Growing Cloud Service Commoditization, Migration Beyond Single Cloud into Multi-Cloud Environments & the Need for Well-Crafted Strategies to Manage the Complexity of Multiple Clouds Drive the Significance of Cloud Services Brokerage

The global market for Cloud Services Brokerage (CSB) is forecast to reach US$16.4 billion by 2024, driven by growing cloud service commoditization; migration beyond single cloud into multi-cloud environments and the ensuing need for well-crafted management of multiple clouds.  

With rapid proliferation of cloud computing, basic cloud services are becoming increasingly commoditized with every service provider offering similar services with very little scope for differentiation. Standardization of service delivery models, service quality, and pricing mechanisms have played key roles in the commoditization of cloud services. Also, commoditization of cloud services comprising SaaS, PaaS and IaaS is seen as inevitable and supporting this school of thought is the “Bezos’ Law” which like the Moore’s Law in electronics/computing states that price of each unit of cloud computing power will reduce by 50% every three years. Explosion of cloud service providers in the market are further aggravating pricing wars as a result of the glut of services in the market. In the midst of blurring heterogeneity in cloud services, the concept of brokers is gaining prominence. Cloud brokers are intermediaries who use software, appliances, platforms, and technology suites to enhance the basic commoditized service offered by cloud service providers. Right from managing access to services, customization of services, improving security features of services to aggregating and integrating services of multiple cloud service providers. Demand for cloud services brokerage will grow supported by the ability of these brokers to add value to existing commoditized cloud services and thereby deliver new service capabilities built and delivered on top of the former. Value additions made by cloud brokers include altering or adding new capabilities, changing, improving and enhancing service functions, addition of analytics to basic cloud services, aggregating two or more cloud services from different providers and integrating them so as to enable independent services to work together in a combined offering etc.

Another key driver of growth is the rise of multi-cloud strategy. Defined as the use of multiple cloud services offered by different providers, multi-clouds offer wide ranging benefits which are hard to ignore in an era where operational cost reduction and operational responsiveness rank supreme. These benefits include higher cost savings as it allows companies to competitive pricing offered by different vendors in different regions/locations; performance optimization; eliminates the risk of vendor lock-in; flexibility to run workloads in the most appropriate environment; higher data security and safeguard against data loss as redundancy is a key benefit of multi-cloud; and ability to cost-effectively conform to data residency regulations that require enterprise data to physically reside in certain locations. For geographically diversified multinational companies, multi-clouds allow for data backup in the cloud of service providers in a given region and thereby cost-effectively conform to data residency regulations.

The need to streamline multiple cloud services will help drive demand for governance and brokering cloud services. With the number and types of clouds increasing, there is a growing need in enterprises for a cloud team for centralized cloud governance involving cost management, policy establishment, cloud brokering, and managing apps movement to the cloud, among others. In addition to managing seamless delivery of services from multiple portals, multi-cloud ecosystem also requires close monitoring for ensuring consistent performance, security, and control. Cloud service brokers in this regard provide aggregation, integration, and customization of clouds in a manner that helps address challenges of a multi-cloud environment. Benefits of engaging CSBs include elimination of “shadow IT” since operational demands and needs of employees are perfectly aligned with cloud resources; greater security of company data as it moves back and forth across multiple private and public clouds; effective negotiation of SLAs with cloud service vendors; effective eliminate of redundancies, optimized resource utilization, and superior management of different clouds and their differing capabilities, processes, costs, and performance levels.

As stated by the new market research report on Cloud Services Brokerage (CSB), the United States represents the largest market worldwide flaunting the world’s most sophisticated cloud infrastructure. Asia-Pacific ranks as the fastest growing market with a CAGR of 23% over the analysis period led by the development of the enterprise sector; growing cloud readiness of Asian economies; increased reliance of emerging Asian economies on digitalization, the Internet and transformative enterprise technologies and adoption as multiple clouds and serverless computing as only way forward for efficient, rapid and cost-effective deployment of IT in a modern enterprise.         

Major players in the market include Accenture Plc, Appirio, BMC Software, Inc., Capgemini S.A, CenturyLink, Cisco, Cloudability Inc., CloudMore, ComputeNext, Dell Boomi, DoubleHorn, LLC, Forcepoint, IBM, Jamcracker, Inc., Liaison Technologies, Inc., Neostratus, OpenText Corp, RightScale, Inc., Spotinst and Veeam® Software. among others. 

The research report titled “Cloud Services Brokerage (CSB) - Market Analysis, Trends, and Forecasts” announced by Global Industry Analysts Inc., provides a comprehensive review of market trends, issues, drivers, mergers, acquisitions and other strategic industry activities of global companies.  The report provides market estimates and projections for all major geographic markets such as the U.S., Canada, Japan, Europe, Asia-Pacific (China, South Korea, and Rest of Asia-Pacific), and Rest of World. Product segments analyzed in the report include Cloud Brokerage Services and Cloud Brokerage Enablement Solutions.

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