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Cloud Brokerage and the Future of the IT Utility

Abstract:  Cloud Brokerage is an emerging trend in the broader cloud computing industry.  Opinions differ widely about what it means to be a broker and the significance brokers will have on the future of the industry as a whole.    The reality is that the brokerage model signals the real potential to commoditize the compute utility, which will climax with the genesis of compute as a tradable commodity like soybeans, oil or minerals.  In this four part series we will take a deep dive into the concept of cloud brokerage and connect the dots between the key trends and market demands that will shape a force few in the industry see coming and fewer still are prepared to accept.

Part I:  The Analysts Weigh In

The National Institute of Standards and Technology (NIST) has established a working paper on the subject of cloud brokerage, signaling the importance of a movement that is taking shape inside the cloud computing industry as a whole.

The NIST working document describes the Cloud Brokerage success criteria as follows:

cloud-user wishes to carry out an action on cloud-provider-1 using a federated interface, with no direct knowledge of cloud-provider-1 commands or interfaces. A cloud-management-broker offers the cloud-user a federated interface to multiple cloud-providers through a human user interface, an application programming interface or both.  The cloud-user selects desired cloud-provider-1 resources, action and action parameters using the cloud-management-broker interface.  The cloud-management-broker collects and marshals the selected action and parameters from the cloud-user‘s selection and issues the desired command to cloud-provider-1 using cloud-provider-1 native interface.

The idea of cloud brokerage warranted enough noise to be covered in detail within the analyst community in 2011.   However, depending with whom you subscribe, cloud brokerage has very different meanings.  While there has been definite progress on the behalf of the analyst community, I think the potential for what this model could mean for the cloud computing market goes much deeper.

To be clear, I believe the role of what I am calling the “infrastructure broker” will be the most significant movement in the computing industry since the advent of virtualization and cloud.

Before I get into the immense complexities of that statement, let’s take a look a few perspectives from key industry analysts:


According to Gartner research expert Benoit Lheureux, the role of the Cloud Service Broker (CSB) is to “aggregate and add value to cloud services by providing a single point of entry to different types of cloud services.”   Gartner goes on to illustrate some key defining characteristics of a cloud broker.  According to Gartner, a CSB is a CSB if they genuinely perform:

  • Aggregation across VARS and IT Distributors
  • Integration with Systems Integrators
  • Customization for SI’s and Professional Services organizations

Gartner’s definition of Cloud Brokerage is by far the lightest among the analysts.  If you believe Lheureux, Cloud Brokerage is really just the modernization of the IT channel.

451 Group:

451 generally consider the category of CSB a part of broader market called cloud on-ramps.   In addition to providing some sort of provisioning technology, CSBs differ “in that they provide a value-added economic function, which matches workloads to the best execution venues.”

While I think 451 only provides cursory attention to cloud brokerage as a concept, the are at least more directionally correct in the sense that they see Brokerage providing a level of sophistication that is unique in the delivery of cloud services – namely the concept of ‘workload matching’.


I think Forrester has done the best job among the research outfits when it comes to taking a seriously deep look at the CSB market definition.   Forrester sees the CSBCloud Value Propositionsplaying a pivotal role in the future of the entire industry.   Analyst Stefan Reid’s taxonomy picture does a fantastic job of identifying the interaction of different players.

According to Forrester, “the simple broker model gains value only by comparing similar cloud provider options and using dynamic provisioning based on the actual spot prices of these resources.”  This sounds similar to 451 and Gartner in direction and tone.

But Forrester goes on to elaborate on what they see the as the evolution of the brokerage model.  “The full broker [model] goes far beyond [the simple broker].  It uses “cloud bursting” to provide IT users with higher value for a lower price.”  Cloud Bursting, Forrester explains, “is the dynamic relocation of workloads from private environments to cloud providers and vice versa.”   I’ll admit a slight sigh when I hear the cloud ‘bursting’ term (again), but I think Forrester has a great grasp on the technical role of the broker.

Gartner sees brokering as little more than modern distribution.   451 sees the concept as something they instinctually must cover but the details are hazy.   Forrester has obviously put the most thought into their analysis.  But the consistent underlying theme within these analysts is that brokerage insinuates a model whereby vendors inserting themselves and their technology between supplier and consumer to provide a layer of transactional value.

The debate and discussion goes much deeper than this and the potential for the cloud broker is much more profound.

In Part II of this post we will take a closer look at the role of the intermediary and who is likely to take up this position in the market.



Read the original blog entry...

More Stories By John Cowan

John Cowan is co-founder and CEO of 6fusion. John is credited as 6fusion's business model visionary, bridging concepts and services behind cloud computing to the IT Service channel. In 2008, he along with his 6fusion collaborators successfully launched the industry's first single unit of meausurement for x86 computing, known as the Workload Allocation Cube (WAC). John is a 12 year veteran of business and product development within the IT and Telecommunications sectors and a graduate of Queen's University at Kingston.

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