I had an interesting discussion the other day with a person who said “I don’t believe in cloud brokers.” I thought about the opening gambit for a bit wondering if in the end Cloud Brokers like the Easter Bunny and Santa Clause were open for “interpretation.”
Anyone can argue with a concept. But Cloud Brokers aren’t real? They are so “last century?” It was an interesting conversation. Cloud Broker is a term that many organizations mis-use or twist/bend to fit their product and their definition. I am a broker they loudly proclaim and then they show their product proudly labeled “Cloud Broker.” This also comes up when you play the “IT is a Commodity” game either at home or work.
Or as some pundits now proclaim IT as a Service you can consume. The reality of IT is that it has been a commodity for many years, the large outsourcing vendors have made a living taking IT services and selling them back to the business. Commodity IT services simply represent in all cases the expertise your organization doesn’t have today, that you won’t need next week. IT Services that you will need this afternoon for two hours and maybe an hour next week. You don’t want to hire someone for that 10 hour period so instead like cloud you leverage the existing Utility model for consulting. You go to XYZ Company and you rent a consultant.
The same is true in Cloud computing. What people miss is that the nature of those two hour consulting gigs is the reality of the relationship. You don’t go create a new relationship every time you want to bring on a consultant. You leverage the existing consulting partnerships you have. The same is true of the broker. Rather than having 20 distinct connections with 20 distinct Cloud Service Providers that you manage and maintain, you have one with the broker.
Now the broker is so much more than a relationship site. But in the long run it makes solid business sense to have that one place you go for cloud services. For the first part the more customer’s the broker’s collect the more bargaining power they have. All Cloud Service Providers have tiered or discounted services models. If you have a lot of customers you most likely will be able to pass along the greatest discount.
Saving 10 to 15% overall on your cloud costs would certainly justify the 1-3% fee the broker would apply to providing that service. Plus the broker could off you so much more. Shared Security services would allow the broker to notify you of any and all attacks in the system regardless of which customer was being attacked. You get more information about attacks and the broker can provide additional security services that will ensure you don’t fall prey to the attack.
Brokers can even offer a simple transaction fee model. For most customer’s you will want the flat rate from your broker, but some smaller or less active organizations could consider a 1% per transaction fee from the broker to cover the cost and services the broker provides.
I think the more interesting statement now isn’t “Cloud Brokers aren’t real,” instead it is more along the lines of consider “who is saying brokers aren’t real.” In the long run smart cloud service providers will line up to sign up with a broker. It reduces their cost of sales and gives them a consistent and larger pool of customers. But in the short run most of them don’t like the broker model. They equate it to the 1990’s when we would book travel through a broker. They don’t like the concept of IT as a Commodity today. I suspect that will change.
My answer to the question “I don’t believe in cloud brokers” was in the end what you see above and ending with the simple statement “it was long believed that human beings were not physically capable of going faster than 35 miles per hour.”
By Scott Anderson
Scott Andersen is the managing partner and Chief Technology Officer of Creative Technology & Innovation. During his 25+ years in the technology industry Scott has followed many technology trends down the rabbit hole. From early adopter to last person selecting a technology Scott has been on all sides. Today he loves spending time on his boat, with his family and backing many Kickstarter and Indiegogo projects.