Report: Cloud Service Brokerage Gaining Momentum


The business model wherein organizations act as vendor-neutral third-party cloud services brokerages seems to be gaining momentum, according to a recent report by Jamcracker, a Santa Clara, Calif.-based company that positions itself as a "cloud brokerage enabler."

"Cloud service brokerage is essentially a means of distributing cloud services," said Steve Crawford, Jamcracker's vice president of marketing. "So telcos and distributors and members of the channel are playing heavily in this space, but so are government agencies, like the General Services Administration, and some large enterprise IT organizations."

"More and more the IT spend is going to cloud services, so the partners need to be in that game," Crawford said. "And the number of cloud-based services continues to grow exponentially year-over-year."

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Crawford said that from the standpoint of the consumer, the opportunity to leverage an independent third party to provide a single avenue of discovering different services is a very powerful value proposition. Furthermore, the ability to deliver that value proposition can strengthen relationships for the channel partner or other intermediary providing the service. In addition, the move typically optimizes provisioning and is accompanied by single sign-on, which eliminates the need for users to try to track large numbers of usernames and passwords.

"You can enforce password policy more easily," he said. "And you can also generate an auditable record of which users are accessing which services."

Jamcracker's report also cites data from multiple market research companies predicting that cloud services brokerage, as a market, will grow to more than $100 billion in revenues by 2015, thereby becoming the single fastest-growing portion of the cloud sector. In addition, the company claims that cloud brokerage will extend well beyond a pure cloud play, and it will increasingly include similar services architectures such as software-as-a-service and hybrid plays.

The vast majority of brokers will carry competing products from a number of different providers.

"We have three or four different security competitors, as well as a number of different email providers," said Crawford. "It's all about customer choice and the ability to provide counsel to those customers about what will meet their needs and give them the most performance for the dollar."

According to Crawford, once cloud brokerages get up and running, most see month-to-month revenue growth in excess of 15 percent. Messaging, collaboration and security are recognized in the report as three hotspots.

"It used to be that the cloud brokerage model was almost exclusive to the telcos," said Crawford. "But over the last couple of years, we've seen it expand across many different segments, including IT distributors in various types of partners who want to get in the game."

Jamcracker initially started out as an ASP aggregator in the early days when the application service provider model was an important industry trend. But as time went on, the move toward cloud-based services became an obvious imperative, according to the Crawford.

To that end, the Jamcracker Services Delivery Network (JSDN) has emerged as the company's platform for the delivery of customized cloud services. Functioning as a SaaS gateway, it provides support for a variety of functions, including billing, administration, catalog management and authentication.

PUBLISHED APRIL 1, 2013