What is a cloud broker and why do we need one?

If we have to believe the predications cloud brokering will be hot in the next years. But what is a cloud brokering, why do we need it and who should become a broker?

Cloud computing is developing in a rapid pace. Each month new providers and services are launching. There is a huge variety in offerings making assessments on the best offering difficult. Services offered by Amazon differ from Microsoft Azure. And VMware based clouds have a totally different architecture than those hyperscale clouds.

Cloud consumers, especially enterprises, will need different services offered by many different cloud service providers. While application development (test/dev) can be executed in public cloud, organizations might not want to run production workloads in public clouds. Or they want to use as many locations  forcing to select datacenters from multiple providers.

Selection of cloud services and the consumption of it offers many challenges for the cloud consumer. Questions like :  what is the best cloud for my business, how to deal with multiple accounts and passwords, how to deal with multiple bills, contracts, support organizations and SLA’s.

Growth of cloud has challenges for IT-resellers and system integrators as well. Revenue of software and hardware sales for on-premises usage is dropping. The channel needs to think about converting their business to cloud. How can they add value to raw cloud based resources offered by cloud providers like Microsoft Azure and Amazon?

This is were  Cloud Services Brokerage (CSB) comes in. The cloud broker can have multiple roles, a shortterm role and a longterm role.

For the shortterm role, a cloud broker is very similar to a real estate agent. A cloud broker  is an independent middle-man who has knowledge of the various offerings of cloud providers. He knows the capabilities, pricing, SLA’s and is able to make the best match between the demand of consumer and capabilities of the cloud provider’s  offering.

The cloud broker can assist in negotiations on subjects like contract, pricing and SLA. When the cloud consumer  has decided on the offer, the consumer signs a contract with the cloud provider. The cloud broker is not involved anymore.

The business model for this type of broker/consultancy can be difficult to maintain for the long term, especially when the broker wants an image of being totally independant. This prevents partnering and getting income from services provided by cloud providers as this might have a negative effect on being independant.

As knowledge of cloud by cloud consumers increases over time, the importance of this type of cloud broker might decrease. In the real estate example we are seeing people selling and buying a house without the help of a real estate agent.

CloudCompare is an example of a middle-man broker.

The image below shows a 5-step plan used by CloudCompare to start using cloud.

For the longterm role, a cloud broker operates its own platform which aggregates cloud services and serves all offered cloud services into a single user portal and API. The main role of the broker is abstration. Abstration of how to purchase and consume resources from various cloud providers. One of the many advantages of using a broker instead of dealing with various cloud providers is standardization. The time for procurement is made much smaller when consuming via a broker.

In a way, a broker of cloud resources  is like what a grocery store is for perishable foods. In the old days consumers had to go to the butcher for fresh meat, to the bakkery for bread, get milk from a local dairy and go to the greengrocer for fruit and vegetables . This was not very efficient.  Nowadays consumers are getting used to order their food online and it is being delivered to their house.

Another analogy for cloud brokerage is energy. At the end of the 18th century, each factory in the US had its own power plant. That was not efficient and not agile. In 1882 Thomas Edision opened world’s first central power plant at Pearl Street in New York. Nowadays consumers can select from a variety of types of energy and suppliers. Energy is traded on stock exchanges.

Let us go back to cloud.

There are various sorts of cloud brokers in a service offering form. There are also three models :

  • on the supply (cloud provider) side. Here a broker (often a reseller/system integrator)  resells raw cloud infrastructure and adds value for the cloud consumer;
  • on the demand (cloud consumer) side. A broker aggregates various cloud services and presents those in single portal and API ;
  • as a market place between supply and demand (cloud exchange);

On the supply side various tools are available for white labeling/reselling and rebranding raw cloud resources. Air VM AirSembly for example is able to add value to resources offered by providers using VMware technology. Duncan Epping wrote a blogpost about AirSembly here.

CloudMGR is a product for reselling Amazon services.

On supporting the cloud consumer, various roles are developing.

  • Cloud Access Security Broker (CASB) which offers single sign-on to various SaaS offerings.This is the definition of Gartner.
  • Cloud Infrastruture as a Service Broker. This broker offers infrastructure resources (compute, storage) from various cloud providers to cloud consumers and presents those resources in a single portal and API.
  • Cloud Infrastructure Security Broker which focusess on making sure an enterprise security policy is applied to the cloud provider environment. An example of technology to enable this is Fortycloud.

These roles are called cloud aggregator. An aggregator is serving as a single point of contact to various cloud services. While this is a far more interesting business model than the short term, real estate alike cloud broker, the aggregator has a complex position. How is he going to deal with the ever changing API’s of cloud providers? How is he going to deal with responsiblity if a cloud provider failes to deliver the quality of service agreed in the SLA? What if performance is not at a constant, expected level? Who is going to be blamed for issues?

An example of a Cloud Access Security Broker service is KPN Grip. KPN, a  large telecom and IT-services provider, offers a platform which enables its customers single sign-on to various cloud services.

Another Dutch cloud aggragator is Greenclouds.  They aggregate idle IT capacity, regardless of the underlying technology, infrastructure and location and integrates this into a cloud. Making this cloud available to enterprise customers and IT service providers results  in a higher (energy) efficiency at a lower cost.

Cloud Management Platform

To be able to provide services as a cloud broker to cloud consumers, a cloud management platform is needed. There are various software solutions available right now. SCALR for example originates from Citrix and is now a separate company focusing on Open Source. Citrix used SCALR technology as a base for its commercial CloudPlatform.

Gravitant, an IBM company, offers cloudMatrix. A versatile cloud management platform with many features.

Cloud exchange

A step futher is the exchange of cloud capacity between provider and consumer.

The principle of a cloud exchange is quite the same as the stock market we know like The New York Stock Exchange. A stock exchange is an organization which facilitates buying and selling of participations of companies (shares). But also energy is traded on stock exchanges. So why not compute and storage capacity?

A cloud exchange  is a market place for (unused)  compute and storage capacity offered by cloud and hosting providers and consumed by cloud providers in need for (temporary) additional capacity, cloud consumers and cloud brokers.

Deutsche Börse Cloud Exchange  (DBCE) is the only platform worldwide on which IaaS resources can be compared, purchased, used and paid for on a standardized basis

One of the advantages of this platform is that the cloud consumer has a single contract. Deutsche Börse Cloud Exchange also provides a transparent overview of the capabilities of the cloud providers; what they can offer and what they cannot offer. The contractual relationship is always between the buyer and seller of cloud resources. However the terms and conditions of Deutsche Borse are applied. This is a standard, single contract which makes consuming resources for multiple cloud providers much easier.

Deutsche Börse saw that in the closed beta prices were adjusted by cloud providers about once a day based on the demand.

Names of cloud providers who are offering their resources to Deutsche Borse are Ultimum Technologies, Cloud & Heat, Innovo Cloud, ClouData and Darz. These are mainly German cloud providers. The well known hyperscale providers like Amazon, Google, Microsoft Azure are not likely to join such a cloud stock exchange.

This video shows the process of provisioning a virtual machine using the marketplace portal. You can use the marketplace yourself via this URL. 

What if?

While the role of a cloud broker at first sight seems very interesting, there are a couple of questions to be asked. Organizations want to prevent a vendor lock-in. Using IaaS is the best possible way to prevent vendor lock-in. But when a customer is dependant on a cloud broker for provisioning, billing, monitoring there is a sort of vendor lock-in with the broker! It is likely each broker will expose it’s own API and has it’s own contracts with cloud providers.

Many times you hear the saying “cloud will become an utility”. While a part of the complexity of IT is outsourced, there are still many challenges which will be there for a long time.


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