Are We All Cloud Service Brokers Now?

By John Dixon, Consulting Architect


Robin Meehan of Smart421 recently wrote a couple of great posts on cloud service brokers (CSBs) and the role that they play for consumers of cloud services. ( and I’m going to write two blogs about the topic. The first will be a background on my views and interpretations around cloud service brokers. In the second post, I will break down some of Robin’s points and explain why I agree or disagree.

Essentially, a cloud broker offers consumers three key things that a single cloud provider does not (these are from the NIST definition of a Cloud Service Broker):

  • Intermediation
  • Aggregation
  • Arbitrage (run-time, deployment-time, plan-time)

My interpretation of these is as follows. We’ll use Amazon Web Services as the example IaaS cloud provider and GreenPages as the example of the cloud broker:

Intermediation. As a cloud broker, GreenPages, sits between you, the consumer, and AWS. GreenPages and other CSBs do this so they can add value to the core AWS offering. Why? Billing and chargeback is a great example. A bill from AWS includes line item charges for EC2, S3, and whichever other services you used during the past month – so you would be able to see that EC2 charges for January were $12,502.90 in total. GreenPages takes this bill and processes it so that you would be able to get more granular information about your spend in January. We would be able to show you:

  • Spend per application
  • Spend per environment (development, test, production)
  • Spend per tier (web, application, database)
  • Spend per resource (CPU, memory, storage, managed services)
  • Compare January 2014 to December, or even January 2013
  • Estimate the spend for February 2014

So, going directly to AWS, you’d be able to answer a question like, “how much did I spend in total for compute in January?”

And, going through GreenPages as a cloud broker, you’d be able to answer a question like, “how much did the development environment for Application X cost in January, and how does that compare with the spend in December?”

I think you’d agree that it is easier to wrap governance around the spend information from a cloud service broker rather than directly from AWS. This is just one of the advantages of using a CSB in front of a cloud provider – even if you’re like many customers out there and choose to use only one provider.

Aggregation. As a CSB, GreenPages aggregates the offerings from many providers and provides a simple interface to provision resources to any of them. Whether you choose AWS, Terremark, Savvis, or even your internal vSphere environment, you’d use the same procedure to provision resources. On the provider side, CSBs also aggregate demand from consumers and are able to negotiate rates. Why is this important? A CSB can add value in three ways here:

1) By allowing you to compare the offerings of different providers – in terms of pricing, SLA guarantees, service credits, supported configurations, etc.

2) By placing a consistent approval framework in front of requests to any provider.

3) By using aggregated demand to negotiate special pricing and terms with providers – terms that may not be available to an individual consumer of cloud services

The approval framework is of course optional – if you wish, you could choose to allow any user to provision infrastructure to any provider. Either way, a CSB can establish a request management framework in front of “the cloud” and can, in turn, provide things like an audit trail of requests and approvals. Perhaps you want to raise an ITIL-style change whenever a cloud request is fulfilled? A CSB can integrate with existing systems like Remedy or ServiceNow for that.

Arbitrage. Robin Meehan has a follow-on post that alludes to cloud arbitrage and workload migration. Cloud arbitrage is somewhat science fiction at this time, but let’s look forward to the not-too-distant future.

First, what is arbitrage and cloud arbitrage? NIST says it is an environment where the flexibility to CSB has the flexibility to choose, on the customer’s behalf, where to best run the customer’s workload. In theory, the CSB would always be on the lookout for a beneficial arrangement, automatically migrate the workload, and likely capture the financial benefit of doing so. This is a little bit like currency arbitrage, where a financial institution is looking for discrepancies in the market for various currencies, and makes various transactions to come up with a beneficial situation. If you’ve ever seen the late-night infomercials for, don’t believe the easy money hype. You need vast sums of money and perfect market information (e.g., you’re pretty much a bank) to play in that game.

So, cloud arbitrage and “just plain currency arbitrage” are really only similar when it comes to identifying a good idea. This is where we break it down cloud arbitrage into three areas:

  • Run-time arbitrage
  • Deployment-time arbitrage
  • Plan-time arbitrage

In my next post, I will break down cloud arbitrage as well as go over some specific points Robin makes in his posts and offer my opinions on them.


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