Clouds forming for Services Brokerage

In last week’s blog, we looked at the term “Service Broker” for the communications industry.  Two contexts were highlighted: 1) the network service broker, and 2) services brokerage business models.  Today, we examine the same term in an emerging context of cloud computing.  Similar to the defined network service broker, the cloud service broker is beginning to take an early form.

In Gartner’s recent press release and report last month, Gartner identified three forms of cloud service brokers. 
- Intermediation
- Aggregation
- Arbitrage

These forms map to similar business model examples that communications service providers (CSPs) face for services brokerage (we headlined last week).  The aggregation angle for more product offerings was expected, as cloud computing services are a natural product to buy alongside communications products. 

However, Gartner points out some interesting additional things to me.   First, they go beyond business models to talk about specific intermediary management capabilities of a service broker component in a provider’s architecture.  They name pricing, identity, access, and billing capabilities as examples.

Second, Gartner introduces the services brokerage role of arbitrage, which is something most communications service providers have yet to widely do at any dynamic scale.  Arbitrage is similar to the exchange models or roles I headlined last week, but is different.  Arbitrage works on dynamically buying low and selling high as pricing differences arise for the same things, whereas exchanges take a share of a transaction fee or revenue between two parties.  For either exchange or arbitrage roles to work well, a standard taxonomy for cloud services product and feature definitions are needed in a federated catalog.

In any case, these types of cloud service brokers will bring important patterns of functional and operational capabilities for CSPs and suppliers to monitor and assess directional impacts.  We already see signs they are impacting solution patterns for new communication services.  These patterns include both enablement and the management fabric across the product and service lifecycle.  In the TM Forum’s collaboration work on enabling new communication services, we are already seeing strong synergies between cloud and communications services like enablers.   These impacts arise from cloud’s Platform as a Service (PaaS) model and its need for new management paradigms (and standards!) for many mashed up application services that software apps depend on from the cloud.  These web-based communications services include open APIs to functional network and OSS/BSS capabilities, but much more as well.

Another useful reading resource about cloud services in the communications industry is our recent TM Forum Quick Insights Research publication, available for TM Forum members at no cost.