Cloud brokerage: The cloud service brokerage market in 2023By Brock Andony
The B2B space used to be characterized by selling phone book listings, traditional media ads, financial advice, and legal advice. However, the emergence of cloud-based software has unlocked limitless possibilities within the B2B landscape, creating a new B2B function: cloud brokerage.
Launch a revenue-generating cloud marketplace in minutes, not years: Get a demo to start selling more products today.
The emergence of cloud solutions has given small and medium-sized businesses (SMBs) unprecedented tools to take control of their business, gather valuable actionable data, and market to their customers. As more DIY SaaS solutions became available, businesses no longer needed their trusted Yellow Pages rep or even their financial adviser. There was seemingly a software solution for everything.
Or at least, that’s what business owners thought.
What SMBs have discovered in practice 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…
That brings us to the emergence of the cloud services brokerage era. In this article, we’ll dive into everything you need to know about the cloud services brokerage market in 2023, including how you can position your agency to deliver cloud broker services in the year ahead.
Table of Contents
- What is a cloud service broker?
- How Do Cloud Brokerage Platforms Work?
- Cloud service discovery and selection
- Cloud contract negotiation and management
- Cloud vendor and service management
- Cloud migration services
- Cloud security and compliance management
- Cloud cost optimization and management
- Cloud application integration and management
- Cloud financial management and billing services
- How to Become a Cloud Service Broker
- Next Steps
What is a cloud service broker?
So, what is a cloud broker, exactly? What role do they play in the cloud-based software era?
You can think of a cloud broker as fulfilling a function similar to that of a stockbroker. Just as a stockbroker acts as an intermediary between buyers and sellers, a cloud broker essentially acts as an intermediary between cloud solution sellers and cloud solution purchasers. A stockbroker understands the market and identifies the best opportunities to meet their client’s goals. Similarly, a cloud broker identifies the best cloud solutions on the market, puts them together in a solutions package that is favorable for the client, and helps to manage their portfolio of solutions.
You might be wondering what the value a cloud service broker is in acting as a middleman when the end business purchaser could just go direct to the cloud solution providers. After all, a large part of the appeal of B2B software solutions is that they give businesses the ability to directly control many important aspects of their business.
The purpose of using a cloud brokerage service is simple—end consumers want a consolidated and cohesive experience. They want one partner that can meet all of their solution needs, give them a single login, ensure integration and communication between apps, and become their single source of truth.
Managing a couple of software solutions may be manageable in-house for an SMB. But handling an entire suite of solutions that each require daily attention has proven to be a demanding full-time job on its own. The need for cloud brokerage services is emerging 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 the time or resources to use their cloud solutions effectively.
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 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, and more.
They’re overwhelmed and they need your help.
Cloud brokerage example
Any B2B organization has the opportunity to offer cloud broker services. 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.
Many forward-thinking agencies have entered the cloud service brokerage market already.
Comporium Media Services is an example of a telecommunications company that has transcended its industry boundaries and successfully penetrated the traditional media and marketing industries. They got their start into the phone space. Then they adopted TV, then the internet, and today they have further added security solutions, digital signage, cloud-based storage, and an extensive 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, and more—all the while, building stronger and stickier relationships with their clients. They are winning the B2B race to the cloud.
How do cloud brokerage platforms work?
Let’s go back to our stock broker analogy for a moment. A stockbroker generally works for a stock brokerage, a company that enables the stock broker to do business. Similarly, a cloud brokerage platform is a company that provides cloud service brokers the tools and solutions they need to best serve their B2B clientele.
You might wonder why would a cloud service broker want to partner with a brokerage in the first place. Can’t they just directly solicit partnerships with a variety of cloud solution providers, or even develop their solutions in-house? The answer lies in simplicity and consolidation.
According to Thumbtack, the 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 platform can offer you hundreds of the best-in-class cloud solutions with zero development and integration costs. Once your agency is signed up, you can resell any of the solutions on the platform either individually or in bundles.
Since all solutions all purchased through the same platform, agencies can support clients by:
- Offering a single log-in and dashboard to access their cloud solutions
- Creating bundles of solutions that meet a wide range of client needs
- Bundling all cloud solutions payments into one
8 Types of cloud broker services
A cloud services brokerage can deliver a variety of services. You can offer all of these or a combination that makes sense for your business’s goals and capabilities.
1. Cloud service discovery and selection
Cloud service discovery and selection includes identifying an SMB’s priorities and needs, conducting research to see which cloud services are best able to meet those needs, and choosing the best ones for each client. Clients might already be using a range of solutions, or they may want to build their solutions from scratch. In either case, the role of a cloud broker is to audit their needs and current way of managing them and to identify the best cloud services to optimize their daily operations.
2. Cloud contract negotiation and management
A cloud brokerage is in a better position to negotiate contracts than a business doing so directly. This is especially true for SMBs since they don’t have the purchasing power of their big business counterparts. Through a cloud brokerage platform, agencies can access favorable wholesale pricing, giving their SMB clients access to better contracts than they might be able to get on their own.
This cloud brokerage service also includes the management of contracts over time, such as handling renewals.
3. Cloud vendor and service management
Cloud brokerages deal with vendors and manage services directly, taking this off of the SMB client’s plate. Instead of having to deal with dozens of vendors, businesses can deal with a single touchpoint: their cloud services brokerage.
4. Cloud migration services
It’s very common for SMBs to be using a patchwork of solutions already when they seek out cloud broker services. A cloud broker can help them migrate everything safely and reliably to the cloud. This makes it easier for all team members to access tools and information regardless of where they are.
5. Cloud security and compliance management
An important priority for businesses is ensuring that they are compliant with regulations, particularly as they pertain to the protection of sensitive data, such as client data. A cloud brokerage can implement a system to ensure security and compliance.
6. Cloud cost optimization and management
A major pain point for SMBs is the management of their cloud costs. Having a jumble of solutions makes it difficult to optimize costs and make sure they are getting value for their money.
7. Cloud application integration and management
Agencies using a cloud brokerage platform can ensure that all solutions integrate properly with one another. Since clients can access them all from a single dashboard, managing their use is much easier.
8. Cloud financial management and billing services
A cloud brokerage service can client cloud costs into a single payment, giving them access to optimal pricing and transparency. Clients can discuss billing questions with one touchpoint, rather than dozens. This saves time and helps them feel more in control of their financial management and billing.
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 best option is to leverage the support of a cloud services brokerage.
A brokerage is beneficial because of:
- Single login 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 requirements so that you can become the single provider for all of your clients’ needs.
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 its 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.
Agencies can create truly personalized cloud solutions for their clients by accessing hundreds of products on demand, including white-label products that help build their agency brand. Scaling also becomes a breeze when using a cloud brokerage platform like Vendasta.
Why? Because there’s no need to make major investments in in-house staff or development to offer clients more. Agencies can focus on selling and managing their clients’ cloud services since they only pay when they get the sale. Rather than having to go through the costly and difficult process of growing a team to deliver services and manage a growing portfolio of software solutions, agencies can rely on white-label experts to do the heavy lifting behind the scenes.
The bottom line: if you want to become a cloud service broker, using a platform built for the job is the way to go.
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. Clients are overwhelmed with options, leading to overwhelm and decision fatigue. The decades to come will be ruled by the company that does it all; the cloud broker.