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Understanding the cloud service broker model

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cloud broker

A cloud broker is a third-party individual or business that acts as an intermediary between the purchaser of a cloud computing service and the sellers of that service.  

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Understanding the cloud service broker model

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1. A cloud broker is a third-party individual or business that acts as an intermediary between the purchaser of a cloud computing service and the sellers of that service. In general, a broker is someone who acts as an intermediary between two or more parties during negotiations.

The broker's role may simply be to save the purchaser time by researching services from different vendors and providing the customer with information about how to use cloud computing to support business goals. In such a scenario, the broker works with the customer to understand work processes, provisioning needs, budgeting and data management requirements. After the research has been completed, the broker presents the customer with a short list of recommended cloud providers and the customer contacts the vendor(s) of choice to arrange service.

A cloud broker may also be granted the rights to negotiate contracts with cloud providers on behalf of the customer. In such a scenario, the broker is given the power to distribute services across multiple vendors in an effort to be as cost-effective as possible, in spite of any complexity that negotiations with multiple vendors might involve. The broker may provide the customer with an application program interface (API) and user interface (UI) that hides any complexity and allows the customer to work with their cloud services as if they were being purchased from a single vendor. This type of broker is sometimes referred to as a cloud aggregator.

In addition to acting as an intermediary for contract negotiations, a cloud broker might also provide the customer with additional services, facilitating the deduplication, encryption and transfer of the customer's data to the cloud and assisting with data lifecycle management (DLM). This type of broker is sometimes referred to as a cloud enabler.  Another type of broker, sometimes referred to as a cloud customizer or white label cloud service, selects cloud services on behalf of a customer, integrates the services to work together and sells the new offering under their own brand

The business model for cloud brokerage is still evolving. At its simplest, the customer may hire a broker at the beginning of a project and pay the broker an hourly fee for their time. A broker providing more robust services, however, may charge the customer on a sliding scale, depending on what services the customer contracts for. A broker may also partner with one or more cloud service providers and take a small percentage of the cloud provider's profit as remuneration once the customer has arranged service.

2. A cloud broker is a software application that facilitates the distribution of work between different cloud service providers. This type of cloud broker may also be called a cloud agent.

This was first published in September 2013

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