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Research & Insight

Research & Insight

cloud brokerage software

Making Waves—Cloud Brokerage and Integration

Debbie Fisher, Business Writer, Outsourcing Center

Although the definition of cloud computing is still evolving, it hasn’t slowed the adoption of applications being deployed in the cloud. Looking back five years, Ajay Srivastava, VP of Product Management and Strategy at Oracle Managed Cloud Services, recalls early conversations with other IT industry executives about client server computing as the advent to a new era of a shared computing model. Discussions quickly gave way to utility computing and heralded what has been known as cloud computing. Ajay predicts that organizations looking to deploy a new application are now automatically considering a cloud-based solution, considering past investments as sunk costs. This is a change that can now be felt across nearly every enterprise. Vikrant Karnik, Senior VP and Head Of Sales: Enterprise Cloud Services at Capgemini, shares a similar view. “Two to three years ago, enterprises were somewhat reluctant to take cloud seriously. But now cloud has become a fact of life.” After seeing positive results from initial application deployment, enterprises are asking what else can be changed. Cloud Computing Today What was once unfeasible is now possible. Every enterprise has a cloud agenda with CFOs asking CIOs to explain their cloud strategy. Take the case of a large energy producer in the utilities industry who could not justify the cost of additional computing power. By adopting outsourced cloud computing resources, “they can now turn on and off the extra computing capabilities they need,” cites Karnik. Oracle has seen many use cases as well across a broad set of industry verticals. “Customer Relationship Management and Talent Management are just two applications that are easily pulled off of legacy systems,” explains Srivastava. No one wants to own assets they don’t have to. Evolution to Cloud Brokerage and Integration The cloud market brought with it a host of new acronyms and terminology as well new ways to harness computing power. To understand the newest concept of cloud brokerage, it’s important to look holistically at cloud architectures in play today. Public cloud. The first cloud offerings in 2009 were web-based, relatively cheap units of computing power. Oracle’s Srivastava explained that this model appealed to IT organizations because it offered not only low cost but shifted capex to opex, provided rapid provisioning and the illusion of infinite capacity. Private cloud. Enterprises turned to this model in 2010 as it solved some of the security and complexity issues of public cloud while also boosting computing power managed by internal IT resources. Core ERP and other analytical applications now had extra resources to operate more efficiently and cost effectively. Hybrid. This model originally grew out of the need for transient computing power or handling bursting applications. IT organizations looked to hybrid clouds as the perfect solution for test environments where resources were needed for a specific period of time and could be taken up and down as warranted. By utilizing all three of these models, CIOs reaped the benefits of flexibility and cost. But by selecting best of breed providers, someone has to take responsibility for integration. Cloud brokerage brings together public and private clouds, formalizing the hybrid model. As the public market matured, suggested Srivastava, “CIOs realized that opting for a public cloud many a time resulted in a choice between performance and flexibility, out-of-the-box and ease of integration with other clouds. CIOs have to now become the system integrator between these various cloud options to satisfy the core application needs of a company.” Need for Integration CIOs spent years integrating and breaking down application silos within their internal IT infrastructure. With the growing adoption of private, public and hybrid cloud computing models, CIOs are facing a new integration challenge—to integrate across clouds and heterogeneous application environments. The complexity has ratcheted up a notch with multiple premises and processes demanding integration. “CIOs need to handle integration at various levels, from IT, application and business processes,” says Srivastava. Capgemini executive Vikrant Karnik recommends that it is better to start taking on an integrator role now rather than wait. “Leaky integration points need protection. Even though standards are lacking, there are many opportunities.” Role of Cloud Broker/Integrator According to Gartner Group, cloud services brokerage offers three capabilities: 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. Market Size, Players CIOs can look to a growing number of providers to help them integrate their cloud services. According to MarketsandMarkets, the Cloud Brokerage Enablement market will grow from $225.42 million in 2013 to $2.03 billion by 2018, at a CAGR of 55.3 percent. Cloud Brokerage Enablers are software platforms that enable such services. The overall, global Cloud Brokerage market will grow from $1.57 billion in 2013 to $10.5 billion by 2018. This represents a CAGR of 46.2 percent from 2013 to 2018. Nearly every major computing, consulting and outsourcing provider has jumped into the water along with niche cloud service providers. Waves of offers can easily drown CIOs as providers look to get a piece of the pie. “Discipline from cloud orchestration and a trusted provider are key,” recommends Karnik from Capgemini. Enterprises Leading the Way With many pieces already being outsourced, driving bigger and bigger cloud deals, enterprises in several verticals are taking Karnik’s advice and initiating cloud brokerage and integration services. High-touch customer facing applications are a great place to start. He has seen significant strides made by financial service providers to improve customer experience management. “By migrating client data on premise to the cloud, a large insurance provider was able to shift their typically negative interaction with clients who have been involved in an accident to a much more positive engagement,” says Karnik. Similar migrations are occurring in financial services as well as telecom, healthcare and retail. Consumer …

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