What is a cloud broker?


Cloud computing continues to enjoy popularity among enterprises. Earlier this year, for the seventh annual State of the Cloud Survey which interviews almost a thousand IT professionals on their use of cloud infrastructure, the latest cloud computing trends identified are that multi-cloud is a preferred strategy, and organizations are using an average of just under five clouds. They also found that a “significant wasted cloud spend makes optimizing costs the top initiative.”  

With a myriad of options for public cloud providers, and multiple tiers of plans within each provider, in addition to hybrid cloud and private cloud options in the mix, it can turn into a minotaur’s maze to try and find the perfect mix of cloud providers for an organization. With so many choices, it can easily turn into a case of ‘analysis paralysis’ for an organization when it comes time to choose a cloud provider. Additionally, the cloud providers do change their plan offerings, adding to the confusion as this becomes a landscape of shifting sand.

What does a cloud broker do?

As cloud computing is so essential to these enterprises, some turn to an outside consultant for some expertise, known as a cloud broker. Just like in real estate, your agent provides the needed expertise as they do this day in and day out, the cloud broker can help to navigate this rocky landscape. The cloud broker is a third-party individual that is a middleman between the enterprise that wishes to purchase the cloud computing service, and the cloud computing vendor that is selling the service. The services of a cloud broker are quite popular, as according to a 2015 cloud services report, “The global Cloud Service Brokerage Market is expected to grow from $5.24 Billion in 2015 to $19.16 Billion by 2020, at a Compound Annual Growth Rate (CAGR) of 29.6% from 2015 to 2020.”

Broker on telephone

Just like other brokers, such as a stock broker, real estate broker or automobile broker, the cloud broker is an expert on current offerings on cloud computing. In some instances, they serve as an advisor, to give assistance to an enterprise, able to save valuable research time. The cloud broker first takes the time to understand the unique needs of the organization, including the data requirements, workloads and budget, and then can help to choose the ideal cloud computing vendors to suit those needs. At the conclusion of this process, the cloud broker provides the organization with a short list of vendors that can provide their needs, and the organization goes on to directly contact the vendors, and negotiate a service contract.

Using a cloud broker to negotiate

While in some cases, the cloud broker is utilized for this level of expertise, some organizations also use them for the negotiation process. After all, cloud vendors do not provide transparent pricing on the websites, and each organization’s exact cloud computing requirements tend to be unique. Also, an active cloud broker will have a better ‘feel for the market,’ and what ‘the traffic will bear,’ for a cloud offering if they do this all the time, not to mention their ongoing relationships with the cloud vendors. Compare this to an an enterprise’s finance officer that only negotiates a cloud computing contract once every couple of years, or even worse, has never done this at all.  

For those organizations with less experience negotiating a cloud computing contract, they should consider employing the negotiating services of a cloud broker. With the rights to negotiate a cloud computing contract, the cloud broker can distribute the organization’s cloud computing needs among multiple cloud computing vendors, taking advantage of the best services and get a favorable deal at each. This approach is known as multicloud, and while it has several advantages, it can be complicated to configure especially with the initial setup. Cloud brokers that work in the area of multicloud sometimes go by the term cloud aggregator, and it can be configured by the cloud broker to a user interface that simplifies the multiple cloud providers to have it appear as just a single one, which is a concept that is known as meta-cloud

Letting the cloud broker negotiate the contracts is often felt to be less risky to the enterprise, as the cloud broker can ‘right size’ the amount of cloud computing for the need, and deliver it at an acceptable price. The concern does come with how the cloud broker gets paid, how independent they are if they have ongoing relationships with a limited number of cloud computing vendors, and if they are paid on a commission basis from the vendors. However, cloud brokers often bring more to the table in the form of additional services offered, than just being a simple reseller of a cloud computing vendor’s service.

Cloud computing flow chart

Additional roles of a cloud broker

For example, another role of cloud brokering is that of the cloud integrator. This additional role of the cloud broker is to combine the public and private cloud environments of the organization, via cloud orchestration, and to automate workflows across these diverse environments. They can also use their cloud expertise to assist with the migration of data between the public and private clouds.

Yet another role of the cloud broker is as the cloud customizer, which also goes by the term white label cloud service. Here, the cloud broker again goes beyond the middleman role, and uses their experience with cloud computing to customize an existing cloud service, to the special needs of the business. This can be done to increase the value of the cloud computing application, to better integrate it, and to have it compliant with regulations. A related term is that of the cloud enabler, which can assist with managing the data lifecycle, including moving the organization’s data to the cloud, as well as the encryption of data.

With the increasing prominence of cloud computing to an enterprise, along with the nuanced complexities that have developed, it makes quite a bit of sense to look into the services of this newly created profession, known as the cloud broker. Even though it is relatively new on the scene, it already has developed multiple subspecialties confirming what a specific niche this area of computing has already become.  



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