Cloud broker or cloud provider: Who says you can't be both?

Gina Narcisi

Cloud brokers emerged when enterprises began to consider the cloud for more than just storage. Customers have begun adopting cloud for human resources and sales software and unified communications and collaboration, and the cloud broker helps businesses manage and integrate these disparate cloud services.

The cloud broker role also is evolving. While many brokers have formed partnerships with cloud service providers to simplify integration and secure discounted pricing for customers, the time may have come for them to develop their own cloud services in order to stay competitive.

Can a cloud broker be a provider too?

A cloud broker is an integrator that pulls together multiple, third-party cloud services. Customers expect them to be objective, trusted advisors, in theory, said Amy DeCarlo, principal analyst for security and data center services at Washington, D.C.-based Current Analysis Inc. If a broker adds its own cloud offerings to its business model, customers might see that as a conflict of interest. "It may in the cloud broker's best interest to not offer services directly, and act as a pure integrator in order to give its customer best-of-breed solutions," she said.

There is a way to avoid the appearance of a conflict of interest. Cloud brokers can offer their own flavor of cloud services as long as the offerings are complementary, not competitive with their provider partners' services, DeCarlo said.

Appirio, a cloud service broker, offers its customers both a pure advisory service and a technology focus, with integration capabilities among its public cloud provider partners -- Google, Amazon, Salesforce and Workday -- said Glenn Weinstein, Appirio's chief technology officer. "Regardless of what we are helping our clients with, we always bring to bear our own Cloud Enablement Suite (CES) -- Appirio's offering that organizes the entire integration project, everything from implementation to monitoring of their cloud platforms," he said.

More on the cloud broker business model

The cloud service broker must differentiate as market matures

Cloud broker skills in high demand as cloud adoption grows

A cloud broker can be a cloud provider's best friend

In addition to CES, Appirio has three Software-as-a-Service offerings for its clients that work with Google, Salesforce and Workday platforms. Appirio's Cloud Factor ties together Google Apps with Gmail, and the broker's Cloud Sync and Cloud Storage offerings link Salesforce, Google Apps and Amazon Web Services to extend the capabilities of each platform for customers, Weinstein said. "Appirio is filling two big spaces for customers by offering both the product-ized integration across cloud systems, and also a customized service for managing cloud platforms," he said.

While services can be layered on top of cloud provider offerings for added value, cloud brokers should remain unbiased, said Stefan Ried, principal analyst at Forrester Research Inc. "If brokers had their own infrastructure offerings, they would not be shopping around for a better price for another provider's Infrastructure as a Service offerings for customers," he said.

Rather than developing cloud services, a cloud broker's greatest strength is its expertise in unifying services and tracking down the best prices, Ried said. "Brokers are often very sophisticated when it comes to understanding licensing models that can be very complex for some customers [and] who may not be able to navigate that process on their own."

Cloud providers offering cloud broker services

It might not in a broker's best interests to spin up its own cloud provider business, but cloud service providers can expect an easier transition into cloud broker services. Rather than adding their own portfolios of integration services, some providers have begun tapping into the brokerage market via cloud marketplaces, Current Analysis' DeCarlo said.

"I think that there is a potential role for cloud service providers to serve as a cloud broker, and tie together services that they may not offer themselves through a marketplace while doing some integration and support work," DeCarlo said.

Let us know what you think about the story; email: Gina Narcisi, news writer, and follow @GeeNarcisi on Twitter.

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