New research: Defining the Cloud Service Broker (CSB) Model

The Toronto Cloud Business Coalition has released a report (available now) designed to help IT solution providers build the capabilities needed to support business use of cloud

The Toronto Cloud Business Coalition (TCBC) and InsightaaS have released a major new report that outlines the path to developing essential Cloud Service Broker (CSB) capabilities and business practices.

For decades, hundreds of thousands of Canadian businesses have relied on a channel community comprised of VARs, managed service providers (MSPs), integrators, consultants and other service providers to provide them with IT strategy and guidance, opportunity assessment, and technical assistance with deployment, integration and support. Over time, these service providers established business patterns that delivered reasonable margin in exchange for supporting small customers or businesses with niche requirements.

Cloud had a jarring impact on these established business patterns and positions. The migration from large, fixed, up-front OPEX investments to variable CAPEX payments works very well for customers – but businesses that are based on cash flow from CAPEX transactions struggle with the transition to monthly recurring revenue (MRR) contracts. At the same time, cloud makes it easier for product vendors – especially software vendors – to deal directly with small customers and niche markets: ISVs can deliver information and demonstrations of their products (via their websites and try-before-you-buy options), can sell and collect from small businesses efficiently (via credit cards), and can deliver support (via FAQs and other online services) without relying on a ‘middle man’. The ability to sell directly provides additional business value to the vendor, in the form of better visibility and more regular contact with end customers – but it diminishes an important source of income for the service provider. At the same time, though, buyer needs for IT strategy, opportunity assessment and integration increase enormously with the almost-limitless panoply of options available via the cloud. There is a tremendous need for CSBs to help businesses to capitalize on the cloud – but the business logic associated with the CSB model has not been clearly established.

Defining the Cloud Service Broker Model is TCBC’s contribution to articulating the capabilities needed for success in the CSB market. The working group responsible for development of the report included 15 TCBC members, representing all of the perspectives in the IT supply chain. Collectively, the group articulated the complementary requirements connecting buyers, CSBs and their suppliers, and identified seven attributes that (individually or, more likely, in some combination) define the roles that CSBs will play in helping customers to accelerate adoption and use of cloud as business infrastructure, as well as development imperatives relating to skills and objectives, and four approaches that CSBs should avoid as they develop their businesses.

The main body of the report is given over to analysis of CSB business objectives and best practices. Here, the working group drilled down into five core capabilities, specifying customer requirements from the CSB and related CSB business imperatives, and adding best practices from each perspective. The report closes with a chapter on metrics and milestones – again, looking both at the customer’s journey and at the path towards developing CSB capabilities within a channel business.

Report release: Meetup at City Hall

Defining the Cloud Service Broker Model was officially released at a meetup held at Toronto City Hall on October 26th. Lead author Michael O’Neil opened the session with a brief presentation of highlights from the report to an audience of 60 channel, vendor and buy-side professionals. This was followed by an in-depth panel discussion featuring PwC Technology Consulting Leader Matt Ambrose, ProServeIT president Eric Sugar, CSB startup expert Brian Ochab and Howard Bishansky, director of Canadian channels and alliances for global cloud provider CenturyLink.

Sponsors and working group

Creation of TCBC reports is underwritten by the community’s corporate and individual sponsors. Corporate sponsors include CenturyLink, Cisco, Cogeco Peer 1, CloudOps, Information Builders, Ingram Micro, Avaya, Schneider Electric, Dimensional Strategies Inc., Twelvedot and ProServe IT.

InsightaaS and TCBC would like to recognize the working group members whose insight and candour are the source of Defining the Cloud Service Broker Model’s exception depth and quality (note – links require that you are logged into LinkedIn):

The report also benefits from expert contributions from:

InsightaaS thanks each of these thought leaders for their contributions to Defining the Cloud Systems Broker Model.

Obtaining access to the report

Like all reports produced by TCBC and its sister communities (IoT Coalition Canada, Canadian Analytics Business Coalition, and Vision2Value (V2V): The Economics of Data), Defining the Cloud Service Broker Model is available to all interested professionals. Each of the working group sponsors and members listed above is encouraged to distribute Defining the Cloud Service Broker to their peer and contact networks. The report is also available from InsightaaS: please follow this link and use the code CSB-I.

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