Written by Glenn Weinstein
The Internet has removed the middleman in many ways. It’s a natural tool for disintermediation, allowing passengers to book their own plane tickets, readers to create their own clipping services or candidates to find their own job openings. But just as public cloud computing has brought the power of the Internet to large businesses, it has also created the need for a new type of middleman - what Gartner has called a cloud services brokerage.
Consumers and businesses have different needs. I don’t have much use for a personal shopper, but every large company has a purchasing department. Most have travel departments, or a relationship with a travel broker. Once a company reaches a certain scale, the benefits of having an expert mediate on its behalf becomes compelling. The entire consulting industry is based, in part, on this premise.
Mediators in the information technology field, sadly, have garnered a less-than-ideal reputation during the previous era of “on premise” computing. Such systems can be overwhelmingly complex, which puts great power in the hands of those who can understand and tame them. If you think booking your own business travel is complicated, try implementing SAP by yourself. But over time, this power has corrupted the global systems integrators who hold the keys to the kingdom. The temptation to increase profit margins by encouraging complexity and imposing costly upgrade cycles has proven irresistible to both integrators and on-premise software vendors.
It’s time for a new kind of middleman.
Enterprise customers who have made the transition from on-premise (or hosted) to public cloud-based solutions still need to out-innovate their competition, make employees more efficient, improve customer service and control costs. But the role of the system integrator has changed fundamentally, because the technology has changed fundamentally. It’s folly to do “business as usual,” as an integrator, when there are no longer any servers to size, procure and manage, and no disruptive upgrade cycles to plan for. With features like mobile access, internationalization, network content delivery and social enablement, teams are able to add new members and build apps much faster.
In the public cloud-based model, three-year waterfall implementation plans have given way to three-month iterative plans. Experts are now valued not for their ability to select and install the right servers and storage devices, but instead for their knowledge and ability to navigate the cloud vendor ecosystem. Core skills expected from service management providers are less about systems monitoring, and more about what it takes to keep applications running efficiently on cloud platforms.
To put it bluntly, succeeding as a mediator in the cloud era requires a different kind of DNA. That said, most companies are unable, fundamentally, to change their DNA. Cloud DNA impacts every aspect of a service provider’s organization and culture, from what the CEO says is important, to what the COO focuses on, to the hiring profile and referral-based recruiting that builds the workforce, to the CIO’s selection of their own customer-facing systems. It’s not realistic to expect the dinosaurs from the last era of computing to be capable of making such a dramatic change to their core identities. Corporate cultures tend to be self-reinforcing and resistant to change. Eventually their bad habits will emerge, at great cost to customers who entrusted them to have a forward-looking technology vision.
Gartner has said that cloud service brokerages now represent the biggest revenue opportunity in cloud computing. As any software salesperson could tell you, ultimately it’s not about features and functions, it’s about changing how you do business. Cloud brokerages are already building the customer relationships that will make them trusted partners for the duration of the public cloud era.
How’s that for industry disruption? I am seeing it unfold in the technology industry at an unparalleled rate, as large enterprises shut off, or at least slow down, the spigot of cloud-based projects to their traditional system integrator partners. “Sure,” they say, “you can keep managing our legacy systems; but we don’t want your bloated ways to infect the enthusiasm and agility with which we’re approaching our new cloud-based initiatives.”
The future belongs to the new cloud middleman.
Glenn Weinstein is CTO for Appirio, a consulting firm focused on cloud computing.
