As your customers move to the cloud, they will need your help to determine which options are right for them—and then put them all together.

By Lauren Gibbons Paul

Jack Ryan has his sights set on his company’s next big opportunity. Managing director for LTech, a reseller in Bridgewater, N.J., Ryan plans to build out cloud brokerage services, preferably sooner rather than later, to help his clients navigate the sea of cloud offerings.

“We’re looking at getting into the cloud brokerage business. We already help with cloud, but we do not currently offer multiple solutions that address the same needs,” says Ryan. LTech sells Google Apps, the Internet giant’s cloud-based business productivity suite, primarily to midmarket companies.

Ryan envisions LTech will one day become a trusted adviser capable of steering its clients toward the best cloud solution for their needs—whether Software as a Service (SaaS), Infrastructure as a Service (IaaS), or Platform as a Service (PaaS)—out of a field of many contenders. So, what is the stumbling block to doing just that? In short, to sell a number of different SaaS offerings, including Microsoft Office 365, Ryan believes he would need to add a dedicated new organization, and that’s expensive.

“In order to sell Office 365, we would have to build completely separate divisions. From the bottom up, we would have to have separate teams. Our deployment and sales engineers would fall into one camp or the other,” says Ryan. The fact that he has not yet built an Office 365 practice is a function of timing and limited resources. LTech would also need to proceed carefully, adds Ryan, to safeguard its relationship with Google.  

The decidedly traditional function of being a broker just went 21st century. Just as consumers have insurance brokers to help them sort through the available plans, companies in growing numbers will rely on cloud service brokers to navigate, integrate, and customize cloud services to meet their specific needs. According to analyst firm Gartner Inc., at least 20 percent of all cloud services will be handled via brokers by 2015, up from less than 5 percent today. As the IT function migrates to the cloud in earnest, opportunities abound for companies that can establish themselves as trusted intermediaries and consultants for cloud services.  

MAJOR OPPORTUNITY

According to Gartner Managing Vice President Daryl Plummer, who says he coined the term “cloud broker” in 2009, now is a good time to jump on the cloud service brokerage bandwagon because its revenue potential is far greater than cloud services. “Cloud service brokerage is the single biggest revenue-generating opportunity in cloud, bar none,” says Plummer. In fact, he says the size of the cloud brokerage services market is two orders of magnitude greater than the market for cloud itself.

By way of comparison, Gartner estimates that the worldwide public cloud IaaS market (including hosting, storage, servers, and associated services) will reach $4.7 billion this year and is estimated to grow by an impressive 47 percent over the next five years. “But that will saturate quickly,” says Plummer.

Meanwhile, the other public cloud markets are much smaller than IaaS. PaaS, sometimes called “middleware in the cloud,” will reach $2.1 billion this year worldwide, according to Gartner, growing at an estimated 7 percent over the next five years. “That’s a limited opportunity,” says Plummer.

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