I recently wrote a prediction stating that “Cloud Services Brokerage (CSB) is the single largest revenue growth opportunity in Cloud Computing”. Of course, not everyone agrees with that. So, I had to go out an try to provide more evidence. And to do that, I finished rewriting the definition of cloud services brokerage. Benoit Lheruex and I have been working steadily on this and are seeing notables such as Accenture, Deloitte, and IBM all begin to plan for a significant brokerage future alonside upstarts like Appirio, Boomi, and even stalwarts like GXS. See Ben’s blog post on CSB here.
So, in the definitional piece called “Defining Cloud Services Brokerage: Taking Intermediation to the Next Level”, we said (free peek):
Since CSB is not a technology. It is necessary to describe it in terms of a business model, providers, deliverables, functions and enablers:
- CSB business model: A model where a business acts on behalf of consumers of one or more cloud services to intermediate and add value to the service being consumed. Providers of cloud services can benefit as well through establishment of an ecosystem of partners, such as brokerages, who enhance the provider’s service and draw customers to it.
- CSB providers: Specific companies or other legal entities that offer CSB.
- CSB deliverables and functions: Business and technical value-added capabilities delivered by a CSB provider.
- CSB enablers and enabling technology: Various IT services, software or hardware assets used to deliver CSB.
But that wasn’t enough. We had to go on and provide a logical reference model (See “A Logical Reference Model for Cloud Services Brokerage“, by me – sorry about the pay wall) and some basis for the judgement that CSB is going to be big Big BIG! So, we used simple logic. We looked at the companies entering the CSB-related markets and companies that were already there. Now, from here, you can do the math.
Use whomever’s market numbers you want. Add up the custom development markets for SIs, SI application and integration projects, B2B integration markets, Process outsourcing (BPO) markets, API governance markets, context brokerage markets, security brokerage markets, value-added reseller markets, internet performance acceleration/content delivery markets, backup and recovery markets and…well, I could keep going but you get the point – we’re getting into the range where there is a “tr-” in front of the “-illion”. Now, let’s go conservative and attribute just 10% (that’s only one customer in 10 doing cloud stuff) of those market totals to companies in those markets doing what they do – but doing it for cloud services. And, if the number you come out with isn’t BIG, then I’ll ask you to count again.
Cloud services brokerage is not one market. It is a composition of parts of markets that are really significant in size. I’m not saying that all the revenue in those (and more) markets will be CSB revenue. I am saying that a non-trivial part will be. If cloud computing will be big, brokerage will flow right along with it. And just like the accessories markets for your iPod, Android phone, PC, and Honda accord, you will find the value-added intermediaries (brokerages) may command the lions share of the spend happening in cloud computing.
Some people feel intermediaries needlessly complicate things in the cloud. I feel the opposite. And, opportunity awaits.
A lot more is coming on this, so join the dialog!
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