The seminal revolution of this decade is cloud computing. With its promise of revolutionizing the economics and functionality of IT, the cloud has attracted a lot of attention and generated its share of complications. Companies find themselves unable to navigate the technology, unable to secure services in all of the areas they need covered, and are faced with inconsistent contracts and service-level agreements (SLAs). Cloud brokerage...
can address these problems. To be sure it will, start by looking at the company's goals versus broker missions, identify the value-add and balance it against the risks of introducing a third party.
One reason people come to a cloud broker is for migration and technical support. Small and medium-sized businesses (SMBs) in particular are vulnerable to the complexity of the cloud. Sometimes, the very reasons the cloud might be attractive -- difficulties in sustaining in-house IT support -- create an adoption barrier. A broker can provide the additional services and support needed for a smooth transition.
For this class of cloud broker prospect, think of the broker as an integrator. Focus on the quality and utility of the additional support. Can the broker provide everything needed to bootstrap the cloud migration? Is there a progression from on-boarding to sustaining cloud applications as the company becomes more cloud-adept?
Cloud buyers who want brokers to fill gaps in their skill sets should always be thinking about weaning off the broker. Companies can expect to become more cloud-literate over time. If the cloud does become mainstream, cloud skills will be readily available in SMB labor pools. Cloud providers also need to move down-market into less-skilled buyer segments. This will refine their own offerings to lower the barriers to commitment. Cultivate a broker relationship that teaches staff, and that doesn't depend on proprietary tools and practices that could lock the company in.
Another reason companies look to cloud brokerage is the lack of a cloud provider that covers the full service area. Hybridizing cloud services is a problem few cloud users face, and those who do likely have issues with different contract terms and SLAs. They probably also have technical problems, as well as issues with integrating the resources and components. Where SLAs and contracts are the primary issue, look at the SLA management and reporting tools the broker offers. If they're weak, there won't be enough information to drive SLA monitoring and problem resolution.
From the technology side, integration and deployment issues should be the focus of a cloud broker assessment, particularly for companies with geographic scope problems. Multiple cloud providers demand efficient interconnection and integration. This is either going to depend on effective use of deployment and management tools, or a lot of one-off professional services. Cloud brokers with very strong Web service-based deployment, integration and management tools will likely do you the most good at the best price.
Cloud broker tools and practices are a common theme in addressing buyer issues that would justify cloud brokerage, and so they should be a focus of a buyer's assessment. The cloud broker should be able to adapt their tools and practices to reflect new cloud provider partners or the loss of old ones. The broker should also account for the evolution of cloud management features, as well as increased cloud buyer application complexity. A good broker will have specific DevOps tools. They will have recommendations on application lifecycle management in their cloud, and a grasp of industry trends that are demonstrated on their website and in discussions with technical support people. The most successful cloud brokerage engagements are those that focus on the tools and practices of the broker, and those that teach the tools and practices to cloud buyers so they can go it alone in the future.
The future of cloud brokerage is unknown. First and foremost, cloud profit margins are shrinking and will continue to do so. That means there is less spread between what a cloud buyer is willing to pay and how the real infrastructure-based cloud providers will price their offerings. In every maturing market, middlemen have been marginalized by these forces. Without them, online retail would have little benefit to the consumer. Over time, cloud brokers with minimal value-add are likely to be forced either to be infrastructure-based cloud providers or to leave the market.
Any middleman poses a risk because there is no assurance that the relationship between the cloud buyer and the actual infrastructure provider will be sustainable if the broker fails. At the least, buyers would have to contend with maintaining their cloud services without the tools and practices the broker contributed. It's also possible that the broker may not be paying cloud providers for services on time.
For all these reasons and more, when contracting for cloud brokerage, it's important to review the way the contract protects the buyer against default. Research what rights the buyer has to audit payments made on their behalf to the broker's cloud providers. Question whether the cloud buyer has specific redress rights against the broker, the underlying provider of cloud services, or both.
If cloud computing succeeds on a large scale, cloud brokerage will be far less relevant. It's even possible the whole niche will disappear. Remember that when picking a broker; the strong financial players with real value-add will be those with the best chance of being a long-term partner in your cloud migration.
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Tom Nolle asks:
Do you think cloud brokerage will lose relevance over time?
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