Management Magazine

Of cloud computing and digital transformation

Cloud service brokerage business model is still nascent ‘and may take a little more time to mature, especially in the developing economies where adoption of cloud services itself is yet to catch cachet.


Most of the critical issues organisations are grappling with today can be traced to the disruptions spawned by digital technologies ‘and how companies can align to the digital futures. No sector is immune to the effects of digital transformation.

For an organisation to sail through the tempests of any digital transformation, it must formulate ‘and implement a digital strategy. A major one that enterprises are harnessing for competiveness these days is cloud computing which as an innovation, applies the utility model in the acquisition ‘and consumption of computing resources. The question is no longer whether enterprises need to adopt cloud computing- this tipping point has passed, but how to manage it effectively.  According to Gartner Research, the worldwide public cloud services were projected to grow exponentially by the end of 2016. Locally, a study by World Wide Worx ‘and Cisco in 2013 indicated that 48 per cent of medium ‘and large businesses in Kenya are using cloud-computing services.

Challenges of migrating to the cloud

Although cloud computing enables organisations to accrue benefits especially in terms of cost savings, agility ‘and innovation, actual adoption has lagged behind the hype.  This has been attributed to not only real ‘and perceived dangers of adopting cloud computing but also to challenges of migrating to a cloud platform.

While security has been cited in the past as the main challenge in the adoption of cloud services, a 2016 report by Rightscale, a cloud management provider, shows that lack of resources ‘and expertise is now the top most challenge faced by organisations in their endeavour to adopt cloud computing.

As the number of cloud service providers grow ‘and the requirements of cloud service consumers become more complex, the process of evaluation ‘and selection of desired cloud services become a cumbersome task that needs specialised skills ‘and tools. This creates the need for cloud service consumer guidance ‘and intermediation during service selection, deployment, consumption ‘and even termination. A cloud service broker can provide this guidance ‘and intermediation.

According to Gartner, Cloud service brokerage is a business model where a business acts on behalf of consumers of one or more cloud services to intermediate ‘and add value to the service being consumed. There are several roles a cloud service broker can play to add value to a client’s cloud services experience.

The cloud service broker can act as a provider of cloud consultancy services.  The cloud broker can use its experience to analyse its clients’ business models in order to underst ‘and ‘and recommend suitable cloud offerings. Once the client has implemented desired cloud services, the broker can still provide end-user support services.

The cloud service provider can also add value to its consultancy services by providing a portal or a platform through which clients can identify various cloud services ‘and service providers. In highly regulated industries like healthcare ‘and financial services, the cloud service broker also ensures, on behalf of the customer that the provider treats data in accordance with regulation ‘and policies ‘and that security practices are followed. We can say here that the broker provides governance services.

The best model of brokerage

Sometimes, it can be the case that a consumer requires cloud services offered by different cloud service providers. The consumer may decide to deal directly with each provider ‘and pay bills separately. In this case, an alternative is for the consumer to deal with a cloud service broker who can aggregate cloud services from different providers ‘and funnel it to the consumer as a single product billed as a unit. In this model of brokerage, the broker can even build a proprietary software layer that provides identity management for the customers. The arrangement also makes it possible for the customers to get competitive pricing since the broker comm ‘ands a stronger bargaining power compared to a single consumer. Additionally, the broker also shoulders the burden of negotiating service level agreements on behalf of the end user.

Aggregating cloud services from different providers creates the challenge of integration. A cloud service broker should not therefore just be able to provide a marketplace of different services, but should also be able to integrate the services in a seamless ‘and transparent manner. The broker will most of the times create its own proprietary software platform to perform the orchestration of the different cloud services under the hood of a single user interface. The customer can also engage the broker to offer security services, business continuity services ‘and anything in between the customer ‘and the aggregated cloud services.  Integration therefore makes independent services work together as a single offering.

The last type of service a cloud consumer can get from a broker is customisation. The requirements of a customer ‘and the capabilities provided by a cloud service should dovetail. But this is rarely the case since cloud services are mostly generic. A cloud service broker can therefore act as a customiser by creating extensions to existing cloud services to perform a specific function required by a client. The cloud service needs for most businesses, especially start-ups ‘and small ‘and medium businesses may only be delivered successfully through customisation of existing cloud services.

Evolution of cloud service brokerage

The ever changing nature of cloud computing implies that cloud service brokerage model will still undergo metamorphosis. It is envisaged that cloud services consumers will come to depend more ‘and more on cloud brokers to simplify the relationship between them ‘and a cloud provider. Cloud services consumers should, therefore, be aware that the roles of cloud brokers would continue to evolve. IT managers working with the cloud brokers in the roles mentioned here should use the brokers’ knowledge ‘and expertise to ensure the cloud services acquired support the mission of the organisation. The managers should also ensure their employees recognize ‘and appreciate the value of cloud services.

Finally, IT executives should note that cloud service brokerage business model is still nascent ‘and may take a little more time to mature, especially in the developing economies where adoption of cloud services itself is yet to catch cachet.


Dr. John Otieno Oredo is a lecturer ‘and researcher in digital business strategies ‘and holds a PhD in Strategic Information Systems.

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