The cloud models of the future

Matt Davies, director, Cordys, discusses the different approaches to cloud broking we will see develop as service providers look to new revenue streams.

The cloud is often touted as the answer to all our problems. It offers countless possibilities, from increased agility and reduced costs for enterprises, to a revenue lifeline for service providers as they take their first steps to becoming a cloud broker. The cloud broker model can give service providers the chance to avoid commoditisation by repackaging their own offering together with cloud services and selling these on to customers as value added services.

But cloud brokers beware, there’s a risk of being a jack of all trades and master of none. It’s crucial to ensure that a cloud offering is designed to meet the needs of a specific market and enable differentiation from other providers. For example, enterprises and small/medium sized businesses (SMBs) will hardly subscribe to all cloud services from a single provider. So which approach is best for which target market?

Working with SMBs
For telcos with access to a large number of customers in the SMB space, the Software-as-a-Service (SaaS) broker is the best way to go. This allows telcos to leverage their broad customer access together with communication capabilities and sell SaaS applications to SMBs in addition to their carrier portfolio. SMBs will not only expect consolidated provisioning and billing but also an aggregation of services and federation of data across multiple SaaS applications provided by the broker. For example CloudItalia is working with Cordys to offer a core set of services that are vertically focussed and aimed specifically at the SMB customer segment. This approach is all about providing pre-packaged services that, as much as possible, are a `no brainer’ for SMBs to work with. MashApp tools are critical here. They provide the capability to build services by creating mashups of the business applications SMBs are most likely to require, such as Saleforce.com. Together with orchestration tools this allows users to build the exact services they require. Because the cloud service provision component is based on the company’s existing telecoms business with its own network, this gives Cloud Italia’s customers particular benefits.
Forrester’s Forrsights survey data shows that by the end 2012, on average nine different SaaS applications will be used at the same time in a single business. This will increase to 13 by the year 2013. This requires a higher automation of billing and integration among all SaaS applications used, including a flexible subscription approach for individual employees. All of these challenges are potential value propositions for future SaaS brokers. Further to this, an organisation will look to their service provider for the ability to orchestrate and run efficient business processes across this portfolio of SaaS, on-premise systems and people. This again is an opportunity for the service provider to offer differentiated capability and demonstrate real value and understanding of their industry vertical enterprise customers.

An enterprising solution
Enterprises seriously moving to cloud infrastructure require a mixture of multiple cloud infrastructure services, very likely from multiple providers. Systems integrators (SIs) and dedicated cloud infrastructure providers will get the most out of becoming Infrastructure-as-a-Service (IaaS) brokers. Providing dynamic sourcing across public, virtual private, and private clouds, this broker model leverages temporary spare capacity on-premise and combines it with spot price offerings of virtual private or public cloud providers. Cloud infrastructure offerings vary by reliability, price, local presence of data centres, legal compliance, performance, and many other characteristics. SIs can retain or establish a long-lasting customer relationship with these enterprise buyers by offering the full portfolio of their own cloud services and reselling public cloud IaaS from others. Infrastructure broker services remove the complexity for the end customer and add a unique value by making the multi-provider portfolio consumable.

According to Forrester’s Forrsights Hardware Survey, 9% of all enterprises today use a hybrid cloud infrastructure, mixing a private cloud with an external cloud provider. This number is expected to increase to 26% by 2015, and Forrsights data indicates that half of that group will be using sophisticated cloud management such as policy-driven provisioning. This group will drive the adoption of infrastructure broker services in the future.
Pure clouds
Taking a different approach from telcos and SIs, pure cloud providers target a global audience of all company sizes via standardised offerings. The unified self-service and app-store capabilities are key to underpinning their positions as pure cloud providers. Dynamic sourcing concepts are embraced more aggressively than in any other cloud provider class. Forrester argues that the pure cloud providers really focus on horizontal, standardized scale-out models. Both the SIs and the dedicated cloud providers mention service aggregation and integration as key proponents. However, SIs delivered it on a project basis while the dedicated cloud providers are buying third-party adapters and preconfigured service aggregation technology.

Common ground
There are some features that customers expect from any cloud broker, whether telco, SI or cloud provider. The first of these is a service app store and the underlying service definition, where the traditional IT service catalogues merge with the simplicity of consumer app stores. In addition, workload management and dynamic sourcing, where traditional provisioning merges with modern cloud-bursting approaches are seen as a key element of a cloud broker offering. Finally, elasticity management, where metering resource consumption and monitoring business service levels merge, is expected from all cloud brokers.

How to differentiate
Looking ahead, service aggregation will become an important differentiator for cloud brokers, no matter if SMBs, large enterprises or both have been targeted. While many cloud providers still have a different understanding of service aggregation, according to Forrester the industry is heading towards hybrid business scenarios and new business networks enabled by cloud computing. For example, technical infrastructure could be aggregated into a holistic view on performance and capacity across private, virtual private, and public cloud resources and a compatible set of management APIs across these multiple clouds. Similarly, aggregated business services will become not only the federation of employee, customer, and supplier identities, but also the seamless flow of transaction data, for example, from a CRM systems into a financial accounting system.

A unified future
It is even possible that a single company might deliver multiple cloud broker models, as a ‘unified cloud broker.’ A sophisticated business process-driven provisioning framework, which supports the dynamic sourcing of both infrastructure and SaaS applications, would obviously provide a huge synergy for providers looking forward to a unified cloud broker. Leading technology vendors and their ecosystem of partners are getting ready to deliver this spectrum.

However, it takes a cloud provider at least a year to merge discrete broker services into a unified cloud broker business model and technology stack. This is one reason that we are yet to see any unified cloud broker offerings on the market. But watch this space, it won’t be long...

Global investment leader selects AWS as a preferred cloud provider to gain business insights, improve workplace safety, and automate hydroelectric, wind, and solar operations.
Purpose-built security data lake helps organizations aggregate, manage, and analyze log and event data to enable faster threat detection, investigation, and incident response.
New data management service helps customers catalog, discover, share, and govern data across their organization.
Leading geospatial intelligence company relies on AWS infrastructure, high performance computing, and analytics to give customers timely, actionable insights to expand their geospatial data applications.
World’s leading cloud provider announces new replenishment projects in India, the United Kingdom, and the United States to bring much needed clean water to communities around the world.
Focus on digital transformation, persistent skills shortages and new risks around cloud migration resulting in CISOs consolidating siloed, disparate and duplicate systems.
Delivers accelerated performance, operational savings and improved efficiency.
Rackspace Technology® says that, despite the rise of inflationary pressures and a global economic slowdown, few organizations are scaling back on IT investment and most are committed to spending more, according to a new survey Managing IT in Challenging Economic Times, a survey of 1,420 IT decision-makers across manufacturing, retail, hospitality/travel, healthcare/pharma/biomedical, government and financial services sectors in the Americas, Europe, Asia, Australia, and the Middle East.