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Making Leaders Successul Every Day

Augus 10, 2011 | Updaed: Sepember 22, 2011

Cud Brker — A New BusnessMde Paradgmb Sean Red, Ph.D.r Vendr Sraeg Pressnas

http://www.forrester.com/



© 2011 Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks o Forrester Research, Inc. All other trademarks are the property o their respective owners. Reproduction or sharing o thiscontent in any orm without prior written permission is strictly prohibited. To purchase reprints o this document, please email [email protected]. For additional reproduction and usage inormation, see Forrester’s Citation Policy located at www.orrester.com. Inormation is

based on best available resources. Opinions refect judgment at the time and are subject to change.

Fr Vendr Sraeg Pressnas

ExECUtiVE SUMMARy

One o the key principles o cloud computing is the sharing o resources across various inrastructure

domains and locations. As more clients get to use the dierent resource pools available and overall

resource elasticity grows and matures, new business models will emerge around the reselling and

integration o available resource pools: Enter the cloud broker business model. Tis report denes the

current and uture business models around cloud computing and outlines why the cloud broker model

represents the most promising, but also the most ambitious, cloud approach. It shows why it oersI and telecom service providers — but also other vendors — the timely and unique opportunity to

overcome the rapid commoditization o their existing services business and build a sustainable, more

margin-rich service delivery model. Vendor strategists need to start today to make themselves amiliar

with the implications and challenges at hand, as the rst providers will take cloud broker oerings to

market within the next 12 months.

tABlE o F CoNtEN tSPicig Yur Pace I Te Cud Vaue Cai

Frreser’s Cud Cmpung tanm Heps

iden yur Psnng tradna Busness Mdes Evve in NewCud Segmens

Uderstadig Te Cud Brer Busiess

Mde

the Brker’s Vaue Prpsn is Based on theinerperab o Prvae And Pubc Cuds

Ptetia Payers I Te Cud Brer Space

Cmpnen Vendrs Make Up the CudBrker Supp Chan

Cud inrasrucure Prvders PenaEvve in Ear Cud Brkers

RECoMMENDAtioNS

Embrace Te Cud Brer Mde T Drive

Sustaiabe Grt Ad Margis

Suppemeta Materia

NotES & RESoURCESFrreser nervewed mre han 30 cud

vendrs and servce prvders, ncudng

6usn USA, Akama technges, Appcnm,

AppDrec, Apprenda, Ara Ssems, Capgemn,

Cud.cm, CudSwch, C techng

Servces Grup, Cmpuer Scences Crpran

(CSC), CmSc, Crds, Equn, ud operans,

Fujsu, Gerncs/KPN, GreenBun, iBM,

Jamcracker, laer 7 technges, Mcrs,

Mrphabs, Rackspace, RghScae, rPah,

SaeNe, saesrce.cm, t-Ssems inernana,

UShareS, Verzn, Vrua Ark, VMware, and

Zura.

Reated Researc Dcumets“Szng the Cud”

Apr 21, 2011

“Cud orchesran Mdes”

Februar 11, 2011

“ the Evun o Cud Cmpung Markes”

Ju 6, 2010

Augus 10, 2011 | Updaed: Sepember 22, 2011

Cud Brker — A New Busness Mde ParadgmDervng Mre Busness And Ecnmc Mdes Frm Cud Cmpung

by Stefa Ried, P.D.wh Pasca Mazke, Jean-Perre Garban, and Reedwan iqba

2

6

11

14

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http://www.forrester.com/go?docid=58161&src=57809pdf









© 2011, Frreser Research, inc. Reprducn PrhbedAugus 10, 2011 | Updaed: Sepember 22, 2011

Cud Brker — A New Busness Mde Paradgm Fr Vendr Sraeg Pressnas

2

PICkInG YoUR PlACE In ThE CloUD VAlUE ChAIn

Te cloud market continues to attract a large number o players rom widely dierent technology

and business backgrounds. While many new vendors appear in the cloud space every month, most

o the established soware vendors, inormation and communications technology (IC) service

providers, and I consulting rms are trying to extend their existing portolio with cloud-related

oerings. Given the diversity o players and the still immature state o the market, picking the right

place in what is an emerging space and building the right business model represent signicant

vendor strategy challenges.

For this report, Forrester interviewed vendor strategists at more than 30 leading and emerging

cloud vendors to discuss and identiy possible business models and value propositions around cloud

computing. It quickly became clear during these discussions that many vendor strategists continue

to struggle to dene the cloud space they are operating in and that value propositions remain

moving targets. But the interviews also revealed similarity across dierent business approaches,which eventually will lead to the emergence o totally new business models or cloud computing. In

particular, the cloud broker business model is emerging as one o the most promising and ambitious

models because it oers a unied approach to virtually all cloud segments — rom inrastructure-as-

a-service (IaaS) to people-as-a-service or end-to-end business-process-as-a-service (BPaaS).

Frrester’s Cud Cmputig Taxmy heps Idetify Yur Psitiig

For clients, vendors, and market observers, cloud computing to this day represents a conusing

battle ground. Te conusion is made even worse because many vendors are misusing the cloud

term to market traditional products and services that don’t actually show any o the typical

characteristics o cloud, such as standardization, pay-per-use, or sel-service. o provide structureto this puzzling picture, Forrester developed a market taxonomy dening 12 distinct cloud market

segments across the dierent levels o resource sharing — rom private cloud to public cloud (see

Figure 1).1



© 2011, Frreser Research, inc. Reprducn Prhbed Augus 10, 2011 | Updaed: Sepember 22, 2011


3

Figure 1 Frreser’s Cud Cmpung tanm

Each o the 12 dierent cloud market segments represents dierent levels o maturity and adoption

speed and hence also provides or dierent market opportunities in terms o market size.2 However,

two general trends are emerging on opposite sides o this picture:

· Inrastructure cloud markets are commoditizing quickly. IaaS in the public cloud is the most

commoditized cloud segment today; its trajectory will mimic that o the traditional hardware

space — ollowing Moore’s law.3 Many IaaS oerings are already interchangeable and wholly

standardized. For example .NE or Java workloads can be deployed across multiple IaaS options

without any change. Recent trends in platorm-as-a-service (PaaS) unveiled a broader variety

o platorm options — or example, or Java Spring or Business Process Modeling Notation

(BPMN)-based workloads.4

· New markets are evolving around the pooling o human resources. While the cloud-based

inrastructure and middleware segments are essentially utilities, one can also imagine using

the cloud to pool human resources. As an example, imagine a large retail organization that

currently operates a call center or phone order entry services based on a soware-as-a-service

(SaaS) customer relationship management (CRM) application. Te rm may be able to operate

Source: Forrester Research, Inc.57809

Purecloudmarket

Extendedcloudmarket

Public cloud

Virtual privatecloud

Private cloud

Private

Technology

Shared

Businessprocess

Informationand processes

BPaaS

Dynamicbusiness process

outsourcingservices

Infrastructure

Dynamicinfrastructure

services

IaaS

Infrastructurevirtualization

tools

Middleware

PaaS

Cloud-basedintegration

(CBI)

Middlewarevirtualization

tools

Applications

SaaS

Dynamicapps

services

Appsvirtualization

tools

BPvirtualization

tools





4

this call center eciently with their own sta during periods o normal demand. However, the

rm can also support peak loads (i.e., during the Christmas period) or unpredicted bottlenecks

with additional people — acting on the same standardized business process. I there is no long-

term contract and these additional “people-as-a-service” are available at short notice, Forresterconsiders this to be a business-process-as-a-service (BPaaS).

Traditia Busiess Mdes Evve It ne Cud Segmets

Beore we discuss the various cloud business models and their potential benets, we need to explore

the relationship between the traditional value contributions o independent soware vendors (ISVs)

and service providers and the new cloud computing markets. aking the traditional hardware

business out o the equation or a moment, there are three traditional provider business models that

contribute to the cloud value proposition:5

· Pure packaged soware models. Tis pertains to the business o developing and sellingtraditional packaged business applications, middleware, databases, and all kinds o soware tools.

· Pure consulting models. Tis pertains to the business o providing traditional I consulting

services or systems integration scenarios, custom application development, or business process

management solutions.

· Pure inrastructure models. Tis pertains to the traditional I outsourcing and hosting

services business, including telecom managed services.

Because these traditional business models are starting to converge in the cloud computing space, we

now see them evolving into seven new cloud business models (see Figure 2):





5

Figure 2 tradna Vaue Cnrbun Mdes Prvde A M o Cud Vaue Prpsns

· Cloud builder. Although this may not seem obvious, consulting models also exist in the cloud.

Te cloud builder helps enterprises establish the required technology and business strategy needed to build a private cloud. For example, I service providers like Capgemini, CSC, HP, and

IBM maintain blueprint road maps and playbooks or building private cloud inrastructures.

Some cloud builders even address local cloud providers, which use these consulting services to

build their virtual private cloud inrastructure.6

· Cloud tool vendor. Tese ISVs oer licensed soware tools, which help enterprises and cloud

providers build and provide their cloud services. Companies in this category include specialists

like Cloud.com, Eucalyptus Systems, and RightScale as well as larger players like IBM, Microso,

Oracle, and VMware. Te private and virtual private cloud segments are again the best target

markets or this new value proposition, as public cloud providers develop many tools on their

own and leverage open source solutions extensively.

· Cloud inrastructure provider. Although airly similar to the traditional I outsourcing model,

vendors in this category provide inrastructure and hosting services specically or cloud needs.

Te key characteristics o the oerings include highly standardized and virtualized data center

inrastructures as well as the supplying o the appropriate service provisioning and billing

platorms. Vendors in this space include Amazon.com and GoGrid as well as traditional hosting

providers like Rackspace and -Systems International with virtual private cloud oerings.


Puresoftwaremodel

Cloudtool

vendor

Cloudvalue-added

reseller

Cloudbuilder

Cloudintegrator

SaaSprovider

Cloudbroker

Cloudinfrastructure

provider

Pureconsultingmodel

Pureinfrastructure

model





6

· Cloud integrator. Tis model is pretty close to the traditional systems integrator value

proposition with its mix o consulting, integration, and hosting oerings. However, the skills o

a cloud integrator have evolved signicantly beyond that. For example, the traditional expertise

around traditional middleware is extended by the knowledge o conguring cloud-based

integration (CBI).7 raditional I service providers like HP, IBM, and -Systems International

have started to ocus on this opportunity more explicitly as an extension o their traditional

business. IBM, meanwhile, underpins its service oerings in this space with an integrated

product suite that it evolved in particular through the acquisition o Cast Iron Systems in 2010.8

· SaaS provider. Probably the most mature and prominent o all the cloud business models,

specialist soware providers like NetSuite, salesorce.com, and Workday oer business

application unctionality as a service over the public cloud. Because this model requires the

converged skill sets o traditional ISVs and hosting providers, the cloud-native pure plays drive

most o the growth and innovation while many traditional soware vendors struggle to catch up.

· Cloud value-added reseller (VAR). While the assumption in the early days o cloud computing

was that sel-service provisioning would eliminate the reseller model completely, an increasing

number o SaaS providers are using a VAR channel to manage local subscriptions. Companies

like Capgemini are, in many instances, acting as resellers o SaaS subscriptions and provide

additional services around customization and integration with core systems.9

· Cloud broker. Last, but not least, the cloud broker represents the most complex business model,

oering a wide value contribution in the emerging cloud space. Essentially, this model leverages

skills and capabilities rom all three o the traditional business models o soware, consulting,

and inrastructure. We dedicate the ollowing sections o this report to this new business model.

While startups would do better to ocus on a single element o value contribution, many established

vendors are taking a portolio approach. For example, hardware vendors like Dell and HP are

leveraging their I services business units to provision cloud builder and cloud integrator oerings.

Tese players run their hardware and services businesses in separate business units to avoid channel

conficts. Meanwhile soware vendors, consulting rms, and hosting providers are transorming

their portolio to oer some cloud services in addition to their traditional non-cloud services out o

the same business unit.

UnDERSTAnDInG ThE CloUD BRokER BUSInESS MoDEl

Although cloud computing is probably still two decades away rom being a commoditized utility,

the underlying delivery models will ollow those o other utility business models. For example, high

standardization in electricity grids has moved the entire industry away rom fat, volume-based

pricing or industrial consumers to the spot pricing o today’s smart grids. Sophisticated smart

grids not only exchange capacity between power plants o the same kind across countries, but they





7

also balance the capacity o renewable wind and solar power sources with that o traditional power

plants. Te price fuctuates according to the actual source o the electricity. Forrester believes that

the cloud broker business model is going to evolve around similar dynamics and adoption patterns:

· Simple broker: dynamic sourcing within one cloud segment, such as public cloud IaaS. Most

providers o public cloud IaaS oer simple pricing independent o the time or actual load on

their inrastructure. However, as price pressured increase and IaaS and PaaS standards evolve,

the price o compute power will start to fuctuate. Providers will very likely oer spare capacity

at simpler service-level agreements (SLAs) or a lower spot price on short notice. Dynamic

sourcing based on spot pricing uels the next obvious economic benet. raditional I users

will not be able to keep track and will welcome a cloud broker, which will act rather like a travel

agent (see Figure 3). Based on the workload classication, I users will decide between a private

resource — like a private car — and a shared cloud resource — like public transportation. Just

like a travel agent, the cloud broker will provide the best sourcing option or a cloud service,provision it automatically, and provide a consolidated bill.

· Full broker: dynamic sourcing across public, virtual private, and private clouds. Some

workloads can, both technically and in terms o compliance, be deployed in dierent cloud

models. Stretching the travel agent analogy, you could make some national trips by plane or

train — or in your company car. Logistics companies like DHL International or FedEx, or

example, have corporate feets o cars and their own airplanes but they also leverage air-cargo

capacity or other reight carriers like Luhansa Cargo. Te decision to route a parcel via a

company’s own logistics network or via a mixture o its own cars and airplanes or shared

airplanes and trucks are made extremely dynamically. Te logistics business is obviously a

very mature business. Forrester predicts the same level o mature dynamic sourcing acrossowned and shared inrastructure, applications, and people as the ultimate evolution o all cloud

computing business models.

While cost reduction was initially the prime motivation or adopting cloud, a recent Forrester survey

revealed that better inrastructure elasticity and reduced time-to-market or new platorms and

applications have become equally or even more important to decision-makers.10 And i agility and

fexibility are the overriding argument or clients to buy into the cloud, then the cloud broker will

become an inevitable proposition or uture cloud growth.





8

Figure 3 the Smpe Cud Brker Busness Mde — Smar t A trave Agen

Te Brer’s Vaue Prpsiti Is Based o Te Iterperabiity of Private Ad Pubic Cuds

Te simple broker model gains value only by comparing similar cloud provider options and usingdynamic provisioning based on the actual spot prices o these resources. Te ull broker goes ar

beyond this. It uses “cloud bursting” to provide I users with higher value or a lower price. Te

providers o the new cloud broker model will still have a higher margin than with commoditized

IaaS services. Forrester denes cloud bursting as ollows:11

Cloud bursting is the dynamic relocation of workloads from private environments to cloud

providers and vice versa. A workload can represent IT infrastructure or end-to-end business

processes.

Te key source o new margin is the industrialized implementation o a cloud-bursting management

inrastructure and process ramework (see Figure 4). By harvesting the spare resource capacity o all

three cloud domains — private, virtual private, and public clouds — the cloud broker nds enough

resources to oer to clients. For example, the broker can provide a “virtual virtual” machine at an

even lower price point than a commoditized IaaS oering, such as Amazon Web Services (AWS).

Te cloud broker’s business model basically involves sharing this price advantage with the I user

while keeping a healthy margin o 5% or more or the actual broker service.


Public transportation

Private cars

Travel agent

Describe stable policies,negotiate conditions,delegate booking

Simply use

Find, compare qualityand availability, book,invoice, insure, etc.

Public cloud


Private cloud

Private

Technology

Shared

Businessprocess

Informationand processes

Infrastructure





9

Figure 4 the Fu Cud Brker Busness Mde

Vendor strategists looking to build a ull cloud broker strategy need to take the ollowing key

components and process steps into account:

· Embrace the cloud principles o standardization, sel service, and pay-per-use. Service

standardization will have to become the key design point or cloud broker oerings i they are

to help CIOs acilitate their internal governance and standardization strategies or individual

I users. Te “consumerized” mobile app stores will merge with traditional Inormationechnology Inrastructure Library (IIL)-based service catalogs to orm a new service app

store; this will oer enterprise inrastructure (e.g., virtual servers), business applications (e.g., a

subscription-based account or the corporate ERP system), a selection o public and corporate

mobile apps, and, nally, traditional desktop services (e.g., a memory upgrade or your desktop

computer).


Public cloude.g.,

development,test, simulation


e.g., productive,front office

Private cloude.g., productive,

back office+ all otherworkloads

Aggregation

• Serviceorchestration

• Provider contracting

• Resource selection

• Identity mgmt.

Demand

Governance

Usage

Demandvalue-add

Deliveryvalue-add

CIO

Cloud broker business model

Elasticity management

• SLA compliance

• Metering

• Dashboards, monitoring

• Business transaction

monitoring

• Billing/chargeback

Dynamic sourcing

• Service operations

• Dynamic routing

• Capacity mgmt.

• Performancemanagement

Static policies

Dynamic sourcing

Enterprise

Workload management

• Workload classification

• Capacity planning

• Price prediction

• Performance mgmt.

• Configuration mgmt.

Autonomous

sourcing

Cloudresources

Transparent to customers

Non-cloud — managed servicesProductive legacy applications on own, but managed infrastructure;

spare capacity now contributes to the private cloud .

Not transparent

Enterprise

infrastructure

Business

applications

Mobileapplications

Desktop

services





10

· Introduce sophisticated workload management. Te broker will have to oer next-generation

enterprise workload management. As discussed, not all workloads are applicable to cloud-

bursting scenarios. Some workloads might always have to be operated in a traditional managed

services way. However, the goal is to handle as many workloads as possible through the broker,

even i the workload classication unveils a very limited applicability or cloud. Understanding

the non-cloud workloads will be invaluable or a broker; it can leverage this knowledge to utilize

traditional private inrastructure capacity or those workloads that can go into the cloud on a

temporary basis.

· Aggregate multiple service combinations. Providers are already oering mashup approaches

to clients. Some elements o the business logic might be located on a mainrame and some in

a Java application that is hosted in the cloud. However, current operating models point to a

specic cloud location, such as an Amazon Elastic Compute Cloud (EC2) instance. Te new

service aggregation assumes that the endpoints can vary: Some instances o the Java app mightbe on Amazon, some on Rackspace, and others on private inrastructures that leverage tools

rom vendors like Eucalyptus or a private OpenStack cloud.

· Perorm dynamic sourcing — which is invisible to the IT user. Leveraging state-o-the art

perormance management and monitoring solutions, the cloud broker will identiy the best

sourcing option or those workloads that can go in the cloud. Tis will acilitate the dynamic

sourcing and provision inherent in the cloud broker value proposition. While workload

management and the creation o multiple resource aggregation options remains static, dynamic

sourcing will constantly look or alternative locations or workloads. Te concept will stimulate

the shi rom plain virtual-machine-based inrastructure to PaaS, as these platorms have a

higher understanding o the application itsel.

· Enable transparent elasticity management. Te cloud broker will relocate all the workloads

that are suitable or the cloud in an autonomous and proactive way — without seeking prior

approval rom the end user. But enterprises will want assurance around SLA perormance and

will want to monitor closely the perormance that is nally delivered and the costs involved.

O course, this cloud broker business model represents a vision or the uture. Some o the

required components are scattered across dierent existing oerings like I management soware,

business transaction monitoring, and modern billing solutions. Tere is even an early example o

a successul broker service or SaaS business applications.12

However, a lot o unctionality, suchas the autonomous policy-driven cloud bursting, is not available in any packaged solution today.

Providers o cloud broker business models will need to develop the missing pieces on their own. But

vendor strategists also need to realize that the broker model moves cloud computing ar beyond the

sharing o hardware or soware resources. Based on the ramework o Forrester’s cloud computing

taxonomy, we envision the broker model becoming a key acilitator o BPaaS oerings in which

shared people resources become the real value proposition. It is absolutely crucial or a ull cloud

broker to convince the customer to grant wide access to the management o private on-premises

inrastructure — or even sta in the case o BPaaS.





11

PoTEnTIAl PlAYERS In ThE CloUD BRokER SPACE

In our interviews with more than 30 dierent vendors operating in the cloud space today, we also

tried to identiy which o the current cloud inrastructure providers, cloud tool vendors, and cloud

builders could play in the cloud broker space going orward. Our research unveiled two dierent

categories o players.

Cmpet Vedrs Mae Up Te Cud Brer Suppy Cai

Many vendors contribute components vital or building a cloud broker strategy and inrastructure.

Looking at the dierent elements required, we see the ollowing categories o players in the cloud

broker supply chain:

· Metering solutions. For example, 6usion USA is a airly new vendor that ocuses on the

metering o complex cloud deployments. We also see some new metering unctionality around

the billing vendors and new metering capabilities in traditional I monitoring tools.

· Content delivery networks. Akamai echnologies is a leading content delivery network (CDN);

it is already accelerating multiple Internet interactions beyond its original CDN business. Te

cloud broker will be able to push Akamai-accelerated cloud apps to dierent locations.

· New service app stores. Appconomy, AppDirect, and Jamcracker provide app store

unctionality in dierent orms. Jamcracker provides a large number o the additional

capabilities needed or a cloud broker model.

·Multitenant management and “SaaS-ication.” Apprenda oers a PaaS layer that can

be deployed to create a public or private PaaS, along with provider- and subscriber-portal

unctionality to turn traditional .NE apps into SaaS oerings. Tis will help brokers collect

enough applications or their service app store.13 Virtual Ark oers a combined technology and

outsourcing approach that turns traditional enterprise applications into SaaS oerings, which

will provide important content or a cloud broker’s service app store.

· Billing engines or subscriptions. Aria Systems and Zuora are the two leading billing engines

ocused on cloud-based subscriptions. ComSci goes beyond cloud billing and oers aggregation

o the entire I technology portolio with nance capabilities such as cloud utilization and cost

consolidation as well as traditional opex expenses rom all managed and shared services.

· Private cloud enablement. Cloud.com, Eucalyptus Systems, and the open source OpenStack

Soware initiative are the most important technical approaches to turn private inrastructures

into private clouds, using the same principles and application programming interaces (APIs) as

the major public cloud environments. SpotCloud already oers a simple marketplace approach:

While it “simply” connects available spare capacity in private clouds to external consumers, it

does not automatically execute sourcing decisions based on policies, as a cloud broker with

sophisticated provisioning would.





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· Sophisticated provisioning. Cordys is not only a leading vendor o a PaaS stack but it also

provides a ramework or process-based provisioning o cloud resources; one o the early cloud

broker initiatives used it.

· Application virtualization tools. Fluid Operations is an innovative vendor that helps virtualize

commodity applications, especially traditional SAP systems on general-purpose hypervisors.

· Cloud perormance management. GreenButton and RightScale provide tools to manage

scaled-out applications and predict the perormance and load. As a tool vendor, IBM provides

a wide range o I management soware — especially the IBM Workload Deployer, which

handles the large environments o virtual machines.14

· Virtual private inrastructure management. Microso is both a tool vendor and a provider o

raw cloud inrastructure with Windows Azure. While the Windows Azure platorm applianceis still not on the market, it is promising or cloud-bursting scenarios. It would complement

Microso’s own public cloud Azure operations with virtual private Azure appliances at virtual

private cloud providers. Morphlabs partners with Eucalyptus Systems and Cloud.com to

orchestrate hybrid scenarios between dierent cloud levels. rPath provides very sophisticated

provisioning o virtual images and understands the application context to enable policy-based

autonomous provisioning in dierent cloud levels. UShareSo creates virtual appliances o

virtualized packaged applications similar to rPath, but it ocuses more on ISV/SaaS enablement.

· Cloud security. SaeNet ocuses on cloud security and enables ar more applications to enter

cloud deployment than most enterprises assume — while still complying with local (European)

regulations. Layer 7 echnologies is a well-known security expert or SOA-based integrations;it is now extending its capability in distributed identity management and security to public and

private clouds.

· SaaS providers. As a leading SaaS CRM provider, salesorce.com basically represents many

SaaS providers. Although the solutions exclusively operate in salesorce.com’s own data center, a

cloud broker could oer value by reselling/managing pools o subscriptions or by managing the

orchestration o other cloud solutions.

Cud Ifrastructure Prviders Ptetiay Evve It Eary Cud Brers

It is important to note that, as o today, no cloud broker service is available on the market that wouldmeet the capabilities described in this report. But vendor strategists should ollow very closely the

announcements o the ollowing providers, as we assume that their advanced strategies will evolve

into cloud broker models over the next 12 months:

· Systems integrators with a cloud inrastructure ofering. Capgemini has developed a strong

cloud practice around cloud builder, integrator, and VAR models, which enables it to push

the broker model. CSC has a good understanding o the interoperability o dierent public





13

clouds, and Forrester expects a simple broker service rom it soon. Fujitsu and IBM have a

huge portolio o products as well as their own hosting capabilities, which they could assemble

into broker services soon. IBM maintains several long-term relationships with existing hosting

customers globally; the same applies or Fujitsu. IBM has already technically demonstratedcloud-bursting scenarios but leaves it to the customer to turn these into meaningul business

models. Fujitsu recently showed SaaS enablement services around an emerging PaaS

environment, which would provide critical application content or a broker service.

· Pure inrastructure providers. Colt echnology Services Group (Colt) is a major European

provider o virtual private clouds and showed a lot o innovation potential as one o the early

global VMware vCloud partners. Colt also benets rom trusted client relationships around its

current managed inrastructure services. Equinix provides some o the most global network-

independent data center capacity; it is commonly used by other cloud providers under their

own brands or or their own SaaS oerings. Forrester assumes that Equinix won’t act as acloud broker itsel, but it will be able to oer spare capacity at very attractive spot prices to

uture brokers. Like Colt, Rackspace is a mature provider o virtual private cloud services but

with more o a ocus on North America. Along with a number o other cloud inrastructure

providers, it showed a strong commitment to the open source cloud provider stack OpenStack.

Tis will enable interoperable cloud management across all three cloud layers (private, virtual

private, and public), which is a prerequisite or large-scale cloud-bursting volumes.

· Systems integrators with a telco/network background. -Systems International and Verizon

are the two international players that leverage the synergies o their large cloud provider

capabilities and their own low-latency networks. Both could reassure enterprise SLAs about

the dynamically distributed sourcing concept. Forrester has seen major investments by bothproviders in sophisticated sel-service unctionality around all kinds o cloud services. However,

-Systems International has a bigger ootprint in the hosting o large-scale SAP environments,

which gives it an amazing resource o private spare capacity or ull broker scenarios. Tus,

Forrester expects a more economically attractive broker concept in the next year rom

-Systems International. Similar to Verizon and -Systems International is the Getronics/KPN

joint eort. As Getronics is owned by KPN, the network and inrastructure parts can also legally

be weaved very tightly together with Getronics’ enterprise management services. We consider

the Getronics/KPN strategy to be one o the most sophisticated in the market and among the

rst ull cloud brokers globally.

In addition to I service providers, CIOs o very large corporations could themselves act as cloud

brokers in the uture i they were to overcome the separation o private resources and resources

rom external providers dynamically. However, Forrester assumes that CIOs will wait or the rst

providers to oer broker services to see i the model actually works. Te above-mentioned service

providers have indicated more or less concrete plans or a ull broker model to Forrester, but none o

them oer it as o today. But Forrester assumes that the rst nearly ull cloud broker oering will hit

the market by the end o 2011 or the beginning o 2012.





14

R E C o M M E N D A t i o N S

EMBRACE ThE CloUD BRokER MoDEl To DRIVE SUSTAInABlE GRowTh AnD

MARGInS

the cud brker mde ges ar bend an curren engagemen mdes r avaabe servces

prpsn n he marke da. Raher, descrbes a uure premum-eve servce erng r

sphscaed servces prvders. the u cud brker mde represens he ms ambus and

he ms chaengng a cud cmpung busness mdes. Bu ers servces prvders he

unque pprun vercme he rapd cmmdzan her esng servces busness

and bud a rue servce aggregan parm ha he can everage r a wde range servce

pr eemens. Bu he mve ward a cud brker mde requres sgncan nvesmens

and srng eecuve cmmmen. therere, vendr sraegss shud sar wh wng seps.

· Uderstad yur id f pprtuity. Frreser assumes ha, na, hse it servceprvders ha are aread prvdng cud nrasrucure n a vrua prvae eve w

ener hs mde. Sme cud prvders have aread deveped man he echnca

cmpnens requred r he cud brker busness mde and cud er para brker

servces n her wn he marke aer. Fna, Cios wh have urned her it rganzans

n pr ceners er cmpeve cud servces cud prvde a u brker servce

her nes busness. Sraeg prs a arge r nnvave cud prvders mus capaze n

her pprun bere hese her w grups jump n.

· Buid trust it te rigt buyer staeders. Busness uns mgh bu a smpe cud

brker servce drec nsead usng sac surcng rm a snge cud prvder. Hwever,

he u cud brker mde requres access emprar avaabe capac whn heprvae nrasrucure as we. ths requres a reanshp deep rus beween he cud

brker and it deparmens. on ver advanced Cios wh have managed bud a maure

prvae cud and wan push he envepe even urher w be he rs buers a u

cud brker servce.

· Aticipate te maret mmetum. Frreser assumes ha he rs cud brker erngs

w be avaabe b he end 2011. the rs bes pracces rm arge-scae users hs

emergng busness mde are n epeced bere md-2012. Sraeg pressnas wh

have n sared evauae he s and busness mdes (as such) need d hs as sn

as pssbe cam a sake n hs ung marke segmen.

· Mae ivestmet mey avaiabe. the cud brker mde s he ms cmpe vauecnrbun a he cud cmpung busness mdes. the brker s n n a cud

nrasrucure prvder bu as requres eended cnsung sks cass wrkads

and dene dnamc surcng pces wh he Cio’s fce. Fna, n a he echnca

cmpnens needed assembe u brker uncna are n he marke. thus, an

emergng brker needs devep sme cmpnens n s wn and becme a SaaS

prvder r hese eemens as we.





15

SUPPlEMEnTAl MATERIAl

Cmpaies Itervieed Fr Tis Dcumet

6usion USA

Akamai echnologies

Appconomy

AppDirect

Apprenda

Aria Systems

Capgemini

Cloud.com

CloudSwitch

Colt echnology Services Group

Computer Sciences Corporation (CSC)

ComSci

Cordys

Equinix

fuid Operations

Fujitsu

Getronics/KPN

GreenButton

IBM

Jamcracker

Layer 7 echnologies

Microso

Morphlabs

Rackspace

RightScale

rPath

SaeNet

salesorce.com

-Systems International

UShareSo

Verizon

Virtual Ark

VMware

Zuora

EnDnoTES

1 Forrester’s taxonomy o cloud computing markets provides vendors and customers with clear denitions

and labels or cloud capabilities. With this taxonomy in hand, vendor strategists can position their oerings

in the overall cloud market and better articulate their business value propositions to customers. See the July

6, 2010, “Te Evolution O Cloud Computing Markets” report.

2 Based on Forrester’s previously published cloud market taxonomy, Forrester provided orecasts and

inormation on 12 distinct market segments o cloud computing or the 10 years rom 2010 to 2020. Note

that, in this report, we orecast shis in the usage patterns o inrastructure, platorm soware, and business

applications. Readers should ully understand the denitions o each segment listed and the expected

patterns o change to draw the proper conclusions rom this orecast. See the April 21, 2011, “Sizing Te

Cloud” report.











16

3 Moore’s law describes a long-term trend in the history o price/perormance or computing hardware.

Named aer Intel co-ounder Gordon E. Moore, who described the trend in a 1965 paper, Moore’s law

predicts that the price or computing hardware will decrease every 18 months by 50% while, at the same

time, the computing hardware will improve in perormance by 100%.

4 For details about Force.com and Google App Engine with VMware, please read Stean Ried, “VMware’s

Cloud Portability Promise Powered By Google,” Stefan Ried’s Blog For Vendor Strategy Professionals, May 20,

2010 (http://blogs.orrester.com/stean_ried/10-05-20-vmware%E2%80%99s_cloud_portability_promise_

powered_google).

5 raditionally, value contributions in the tech industry can be grouped into packages: business apps,

middleware and database soware, and hardware and inormation and communication technology

(IC) services. Te traditional hardware vendors are not explicitly shown here, as their model does not

signicantly change with the cloud. Te emerging disruption to the hardware market is the buying pattern,

which will shi in the long term rom corporate enterprises toward cloud providers or a major portion o

their hardware revenues.

6 A cloud builder approach obviously does not work with public cloud providers, as they consider these skills

to be their own core competence and will not hire consultants.

7 Cloud-based integration (CBI) pertains to the provisioning o a standardized middleware platorm in the

cloud that can be used or various cloud integration scenarios (e.g., the integration o legacy applications

into the cloud or the integration o dierent cloud-based applications into one cloud application). See the

April 21, 2011, “Sizing Te Cloud” report.

8 Cast Iron’s OmniConnect cloud integration platorm, launched in March 2010, is designed specically

to integrate public and private cloud services with on-premises applications, such as Lawson, Microso,

Oracle, and SAP. Cloud platorm partnerships include Amazon EC2 and Force.com, and SaaS partners

include NetSuite, RightNow, and salesorce.com.

9 An example o a cloud VAR relationship is Capgemini, which sold Google Apps Premier Edition

subscriptions to Valeo, a European automotive manuacturer. Te reseller deal was combined with cloud

integration services, such as the migration o existing Microso Oce documents to Google Docs, as well

as unied identity management and single sign-on.

10 For example, our recent soware survey showed that soware decision-makers want more fexibility, including

the ability to choose dierent deployment options — such as on-premises versus cloud services — and new

business models, such as subscription-based licensing. Source: Forrsights Soware Survey, Q4 2010.

11

For more details on cloud bursting, please read Stean Ried, “Cloud Bursting Stimulates New CloudBusiness Models,” Stefan Ried’s Blog For Vendor Strategy Professionals, August 8, 2011 (http://blogs.orrester.

com/stean_ried/11-08-08-cloud_bursting_stimulates_new_cloud_business_models).

12 For an introduction to the initial concept o a SaaS broker, see the February 11, 2011, “Cloud Orchestration

Models” report.











17

13 For an introduction to provider and subscriber portals, see the February 20, 2009, “Forrester’s Platorm-As-

A-Service Reerence Architecture” report.

14 Pixar’s Renderman, powered by GreenButton on Azure, oers a cloud rendering service or digital media

studios and allows users to predict the calculation o duration and price depending on a job’s priority.

Te IBM Workload Deployer was, in its previous version, available under the name o WebSphere

CloudBurst Appliance.







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