Opportunities in Cloud Service Brokerage Market

Cloud service broker sits above cloud providers, add value reduce complexities and risks for cloud computing customers. There are significant opportunities for players in cloud brokerage space today. Gartner expects the revenue from cloud services brokerage to increase from just USD 50 mn in 2010 to USD 5 bn in 2014, and will be fastest growing cloud service during this period. Anticipating its rise in future large firms have acquired small players active in this space to strengthen their portfolio offerings. IBM acquired Cast Iron in May 2010 while another large player Dell acquired Boomi in November 2010.

A cloud service brokerage player delivers the following services to cloud users:

  1. Selection: help in selection, price finalization, check if service is compliant with local laws
  2. Integration: of various services across different vendors with cloud user
  3. Customization: of services based on the business process and business objectives
  4. Aggregation and arbitrage: ensure that all cloud services are available under one roof and enable switching
  5. Service delivery: help in SLAs, technical issues, billing and other problems
  6. Reduce risk: by ensuring strict authorization and access. Security and compliance
  7. Enrichment: Value adds

Existing players have potential to be part of the cloud service brokerage market

On a broad basis the following players have high probability of joining the market as they have handling similar tasks:

  1. System integrators such as IBM, Accenture, etc.
  2. Telecom carriers: such as AT&T, etc.
  3. Outsourcing companies / BPO: As the work is similar in terms of outsourcing non-core activities
  4. Existing large cloud players

Some key points regarding opportunities in cloud service brokerage market:

  1. Low end services such as aggregation will soon be commoditized and will not command high pricing. Thus players will have to constantly innovate and provide high end services such as integration, customization, etc.
  2. While large players will cater to multiple verticals, small players can create their niche by concentrating on certain verticals e.g. pharma, financial services, etc. This is likely to happen as industries have specialized needs and will have specific cloud services to address them.

Some of the prominent firms in cloud service brokerage space are:

  1. Boomi
  2. Jamcracker
  3. Castiron
  4. SnapLogic
  5. Appirio