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This week I am going to be speaking here in Toronto at a health-focused cloud meetup on the topic of cloud brokerage.  As an early advocate for cloud brokerage, I’ve always recommended organizations to look at this type of model as an alternative to purchasing cloud services directly from service providers.  So what is cloud brokerage and why should you revisit this type of service model?

There are really 3 types of cloud broker models:  Cloud Exchanges, Cloud Technical Brokers and Cloud Business Brokers.  I’ll be covering the latter 2 later this week, so let’s get started with Cloud Exchanges.

So what is a Cloud Exchange?  Simply put, this type of entity exists to match buyers with providers based on requirements.  Much like any other type of exchange company (such as stock), these guys talk to customers and figure out what kind of provider and service is a best fit for their goals.

Let’s walk through a Cloud Exchange model.  First, the customer approaches the Cloud Exchange with a list of requirements.  This could be anything from IaaS, storage, Saas to services such as hosted or managed security and disaster recovery.  The Cloud exchange then works with its provider base (which could include Cloud providers such as Amazon or Microsoft, Telcos, SaaS providers like SalesForce, you get the idea) and puts together a recommended solution for the customer.

The real benefit here as you probably noticed is that by leveraging a Cloud Exchange, the hassles of figuring out which services are the right ones for your project get offloaded to the Exchange Broker itself.  Throw in some SLAs around interoperability and privacy, and this type of model can save significant work researching and negotiating pricing.

So who would benefit most from this type of model?  Honestly, any organization who is looking to piece together parts of their cloud strategy is a potential candidate for this type of service.  This is especially true when the customer needs certain services, but not an overall strategy, such as adding additional functionality such as cloud storage into your environment.  You might have all kinds of other internal services, so plugging in a few additional services might be a better bet than converting all services to a single provider.  This works especially well when you want multiple services with specific requirements, since the responsibility to match these requirements is now happily offloaded to the Exchange Broker and the end Service Providers.

I’m going to cover the next model, Cloud Technical Broker in my next post.

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