B2B business used to be about selling phone book listings, newspaper ads, financial advice, legal advice, etc. However, the emergence of cloud-based software has unlocked limitless possibilities within the B2B landscape.
With cloud solutions, businesses no longer need their trusted Yellow Pages rep, and maybe not even their financial advisor, because they can find everything they need in a software solution. Or at least, that’s what these businesses thought.
What they've found is that there are too many solutions on the market, and there’s too little time in a day to manage the 20+ solutions they need…
Introducing the beginning of the cloud service broker era.
What is a Cloud Service Broker?
In lieu of the broker terminology, I think an analogy is necessary. Much like a stock broker acts as an intermediary between buyers and sellers, a cloud service broker essentially acts as an intermediary between cloud solution sellers and cloud solution purchasers. This term is effectively synonymous with that of the standard “cloud broker”.
The business model looks like this:
You might be wondering what the purpose of the cloud service broker is in acting as a middle man when the end business purchaser could go direct to the cloud solution providers. The purpose is simple—end consumers want a consolidated and cohesive experience. They want one partner that can meet all of their solution needs, give them single sign-in, give them communication between apps, and become their single source of truth.
This is happening because most small to medium sized businesses don’t have a VP of Digital Transformation, and they certainly don’t have a team to manage and use 21 different cloud solutions just so they can get through the day. They simply don’t have time.
According to a survey conducted by Vistaprint, 72% of small to medium sized business owners stated that administrative tasks were the biggest drain on their productivity, and their time. They are acting as CEO, but they’re often times managing other tasks like payroll, scheduling, social media marketing, and then managing payments to all of these solution providers, as well as their internet service providers, phone service providers, cable service providers, etc. They’re overwhelmed and they need your help.
Who are Cloud Service Brokers?
Any B2B organization has an equal opportunity to become a cloud service broker. If you have a selling relationship with other businesses, then you are positioned to become a cloud broker, all you have to do is either develop or resell cloud solutions to clients that already trust you.
Comporium Media Services is an example of a telecommunications company that has transcended their industry boundaries and successfully penetrated the traditional media and marketing industries. They were born into the phone space. Then they adopted TV, then internet, and today they have further added security solutions, digital signage, cloud based storage, and a large suite of cloud based digital marketing products to their offering.
Comporium has become a cloud service broker. Now, they are stealing business from security providers, cable companies, newspaper companies, marketing agencies, etc—all the while, building stronger and stickier relationships with their clients. They are winning the B2B race to the cloud.
What is a Cloud Services Brokerage?
To further our stock broker analogy, a stock brokerage would be the company that enables a stock broker to do business; much like a cloud services brokerage is a company that provides cloud service brokers with the tools and solutions they need to best serve their B2B clientele.
The brokerage model looks like this:
The next question is then: why would a cloud service broker want to partner with a brokerage when they could solicit direct partnerships with the cloud solution providers, or even develop their own solutions in-house? The answer again lies in simplicity and consolidation.
According to Thumbtack, development cost of a simple customer-facing web application will likely range from $80,000 to $150,000. Furthermore, with many cloud solutions (such as G Suite) it can take months just to apply to become a certified reseller, and further months to perform platform integrations. A cloud brokerage can offer you hundreds of the best-in-class cloud solutions with zero development and integration costs.
Who is a Cloud Services Brokerage?
Vendasta is a pure tech company that acts as a cloud services brokerage for other B2B organizations all around the world. By soliciting partnerships and integrations with major cloud players such as Microsoft, Google, GoDaddy, Yext, and dozens more, Vendasta is able to give it’s partners instant selling capabilities across a breadth of cloud solutions—in one comprehensive cloud broker platform.
This is beneficial for cloud service brokers that work with Vendasta because they can mitigate the toil and costs associated with trying to build relationships with all of these solutions themselves.
How to Become a Cloud Service Broker
There are a number of paths to the promised land, but some are better than others.
As hinted above, cloud service brokers do not have to work with a cloud services brokerage. Other options for B2B organizations include in-house development of cloud solutions, or soliciting solution integrations with individual cloud solutions such as G Suite, GoDaddy, Constant Contact, etc. However, both of these alternatives are ripe with disadvantages.
Issues with building solutions:
- Delayed time to market
- High incurred costs
- Work outside of core competencies
- Lengthy payback period
- Extended implementation time
Issues with vendor integrations:
- No unified login or central reporting for clients
- Possible vendor clutter and fragmentation
- Loss of brand recognition
- Extended implementation time
The final option is to leverage the support of a cloud services brokerage.
A brokerage is beneficial because of:
- Single sign-in capabilities for your clients
- “Instant-on” functionality drives speed to market
- Integrated billing and reporting
- Potential “cloud broker services” team to fulfill on new workload
- A single partner for all your needs so that you can become the single provider for all of your clients’ needs.
The reality is simple. The competitive landscape of B2B is changing and industry boundaries are becoming blurred. Telecommunications companies and banks are selling marketing solutions. Marketing companies are selling financial software. The decades to come will be ruled by the company that does it all; the cloud broker.