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Adding the Right Value: Building Cloud Brokerages That Enable

Considerations for implementing an institutional-focused cloud brokerage.

In many cases, the answer is to develop a cloud brokerage to manage the complexity. But what should your cloud broker be delivering, and how?

Our Advice

Critical Insight

  • To avoid failure, you need to provide security and compliance, but basic user satisfaction means becoming a frictionless intermediary.
  • Enabling brokers provide knowledge and guidance for the best usage of cloud.
  • While GCBs fill a critical role as a control point for IT consumption, they can easily turn into a friction point for IT projects. It’s important to find the right balance between enabling compliance and providing frictionless usability.

Impact and Result

  • Avoid disintermediation.
  • Maintain compliance.
  • Leverage economies of scale.
  • Ensure architecture discipline.

Adding the Right Value: Building Cloud Brokerages That Enable Research & Tools

1. Build a Cloud Brokerage Deck – A guide to help you start designing a cloud brokerage that delivers value beyond gatekeeping.

Define the value, ecosystem, and metrics required to add value as a brokerage. Develop a brokerage value proposition that aligns with your audience and capabilities. Define and rationalize the ecosystem of partners and value-add activities for your brokerage. Define KPIs that allow you to maximize and balance both usability and compliance.


Adding the Right Value: Building Cloud Brokerages That Enable

Considerations for implementing an institutional-focused cloud brokerage.

Your Challenge

Increasingly, large institutions and governments are adopting cloud-first postures for delivering IT resources. Combined with the growth of cloud offerings that are able to meet the certifications and requirements of this segment that has been driven by federal initiatives like Cloud-First in Canada and Cloud Smart in the United States, these two factors have left institutions (and the businesses that serve them) with the challenge of delivering cloud services to their users while maintaining compliance, control, and IT sanity.

In many cases, the answer is to develop a cloud brokerage to manage the complexity. But what should your cloud broker be delivering and how?

Navigating the Problem

Not all cloud brokerages are the same. And while they can be an answer to cloud complexity, an ineffective brokerage can drain value and complicate operations even further. Cloud brokerages need to be designed:

  1. To deliver the right type of value to its users.
  2. To strike the balance between effective governance & security and flexibility & ease of use.

Info-Tech’s Approach

By defining your end goals, framing solutions based on the type of value and rigor your brokerage needs to deliver, and focusing on the right balance of security and flexibility, you can deliver a brokerage that delivers the best of all worlds.

  1. Define the brokerage value you want to deliver.
  2. Build the catalog and partner ecosystem.
  3. Understand how to maximize adoption and minimize disintermediation while maintaining architectural discipline and compliance.

Info-Tech Insight

Sometimes a brokerage delivery model makes sense, sometimes it doesn’t! Understanding the value addition you want your brokerage to provide before creating it allows you to not only avoid pitfalls and maximize benefits but also understand when a brokerage model does and doesn’t make sense in the first place.

Project Overview

Understand what value you want your brokerage to deliver

Different institutions want brokerage delivery for different reasons. It’s important to define up front why your users need to work through a brokerage and what value that brokerage needs to deliver.

What’s in the catalog? Is it there to consolidate and simplify billing and consumption? Or does it add value further up the technology stack or value chain? If so, how does that change the capabilities you need internally and from partners?

Security and compliance are usually the highest priority

Among institutions adopting cloud, a broker that can help deliver their defined security and compliance standards is an almost universal requirement. Especially in government institutions, this can mean the need to meet a high standard in both implementation and validation.

The good news is that even if you lack the complete set of skills in-house, the high certification levels available from hyperscale providers combined with a growing ecosystem of service providers working on these platforms means you can usually find the right partner(s) to make it possible.

The real goal: frictionless intermediation and enablement

Ultimately, if end users can’t get what they need from you, they will go around you to get it. This challenge, which has always existed in IT, is further amplified in a cloud service world that offers users a cornucopia of options outside the brokerage. Furthermore, cloud users expect to be able to consume IT seamlessly. Without frictionless satisfaction of user demand your brokerage will become disintermediated, which risks your highest priorities of security and compliance.

Understand the evolution: Info-Tech thought model

While initial adoption of cloud brokerages in institutions was focused on ensuring the ability of IT to extend its traditional role as gatekeeper to the realm of cloud services, the focus has now shifted upstream to enabling ease of use and smart adoption of cloud services. This is evidenced clearly in examples like the US government’s renaming of its digital strategy from “Cloud First” to “Cloud Smart” and has been mirrored in other regions and institutions.

Info-Tech Insights

To avoid failure, you need to provide security and compliance.

Basic user satisfaction means becoming a frictionless intermediary.

Exceed expectations! Enabling brokers provide knowledge and guidance for the best usage of cloud.

  • Security & Compliance
  • Frictionless Intermediation
  • Cloud-Enabling Brokerage

Define the role of a cloud broker

Where do brokers fit in the cloud model?

  • NIST Definition: An entity that manages the use, performance, and delivery of cloud services and negotiates relationships between cloud providers and cloud consumers.
  • Similar to a telecom master agent, a cloud broker acts as the middle-person and end-user point of contact, consolidating the management of underlying providers.
  • A government or institutional cloud broker (GCB) is responsible for the delivery of all cloud services consumed by the departments or agencies it supports or that are mandated to use it.

Balancing governance and agility

Info-Tech Insight

While GCBs fill a critical role as a control point for IT consumption, they can easily turn into a friction point for IT projects. It’s important to find the right balance between enabling compliance and providing frictionless usability.

Model brokerage drivers and benefits

Reduced costs: Security through standardization: Frictionless consumption: Avoid disinter-mediation; Maintain compliance; Leverage economies of scale; Ensure architecture discipline

Maintain compliance and ensure architecture discipline: Brokerages can be an effective gating point for ensuring properly governed and managed IT consumption that meets the specific regulations and compliances required for an institution. It can also be a strong catalyst and enabler for moving to even more effective cloud consumption through automation.

Avoid disintermediation: Especially in institutions, cloud brokers are a key tool in the fight against disintermediation – that is, end users circumventing your IT department’s procurement and governance by consuming an ad hoc cloud service.

Leverage economies of scale: Simply put, consolidation of your cloud consumption drives effectiveness by making the most of your buying power.

Info-Tech Insights

Understanding the importance of each benefit type to your brokerage audience will help you define the type of brokerage you need to build and what skills and partners will be required to deliver the right value.

The brokerage landscape

The past ten years have seen governments and institutions evolve from basic acceptance of cloud services to the usage of cloud as the core of most IT initiatives.

  • As part of this evolution, many organizations now have well-defined standards and guidance for the implementation, procurement, and regulation of cloud services for their use.
  • Both Canada (Strategic Plan for Information Management and Information Technology) and the United States (Cloud Smart – formerly known as Cloud First) have recently updated their guidance on adoption of cloud services. The Australian Government has also recently updated its Cloud Computing Policy.
  • AWS and Azure both now claim Full FedRAMP (Federal Risk and Authorization Management Program) certification.
  • This has not only enabled easy adoption of these core hyperscale cloud service by government but also driven the proliferation of a large ecosystem of FedRAMP-authorized cloud service providers.
  • This trend started with government at the federal level but has cascaded downstream to provincial and municipal governments globally, and the same model seems likely to be adopted by other governments and other institution types over time.

Info-Tech Insight

The ecosystem of platforms and tools has grown significantly and examples of best practices, especially in government, are readily available. Once you’ve defined your brokerage’s value stance, the building blocks you need to deliver often don’t need to be built from scratch.

Address the unique challenges of business-led IT in institutions

With the business taking more accountability and management of their own technology, brokers must learn how to evolve from being gatekeepers to enablers.

This image This lists the Cons of IT acting as a gatekeeper providing oversight, and the Pros of IT acting as an Enabler in an IT Partnership.  the Cons are: Restrict System Access; Deliver & Monitor Applications; Own Organizational Risk; Train the Business.  The Pros are: Manage Role-Based Access; Deliver & Monitor Platforms; Share Organizational Risk; Coach & Mentor the Business

Turn brokerage pitfalls into opportunities

The greatest risks in using a cloud broker come from its nature as a single point of distribution for service and support. Without resources (or automation) to enable scale, as well as responsive processes for supporting users in finding the right services and making those services available through the brokerage, you will lose alignment with your users’ needs, which inevitably leads to disintermediation, loss of IT control, and broken compliance

Info-Tech Insights

Standardization and automation are your friend when building a cloud brokerage! Sometimes this means having a flexible catalog of options and configurations, but great brokerages can deliver value by helping their users redefine and evolve their workloads to work more effectively in the cloud. This means providing guidance and facilitating the landing/transformation of users’ workloads in the cloud, the right way.

Challenges Impact
  • Single point of failure
  • Managing capacity
  • Alignment of brokerage with underlying agencies
  • Additional layer of complexity
  • Inability to deliver service
  • Disintermediation
  • Broken security/compliance
  • Loss of cost control/purchasing power

Validate your cloud brokerage strategy using Info-Tech’s approach

Value Definition

  • Define your brokerage type and value addition

Capabilities Mapping

  • Understand the partners and capabilities you need to be able to deliver

Measuring Value

  • Define KPIs for both compliant delivery and frictionless intermediation

Provide Cloud Excellence

  • Move from intermediation to enablement and help users land on the cloud the right way

Define the categories for your brokerage’s benefit and value

Depending on the type of brokerage, the value delivered may be as simple as billing consolidation, but many brokerages go much deeper in their value proposition.

This image depicts a funnel, where the following inputs make up the Broker Value: Integration, Interface and Management Enhancement; User Identity and Risk Management/ Security & Compliance; Cost & Workload Efficiency, Service Aggregation

Define the categories of brokerage value to add

  • Purchasing Agents save the purchaser time by researching services from different vendors and providing the customer with information about how to use cloud computing to support business goals.
  • Contract Managers may also be assigned power to negotiate contracts with cloud providers on behalf of the customer. In this scenario, the broker may distribute services across multiple vendors to achieve cost-effectiveness, while managing the technical and procurement complexity of dealing with multiple vendors.
    • The broker may provide users with an application program interface (API) and user interface (UI) that hides any complexity and allows the customer to work with their cloud services as if they were being purchased from a single vendor. This type of broker is sometimes referred to as a cloud aggregator.
  • Cloud Enablers can also provide the customer with additional services, such as managing the deduplication, encryption, and cloud data transfer and assisting with data lifecycle management and other activities.
  • Cloud Customizers integrate various underlying cloud services for customers to provide a custom offering under a white label or its own brand.
  • Cloud Agents are essentially the software version of a Contract Manager and act by automating and facilitating the distribution of work between different cloud service providers.

Info-Tech Insights

Remember that these categories are general guidelines! Depending on the requirements and value a brokerage needs to deliver, it may fit more than one category of broker type.

Brokerage types and value addition

Info-Tech Insights

Each value addition your brokerage invests in delivering should tie to reinforcing efficiency, compliance, frictionlessness, or enablement.

Value Addition Purchasing Agent Contract Manager Cloud Enabler Cloud Customizer Cloud Agent
Underlying service selection

Standard Activity

Standard Activity Standard Activity Standard Activity Common Activity
Support and info Standard Activity

Common Activity

Standard Activity Standard Activity Common Activity
Contract lifecycle (pricing/negotiation) Standard Activity Common Activity Standard Activity
Workload distribution (to underlying services) (aggregation) Common Activity Standard Activity Standard Activity Standard Activity
Value-add or layered on services Standard Activity Common Activity
Customization/integration of underlying services Standard Activity
Automated workload distribution (i.e. software) Standard Activity

Start by delivering value in these common brokerage service categories

Security & Compliance

  • Reporting & Auditing
  • SIEM & SOC Services
  • Patching & Monitoring

Cost Management

  • Right-Sizing
  • Billing Analysis
  • Anomaly Detection & Change Recommendations

Data Management

  • Data Tiering
  • Localization Management
  • Data Warehouse/Lake Services

Resilience & Reliability

  • Backup & Archive
  • Replication & Sync
  • DR & HA Management
  • Ransomware Prevention/Mitigation

Cloud-Native & DevOps Enablement

  • Infrastructure as Code (IaC)
  • DevOps Tools & Processes
  • SDLC Automation Tools

Design, Transformation, and Integration

  • CDN Integration
  • AI Tools Integration
  • SaaS Customizations

Activity: Brokerage value design

Who are you and who are you building this for?

  • Internal brokerage (i.e. you are a department in an organization that is tasked with providing IT resources to other internal groups)
    • No profit motivation
    • Primary goal is to maintain compliance and avoid disintermediation
  • Third-party brokerage (i.e. you are an MSP that needs to build a brokerage to provide a variety of downstream services and act as the single point of consumption for an organization)
    • Focus on value-addition to the downstream services you facilitate for your client
    • Increased requirement to quickly add new partners/services from downstream as required by your client

What requirements and pains do you need to address?

  • Remember that in the world of cloud, users ultimately can go around IT to find the resources and tools they want to use. In short, if you don’t provide ease and value, they will get it somewhere else.
  • Assess the different types of cloud brokerages out there as a guide to what sort of value you want to deliver.

Why are you creating a brokerage? There are several categories of driver and more than one may apply.

  • Compliance and security gating/validation
  • Cost consolidation and governance
  • Value-add or feature enhancement of raw/downstream services being consumed

It’s important to clearly understand how best you can deliver unique value to ensure that they want to consume from you.

This is an image of a Venn diagram between the following: Who are you trying to serve?; Why and how are you uniquely positioned to deliver?; What requirements do they have and what pain points can you help solve?.  Where all three circles overlap is the Brokerage Value Proposition.

Understand the ecosystem you’ll require to deliver value

GCB

  • Enabling Effectiveness
  • Cost Governance
  • Adoption and User Satisfaction
  • Security & Compliance

Whatever value proposition and associated services your brokerage has defined, either internal resources or additional partners will be required to run the platform and processes you want to offer on top of the defined base cloud platforms.

Info-Tech Insights

Remember to always align your value adds and activities to the four key themes:

  • Efficiency
  • Compliance
  • Frictionlessness
  • Cloud Enablement

Delivering value may require an ecosystem

The additional value your broker delivers will depend on the tools and services you can layer on top of the base cloud platform(s) you support.

In many cases, you may require different partners to fulfil similar functions across different base platforms. Although this increases complexity for the brokerage, it’s also a place where additional value can be delivered to end users by your role as a frictionless intermediary.

Base Partner/Platform

  • Third-party software & platforms
  • Third-party automations & integrations
  • Third-party service partners
  • Internal value-add functions

Build the ecosystem you need for your value proposition

Leverage partners and automation to bake compliance in.

Different value-add types (based on the category/categories of broker you’re targeting) require different additional platforms and partners to augment the base cloud service you’re brokering.

Security & Config

  • IaC Tools
  • Cloud Resource Configuration Validation
  • Templating Tools
  • Security Platforms
  • SDN and Networking Platforms
  • Resilience (Backup/Replication/DR/HA) Platforms
  • Data & Storage Management
  • Compliance and Validation Platforms & Partners

Cost Management

  • Subscription Hierarchy Management
  • Showback and Chargeback Logic
  • Cost Dashboarding and Thresholding
  • Governance and Intervention

Adoption & User Satisfaction

  • Service Delivery SLAs
  • Support Process & Tools
  • Capacity/Availability Management
  • Portal Usability/UX

Speed of Evolution

  • Partner and Catalog/Service Additions
  • Broker Catalog Roadmapping
  • User Request Capture (new services)
  • User Request Capture (exceptions)

Build your features and services lists

Incorporate your end user, business, and IT perspectives in defining the list of mandatory and desired features of your target solution.

See our Implement a Proactive and Consistent Vendor Selection Process blueprint for information on procurement practices, including RFP templates.

End User

  • Visual, drag-and-drop models to define data models, business logic, and user interfaces
  • One-click deployment
  • Self-healing application
  • Vendor-managed infrastructure
  • Active community and marketplace
  • Prebuilt templates and libraries
  • Optical character recognition and natural language processing

Business

  • Audit and change logs
  • Theme and template builder
  • Template management
  • Knowledgebase and document management
  • Role-based access
  • Business value, operational costs, and other KPI monitoring
  • Regulatory compliance
  • Consistent design and user experience across applications
  • Business workflow automation

IT

  • Application and system performance monitoring
  • Versioning and code management
  • Automatic application and system refactoring and recovery
  • Exception and error handling
  • Scalability (e.g. load balancing) and infrastructure management
  • Real-time debugging
  • Testing capabilities
  • Security management
  • Application integration management

Understand the stakeholders

Hyperscale Platform/Base Platform: Security; Compliance and Validation;Portal/Front-End; Cost Governance; Broker Value Add(s)

Depending on the value-add(s) you are trying to deliver, as well as the requirements from your institution(s), you will have a different delineation of responsibilities for each of the value-add dimensions. Typically, there will be at least three stakeholders whose role needs to be considered for each dimension:

  • Base Cloud Provider
  • Third-Party Platforms/Service Providers
  • Internal Resources

Info-Tech Insights

It’s important to remember that the ecosystem of third-party options available to you in each case will likely be dependent on if a given partner operates or supports your chosen base provider.

Define the value added by each stakeholder in your value chain

Value Addition Cost Governance Security & Compliance Adoption and User Satisfaction New Service Addition Speed End-User Cloud Effectiveness
Base platform(s)
Third party
Internal

A basic table of the stakeholders and platforms involved in your value stream is a critical tool for aligning activities and partners with brokerage value.

Remember to tie each value-add category you’re embarking on to at least one of the key themes!

Cost Governance → Efficiency

Security & Compliance → Compliance

Adoption & User Satisfaction → Frictionlessness

New Service Addition Responsiveness → Frictionlessness, Enablement

End-User Cloud Effectiveness → Enablement

Info-Tech Insights

The expectations for how applications are consumed and what a user experience should look like is increasingly being guided by the business and by the disintermediating power of the cloud-app ecosystem.

“Enabling brokers” help embrace business-led IT

In environments where compliance and security are a must, the challenges of handing off application management to the business are even more complex. Great brokers learn to act not just as a gatekeeper but an enabler of business-led IT.

Business Empowerment

Organizations are looking to enhance their Agile and BizDevOps practices by shifting traditional IT practices left and toward the business.

Changing Business Needs

Organizational priorities are constantly changing. Cost reduction opportunities and competitive advantages are lost because of delayed delivery of features.

Low Barrier to Entry

Low- and no-code development tools, full-stack solutions, and plug-and-play architectures allow non-technical users to easily build and implement applications without significant internal technical support or expertise.

Democratization of IT

A wide range of digital applications, services, and information are readily available and continuously updated through vendor and public marketplaces and open-source communities.

Technology-Savvy Business

The business is motivated to learn more about the technology they use so that they can better integrate it into their processes.

Balance usability and compliance: accelerate cloud effectiveness

Move to being an accelerator and an enabler! Rather than creating an additional layer of complexity, we can use the abstraction of a cloud brokerage to bring a wide variety of value-adds and partners into the ecosystem without increasing complexity for end users.

Manage the user experience

  • Your portal is a great source of data for optimizing user adoption and satisfaction.
  • Understand the KPIs that matter to your clients or client groups from both a technical and a service perspective.

Be proactive and responsive in meeting changing needs

  • Determine dashboard consumption by partner view.
  • Regularly review and address the gaps in your catalog.
  • Provide an easy mechanism for adding user-demanded services.

Think like a service provider

  • You do need to be able to communicate and even market internally new services and capabilities as you add them or people won't know to come to you to use them.
  • It's also critical in helping people move along the path to enablement and knowing what might be possible that they hadn't considered.

Provide cloud excellence functions

Enablement Broker

  • Mentorship & Training
    • Build the skills, knowledge, and experiences of application owners and managers with internal and external expertise.
  • Organizational Change Leadership
    • Facilitate cultural, governance, and other organizational changes through strong relationships with business and IT leadership.
  • Good Delivery Practices & Thinking
    • Develop, share, and maintain a toolkit of good software development lifecycle (SDLC) practices and techniques.
  • Knowledge Sharing
    • Centralize a knowledgebase of up-to-date and accurate documentation and develop community forums to facilitate knowledge transfer.
  • Technology Governance & Leadership
    • Implement the organizational standards, policies, and rules for all applications and platforms and coordinate growth and sprawl.
  • Shared Services & Integrations
    • Provide critical services and integrations to support end users with internal resources or approved third-party providers and partners.

Gauge value with the right metrics

Focus your effort on measuring key metrics.

Category

Purpose

Examples

Business Value – The amount of value and benefits delivered. Justify the investment and impact of the brokerage and its optimization to business operations. ROI, user productivity, end-user satisfaction, business operational costs, error rate
Application Quality – Satisfaction of application quality standards. Evaluate organizational effort to address and maximize user satisfaction and adoption rates. Adoption rate, usage friction metrics, user satisfaction metrics
Delivery Effectiveness – The delivery efficiency of changes. Enable members to increase their speed to effective deployment, operation, and innovation on cloud platforms. Speed of deployment, landing/migration success metrics

Determine measures that demonstrate the value of your brokerage by aligning it with your quality definition, value drivers, and users’ goals and objectives. Recognize that your journey will require constant monitoring and refinement to adjust to situations that may arise as you adopt new products, standards, strategies, tactics, processes, and tools.

Activity Output

Ultimately, the goal is designing a brokerage that can evolve from gatekeeping to frictionless intermediation to cloud enablement.

Maintain focus on the value proposition, your brokerage ecosystem, and the metrics that represent enablement for your users and avoid pitfalls and challenges from the beginning.

Activity: Define your brokerage type and value addition; Understand the partners and capabilities you need to be able to deliver; Define KPIs for both delivery (compliance) and adoption (frictionlessness); Output: GCB Strategy Plan; Addresses: Why and when you should build a GCB; How to avoid pitfalls; How to maximize benefits; How to maximize responsiveness and user satisfaction; How to roadmap and add services with agility.

Appendix

Related blueprints and tools

Document Your Cloud Strategy

This blueprint covers aligning your value proposition with general cloud requirements.

Define Your Digital Business Strategy

Phase 1 of this research covers identifying value chains to be transformed.

Embrace Business-Managed Applications

Phase 1 of this research covers understanding the business-managed applications as a factor in developing a frictionless intermediary model.

Implement a Proactive and Consistent Vendor Selection Process

This blueprint provides information on partner selection and procurement practices, including RFP templates.

Bibliography

“3 Types of Cloud Brokers That Can Save the Cloud.” Cloud Computing Topics, n.d. Web.

Australian Government Cloud Computing Policy. Government of Australia, October 2014. Web.

“Cloud Smart Policy Overview.” CIO.gov, n.d. Web.

“From Cloud First to Cloud Smart.” CIO.gov, n.d. Web.

Gardner, Dana. “Cloud brokering: Building a cloud of clouds.” ZDNet, 22 April 2011. Web.

Narcisi, Gina. “Cloud, Next-Gen Services Help Master Agents Grow Quickly And Beat 'The Squeeze' “As Connectivity Commissions Decline.” CRN, 14 June 2017. Web.

Smith, Spencer. “Asigra calls out the perils of cloud brokerage model.” TechTarget, 28 June 2019. Web.

Tan, Aaron. “Australia issues new cloud computing guidelines.” TechTarget, 27 July 2020. Web.

The European Commission Cloud Strategy. ec.europa.eu, 16 May 2019. Web.

“TrustRadius Review: Cloud Brokers 2022.” TrustRadius, 2022. Web.

Yedlin, Debbie. “Pros and Cons of Using a Cloud Broker.” Technology & Business Integrators, 17 April 2015. Web.

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