Software Resellers Invest in Cloud Service Broker Capabilities

Posted by skyhighnetworks on July 4th, 2014

According a recent industry report by Santa Clara, CA based Jamcracker, the business model in which organizations serve as a vendor-neutral third party cloud services broker has been found to gain significant momentum. Steve Crawford, Jamcracker’s Vice President of marketing stated, "Cloud service broker is essentially a means of distributing cloud services. So telcos and distributors and members of the channel are playing heavily in this space, but so are government agencies, like the General Services Administration, and some large enterprise IT organizations.” Furthermore, Crawford noted, "More and more the IT spend is going to cloud services, so the partners need to be in that game," Crawford said. "And the number of cloud-based services continues to grow exponentially year-over-year."

In the cloud service broker model, a company exists for the exact mission to make sure the cloud is more secure, and built as per the customer’s specifications, and desired integrations. Therefore, a broker exists to bring together different providers, in order to integrate a customer’s cloud services. Brokers provide value by making the cost lower, making the process easier and quicker to consume cloud services.

Jim Quan, analyst at JTR Partners noted that “Chief information officers and information technology teams are finding that businesses and enterprises are using more services than those offered by their company. Cloud service broker products solve most of the problems that manage cloud services” The growth of cloud computing will make broker an increasingly important part of the cloud ecosystem.  "Potentially every cloud service needs broker.  Potentially every cloud consumer will need broker. Do the math-- its multiplicative."

According to the customer’s standpoint, the opportunity to use an independent third party as a way to discover new services is a valuable. In addition, the ability to provide that service can further amplify relationships for the channel partner or other intermediary providing the service. Jamcracker's report also cites data from multiple market research companies predicting that cloud services broker, as a market, will grow to more than $100 billion in revenues by 2015, thereby becoming the single fastest-growing portion of the cloud sector.

"We have three or four different security competitors in the cloud service broker space, as well as a number of different email providers," said Crawford. According to Crawford, once cloud service brokers get up and running, most customers end up seeing month-to-month growth of 15%, which puts them in the top tier of startup growth. "It used to be that the cloud broker model was almost exclusive to the telcos, but over the last couple of years, we've seen it expand across many different segments”, stated Crawford.

Furthermore, Daryl Plummer, Chief Gartner Fellow states cloud service broker is "the single largest revenue growth opportunity in cloud computing, bar none." Plummer also asks, "We often talk about clouds, but how often do we talk about stitching it all together?" "There's really only one public cloud.... But cloud services certainly don't act like it.   They act like a bunch of different providers.  How do you make them all work together? “The solution to make these providers work together is cloud service broker.

Author :
Skyhigh Networks, the Cloud Security Services company, enables companies to embrace Cloud Security Services with appropriate levels of security, compliance, and governance while lowering overall risk and cost. With customers in financial services, healthcare, high technology, media, manufacturing, and legal verticals, the company was a finalist for the RSA Conference 2013 Most Innovative Company award and was recently named a "Cool Vendor" by Gartner, Inc. Headquartered in Cupertino, Calif., Skyhigh Networks is led by an experienced team and is venture-backed by Greylock Partners and Sequoia Capital. For more information, visit us at http://www.skyhighnetworks.com/cloud-university/what-is-cloud-service-broker/ or follow us on Twitter@skyhighnetworks.