Will VARs Become Cloud Services Brokerages (CSBs)?
Chatter about cloud services brokerages (CSBs) continues to grow louder. What services do they offer? And will current-day VARs begin to resemble next-generation CSBs? The VAR Guy has some strong opinions on this topic. Here they are.
First, let’s define the role of a cloud services brokerage. To fit the definition, you have to offer at least one of three capabilities, notes Gartner:
- Cloud Service Intermediation: An intermediation broker provides value added services on top of existing cloud platforms, such as identity or access management capabilities.
- Aggregation: An aggregation broker provides the “glue” to bring together multiple services and ensure the interoperability and security of data between systems.
- Cloud Service Arbitrage: A cloud service arbitrage provides flexibility and “opportunistic choices” by offering multiple similar services to select from.
Gartner VP Tiffani Bova speaks about the CSB topic quite frequently. The trend is real. Think of it this way: When a customer leverages three or more cloud services — like CRM, hosted email and storage — it starts to get difficult to manage the vendor relationships, logins, security, billng, etc.
A CSB handles all those issues, and more. And a growing number of companies now classify themselves as CBS — just check this growing list at The VAR Guy’s sister site, Talkin’ Cloud: http://www.TalkinCloud.com/CSB
Dialing a Distributor
For VARs, a potential fast way into this market likely involves working with a distributor. For instance, Ingram Micro Cloud is an aggregator service that allows VARs to source a range of storage, security, mobile and application services for end-customers. And it’s a safe bet the CSB trend will earn the spotlight at Tech Data‘s upcoming TDCloud conference (Aug. 7-9, Tampa).
So how many VARs will become CSBs? The actual figure is elusive. But think of it this way: Most VARs will offer some sort of hosted email (Google Apps, Intermedia, Microsoft Exchange, etc.), backup (Axcient, Datto, Intronis, etc.), extended suites (Office 465, OS33, Emecloud, independenceIT) and more. Tying all that together will require some brokerage expertise.
Are you up to the task?
Mr VAR Guy/JP,
Customers are
Mr VAR Guy/JP,
Customers are consuming cloud (that’s a freight train going down the tracks) and VARs will need to find a place to play to remain relevant. A VAR becoming a CSB (I say Cloud Solutions Provider) is inevitable, but like tech vendors are transforming their business models, the VAR must also. 1. New business financial model to recurring revenue without falling into a chasm 2. build/bundle cloud solutions suites with your own differentiated high margin services 3. start marketing and selling business-outcome cloud solutions to non-IT.
best,
Todd: Agreed on most fronts.
Todd: Agreed on most fronts. The one area I would slightly disagree is the definition of CSB (see it here) vs. a cloud solutions provider. Generally speaking I think a CSB is a bit more sophisticated.
-jp
Another company to consider
Another company to consider alongside the distributors mentioned in the article is Arrow, more details here: http://ecs.arrow.com/services/cloud.html
Marcus: Good point on Arrow.
Marcus: Good point on Arrow. Sorry about the initial omission.
-jp
I think it’s a definite
I think it’s a definite trend. We’re seeing a lot of VARs looking for a platform to help them sell cloud services. What they’re doing is white labeling platforms which integrate/aggregate services. We’ve been operating in this space for some time and see the VAR as a great channel, however it remains to be seen whether adoption will trend more towards pre-integrated bundles or systems integration and customization. More info on our models and thoughts here: http://www.computenext.com/cloud-service-brokerage/
Eamonn: Thanks for weighing
Eamonn: Thanks for weighing in. Let us know how ComputeNext sees the market continue to evolve. Yes, VARs definitely want more pre-integrated bundles. I heard that over and over again at Tech Data TDCloud event. But if I was a VAR, I’d get ahead of the integration curve while margins are high…
-jp
One important element missing
One important element missing here.. Systems Integration is a key challenge to become a CSB and VARs simply do not have that heritage. Those that end up buying a toolset (once they are actually commercialized) will have a difficult time differentiating themselves from every other VAR running the same tools.
As Yoda might say: Tools do
As Yoda might say: Tools do not a VAR or CSP make.
-jp