption if not structured to suit the client. Cloud providers have certain preferences when they sell...in particular they will offer discounts for prepayment as this offsets their Capex on equipment. This clashes with the customers' preference for an opex-only model where they delay payment as long as possible to try to match their customer revenues. Financial intermediation between cloud provider and cloud user is hence the role of the cloud broker-dealer...buying from the provider on terms to suit the provider, and selling to the user on terms to suit the user. Key to success is to only step into the billing chain, and to leave the technical side entirely to whoever the cloud user selects.
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