Market Analysis and Statistics G00218960

The Role of CSB in the Cloud Services Value Chain

Published: 4 October 2011 Analyst(s): Benoit J. Lheureux, Daryl C. Plummer, Tiffani Bova, Timothy Weaver, Michele Cantara, Linda R. Cohen, Robert H. Brown

Cloud services brokerage (CSB) is a form of intermediation for IT and business projects that are cloud-centric. The role has emerged as end users seek help managing the consumption of cloud computing. More and more IT external service providers are in the process of adopting the CSB role to enrich traditional IT service capabilities and to build differentiation into their value proposition as part of their cloud services value chain (CSVC) strategy. This research gives traditional IT services providers clear guidance on which IT service roles cloud computing affects most.

Key Findings

Cloud computing will drive providers to substantially evolve their traditional IT service capabilities, and will lead to new types of IT service offerings in the CSVC. CSB is a new role that many providers in the CSVC will adopt to evolve and differentiate IT services. Key CSB roles that are necessary to successfully implement IT services within the CSVC framework include aggregation, integration and customization. Traditional IT services providers may or may not decide to invest in building out CSB roles. However, as cloud adoption continues to gain traction, doing so will become more of a requirement than an option.

Recommendations
Providers should:

Adopt the CSB role to enrich traditional IT service capabilities and expand into new markets. Use the CSB role to differentiate IT service offerings and capabilities.

Use the relevancy assessment in this research to help define the appropriate level of investment required for various CSB roles in your particular category of IT services.

Table of Contents
Analysis..................................................................................................................................................3 CSB as a Role in the CSVC..............................................................................................................3 The Key Trends Driving Change in This Space..................................................................................6 Buyers Want More Help With Adopting Cloud Computing..........................................................6 What We Expect Will Happen in the Future.......................................................................................9 Examples of Providers Adopting the CSB Role in the CSVC...........................................................10 Appirio......................................................................................................................................11 Besol Soluciones......................................................................................................................12 CommonIT...............................................................................................................................13 CSC.........................................................................................................................................13 Dell...........................................................................................................................................14 eBuilder....................................................................................................................................14 BlinkHR by ExpertMarkets........................................................................................................15 Hubspan..................................................................................................................................16 Ingram Micro............................................................................................................................16 Jamcracker..............................................................................................................................17 Liaison Technologies................................................................................................................18 LTech.......................................................................................................................................18 Oxygen.....................................................................................................................................19 StrikeIron..................................................................................................................................19 Synnex.....................................................................................................................................20 TCS..........................................................................................................................................21 What You Need to Know................................................................................................................22 Advice to Providers.........................................................................................................................22 Recommended Reading.......................................................................................................................22

List of Figures
Figure 1. Degree of Importance for CSB Roles Across Various CSVC Service Categories.......................5 Figure 2. Proliferation of Examples of IT Services Providers Adopting the CSB Role...............................7

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Analysis
This research explores a key touchpoint between the IT services and cloud services market segments. In particular, it looks at the ways in which service providers will use cloud computing often in the form of the CSB role (see Note 1) to modernize and enhance IT service offerings (see Note 2).

CSB as a Role in the CSVC

CSB is a role in which a company or other entity adds value to one or more (generally public or hybrid, but possibly private) cloud services on behalf of one or more consumers of those services. While cloud-enabled technology services are a prominent aspect of the cloud services supplied by a CSB, a CSB offering will also often include some combination of people and labor (see "A Logical Reference Model for Cloud Services Brokerage"). Most CSB capabilities fall under three primary roles:

Aggregation Bringing multiple cloud services together to serve them to service consumers in some unified way for example, by business process, industry or region. Aggregation is one of the most common CSB roles, and includes capabilities such as:

Provisioning (search, product/service catalog, pricing, procurement, etc.) Management (operations, security, support, etc.) Financing (credit and billing)

Integration Addressing all combinations of cloud, e-commerce, and on-premises data and application integration requirements. Integration is almost always a CSB requirement, but skill levels vary widely across different providers. Capabilities include:

Application integration (messaging, adapters, translation, data synchronization, process modeling, workflow, etc.) Technology integration (infrastructure as a service [IaaS], platform as a service [PaaS], software as a service [SaaS], management, security, etc.) Governance (risk mitigation, registry, SLAs/policies, compliance, and data and process monitoring)

Customization Implementing unique services or capabilities beyond the original cloud services capabilities, preferably to multiple consumers, such as tools to manage and simplify the provisioning of cloud services to many users. While frequently available, customization features vary widely, although more-common capabilities include:

Modification (service refinement, service refactoring, etc.) Implementation (enriched or new services, applications, processes, rules, user interfaces, master data, etc.)

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Analytics (messages, services, processes, etc.)

Aggregation, integration and customization are roles that IT providers have adopted in IT services for years; however, these roles are evolving into CSB roles to accommodate cloud computing. For example, the provisioning, integration and customization of SaaS is a new CSB discipline that adds to the traditional discipline of provisioning, integration or customization of commercial off-the-shelf (COTS) software. Some capabilities (for example, provisioning and enrichment) are distinctively associated with one CSB role, while other capabilities (for example, governance and analytics) may be delivered in association with multiple roles, even if they tend to be delivered more often in one CSB role. CSB roles help new providers develop IT service offerings based on the CSVC. They also help established providers add CSB capabilities to traditional IT service offerings. This particular list of CSB capabilities isn't exclusive or exhaustive, but it emphasizes some of the more important ways in which providers must apply the CSB role to successfully act as an intermediary between providers of base cloud services, such as IaaS, PaaS, SaaS and consumers of IT services, such as value-added reselling, IT outsourcing (ITO) and business process outsourcing (BPO). Interviews and discussions with dozens of solution providers and hundreds of Gartner clients have revealed that providers in some service provider categories rely more heavily on different CSB roles than those in other service provider categories. This has allowed us to extrapolate a coarse-grained assessment that reveals how important each of these CSB capabilities is for different IT service offerings. The following is a representative set of IT services that could be part of a CSVC framework:

B2B/E-Commerce Providers Evolving B2B e-commerce providers traditionally focused on integration services (integration brokerage). Examples include GXS, Hubspan and Liaison Technologies. Infrastructure Services Infrastructure hosting and management (for example, for virtual heterogeneous hosting across multiple IaaS providers). Examples include Besol Soluciones and CSC. Application Services These services span across the application life cycle (design, build and run) of all types of solutions (inclusive of SaaS or other areas, such as testing as a service). The domain spans many functional areas, including ERP, CRM, supply chain management (SCM) and business intelligence. Examples include Accenture and Tata Consultancy Services (TCS). IT Distributors Electronics and service distribution. Examples include Arrow IT Solutions, Avnet, Ingram Micro, Synnex and Tech Data. IT Value-Added Resellers (VARs) Examples include Appirio and LTech. BPO These are wholly outsourced business process functions involving people, methodologies and technologies. Examples include ADP, Accenture and Capgemini.

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Business Process Utilities (BPUs) and Business Process as a Service (BPaaS) A subset of BPO, BPU and BPaaS solutions are two types of business processes (see Note 3) that providers deliver via the cloud to provide a business outcome (such as a credit rating, paycheck and flight reservation) in a one-to-many delivery model. Examples include Expensify and IBM's Global Expense Reporting Solutions (GERS).

CSB roles vary in terms of their importance across different IT services providers. We illustrate this via a three-point importance assessment (see Figure 1).
Figure 1. Degree of Importance for CSB Roles Across Various CSVC Service Categories

B2B E-Commerce

Infrastructure Services

IT Distribution

BPU/BPaaS

Application Services

Service Type

CSB Roles
Aggregation
Provisioning Management Financing Application Integration Technology Integration Governance Modification Implementation Analytics

Customization

Integration

= very important
Source: Gartner (October 2011)

= moderately important

= limited importance

These assessments are not absolute some providers may consider different CSB roles to be more or less important to their particular target market than we illustrate here. However, these CSB role importance assessments give traditional IT services providers clear guidance on which IT service roles will most likely be affected by cloud.

BPO
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IT VAR

There are many service providers cloud specialists that don't fit naturally within traditional or widely adopted IT service offerings. Examples include CommonIT, Okta and Oxygen. The importance of each CSB role varies so widely that we can't easily generalize for all cloud specialists.

The Key Trends Driving Change in This Space

Buyers Want More Help With Adopting Cloud Computing
One consequence of the widespread adoption of cloud computing is the complexity of managing multiple services from multiple providers. While CIOs are interested in consuming these new cloud services, they also want to be able to integrate them into their current on-premises solutions in a manageable way. The CSB role, in particular, incrementally adds to and addresses some of the unique dimensions of incorporating cloud computing into new and existing IT service offerings. In particular, it is a natural progression for the channel companies that have focused on implementation, integration and custom, on-premises solutions where multiple vendors' offerings are delivered to a customer in seamless way. Many traditional IT services providers are adopting the CSB role as part of a strategy to enrich and modernize their IT service offerings via cloud computing. CSB is also a role assumed by some new providers that have no legacy investments in traditional delivery models as a way of building new IT service offerings and differentiating existing ones. We are encountering ever more IT services providers that have adopted, or are in the process of adopting, the CSB role (see "Cool Vendors in Cloud Services Brokerage, 2011" and Figure 2).

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Figure 2. Proliferation of Examples of IT Services Providers Adopting the CSB Role

Full-Service Provider Cloud-Enabled BPO Domain-Specific Provider Cloud-Enabled IT Outsourcing Discrete Service Provider Cloud-Enabled System Integration Distributor/VAR SaaS Aggregation, Customization Specialist SaaS Integration and Governance (iPaaS), SaaS

Cloud-Based Technology Services (IaaS, PaaS, Security, Storage, etc.)

= Type of provider = Type of service

More Comprehensive Services

See "Cool Vendors in Cloud Services Brokerage, 2011" G00212316

Source: Gartner (October 2011)

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As shown in Figure 2, there are many providers representing a wide range of IT service offerings, from the technology-centric providers such as Axeda, CommonIT and Okta, to the service-centric IT providers such as ADP and Capgemini. The combination of CSB roles varies widely across a wide range of service offerings and provider categories. While such IT offerings differ substantially, they all benefit from CSB. The following three examples address how the CSB role impacts different kinds of IT service offerings. The CSB Role in IT Electronics Distribution In IT distribution (see "Marketing Essentials: A Standard Taxonomy of Terms and Definitions Will Improve the Effectiveness of the Channel"), the impact of cloud computing is leading to a distinct shift from distributing primarily physical IT products to also delivering digital (cloud-based) IT products, such as SaaS, through distributors and VARs. "Competitive Landscape: Technology Wholesale Distributors' Approach to Cloud Services" provides more detail. Providers in IT electronics distribution, such as Avnet, Arrow IT Solutions, Synnex, Tech Data and Ingram Micro, have incorporated at least one of the CSB roles aggregation into their distribution channels (see "Competitive Landscape: Technology Wholesale Distributors' Approach to Cloud Services"). The CSB role in the traditional IT electronics distribution value chain is to help enable a consistent approach for channel partners and VARs to find, provision, bill and support consumption of various cloud services in a manageable way. The early indication is that most distributors will take on the role of aggregating multiple cloud services, while others are determining what (if any) investments to make to introduce integration and customization into their offerings. The role focuses largely on cloud services aggregation, although some customization and integration can also be part of the value proposition. The distributor's value lies in providing cloud services distribution at scale to providers of cloud services by aggregating the provisioning, billing, metering and other value-based services, such as partner recruitment, management and enablement. Distributors see the key reasons to invest in cloud services as revenue protection; improved margins; new service capabilities; additional revenue streams; revenue replacement; and new vendor, service provider or channel company relationships. The CSB Role in Traditional B2B/E-Commerce In B2B/e-commerce, cloud computing is helping to drive providers of traditional B2B integration managed services (referred to as integration brokerage in Gartner research) into adopting the CSB role. Integration brokerage (see "Integration Brokerage Provides Facilitated Intermediation for B2B E-Commerce and Cloud Services Brokerage") is a fast-growing, $800 million IT services market. Providers of integration brokerage have long implemented supplier and customer supply chains using electronic data interchange (EDI), XML, FTP and Applicability Statement 2 (AS2). However, they are also beginning to deliver cloud services integration, governance and other cloud-native, value-added capabilities, in addition to their traditional role in B2B integration services (see "Cloud Service Brokerages Create a New Role for Integration Service Providers"). This new role as a CSB integrator typically builds on well-established B2B competencies.

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One reason for this change is that companies worldwide are beginning to shift application functionality procurement and order management, for example from on-premises applications to SaaS. In response, providers of integration services must learn how to integrate cloud services via APIs as easily as they integrate trading partner applications to implement B2B processes, such as order to cash or claims adjudication. Another key driver is that companies increasingly want to incorporate innovative cloud-delivered capabilities into their B2B business processes. Examples include leveraging cloud-delivered, nearreal-time contact verification to improve customer relationship management (see "Case Study: Men's Wearhouse Finds StrikeIron's CSB Suits Its Customers") and pursuing new business opportunities through cloud-based selling channels (see "Case Study: Mohawk Fine Papers Uses a CSB to Ease Adoption of Cloud Computing"). Providers of integration brokerage, such as Covisint, Hubspan, GXS and Liaison Technologies, are incorporating the CSB role into their offerings to respond to growing client demand for cloud services integration and innovation, typically emphasizing their integration value-add, but also delivering some aggregation and customization. The CSB Role in BPO In BPO, the impact of cloud computing is the cloud-enabled industrialization of IT services that we refer to as BPU services. BPUs are a cloud-sourced delivery architecture for BPO that features automated delivery and pay-as-you-go access to standard processes. Providers are increasingly assuming the CSB role to help deliver BPUs. While the CSB role for BPUs commonly amalgamates services at the infrastructure and application layer, it can also integrate the process layer (see "Cloud-Enabled Outsourcing: Use BPM to Ensure Process Agility in Alternative BPO Service Delivery Models"). IT services providers will sometimes aggregate multiple BPU service streams, where they mash up multiple cloud-sourced BPU services to create bundled business process assemblages. "Cloud Services Brokerages Will Enable Business Process Utilities to Deliver Off-the-Shelf Processes" provides more detail.

What We Expect Will Happen in the Future

Adoption of the CSB role in the CSVC will occur in three basic scenarios:
1.

Established providers adopting the CSB role to evolve traditional IT service offerings (for example, VAR or BPO) New providers with CSB-enabled and CSB-differentiated variations of traditional IT service offerings New providers with new types of IT services that are CSB-enabled (for example, cloud storage or virtual browser)

2.

3.

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New providers are already encroaching n the traditional IT services provider status quo with CSBenabled variations of traditional IT services and brand new IT service offerings. However, wellestablished providers are developing their solutions, and it is likely that the greatest revenue impact of the widespread adoption of the CSB role on the IT services industry will be where established IT services providers evolve their solutions by adopting the CSB role. That makes CSB adoption a very highly leveraged activity, affecting hundreds of billions of dollars of expenditures on IT. Additional expectations include:

The expense of adopting the CSB role as a component of an IT services solution will depend on the proportionate cost of delivering cloud-based technology relative to other solution components (such as people or methodologies). At one extreme for cloud specialists the CSB role combined with cloud-based technology represents the bulk of cost of product. At the other extreme for providers of BPO it is more likely that the cost of the CSB role is a relatively small proportion of the total cost of product. The proliferation of cloud services adoption by IT buyers means that providers must move quickly to assume the CSB role. As more of a customer's IT portfolio becomes cloud computing-based, they will simply assume that IT services providers are adept at cloud computing; and to do that, providers must adopt the CSB role.

Finally, how providers will pass on the cost for CSB to consumers depends largely on the impact of cloud computing and the value to users of each CSB role on each IT service category. While at one extreme, the CSB role can represent net new IT spending for predominantly cloud-heavy and services-light IT offerings (for example, cloud storage, cloud streams, cloud composite applications), at the other extreme, the CSB role is often bundled with traditional IT services (such as IT distribution, value-added reselling or BPO). Either way, a provider with a viable service offering that incorporates the CSB role must sufficiently capitalize on the value that CSB delivers to sustain its service business model. For example, integration brokerage is a $1.5 billion market, and a growing portion of that revenue will accrue to CSB as the B2B providers increasingly deliver CSB in conjunction with traditional supply chain integration projects. In BPO, the CSB role will incrementally represent a growing portion of the already well-established multi-$100 billion BPO market segment (see "Cloud Services Brokerages Will Enable Business Process Utilities to Deliver Off-the-Shelf Processes"). Thus, while CSB will drive some net new IT spending, it will more often be associated with incremental changes in IT spending across existing IT service categories. As such, CSB does not represent a stand-alone IT market segment, per se it is a composite market segment, spanning many individual IT market segments, and a direct forecast is beyond the scope of this research.

Examples of Providers Adopting the CSB Role in the CSVC

We profile some IT providers that have adopted or are adopting the CSB role, ranging from wellestablished providers of traditional IT services to cloud specialists. The profiles listed here are representative examples from a wide range of IT services, and do not represent an exhaustive list of service providers in each IT service category that have assumed the CSB role:

Appirio (cloud-centric VAR/system integrator [SI])

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Besol Soluciones (IaaS migration and management) CommonIT (cloud specialist) CSC (utility and hybrid IaaS services) Dell (IaaS, application services) eBuilder (business process services) BlinkHR by ExpertMarkets Hubspan (evolving e-commerce/B2B integration service provider) Ingram Micro (IT distributor) Jamcracker (SaaS enablement/aggregator) Liaison Technologies (evolving e-commerce/B2B integration service provider) LTech (cloud-centric VAR/SI) Oxygen (cloud specialist) StrikeIron (cloud business information service provider) Synnex (IT distribution, BPO) TCS (SI, application services, BPO, etc.)

Appirio
San Mateo, California (www.appirio.com) Analysis by Eric Knipp and Daryl Plummer Appirio is a midsize provider (with 300 employees) that focuses on its mission to "accelerate the cloud-powered business" through a combination of cloud services and integration technology (iPaaS). Working primarily with salesforce.com, Force.com, Workday, Google App Engine, Google Apps and Amazon Web Services, Appirio has partnerships with salesforce.com, Google and Workday. Part of its startup capital came from salesforce.com, which recently reinvested additional funds for Appirio's international expansion. Appirio derives most of its revenue from consulting engagements that help companies migrate, extend or customize SaaS applications. In this role, Appirio acts in two CSB roles: a customization brokerage and an integration brokerage. It has undertaken more than 1,000 projects, many focused on building custom solutions on top of application-platform-as-a-service (aPaaS) offerings (such as Google App Engine or Force.com). Appirio has discrete prices for each of its cloud connector offerings, but the majority of the company's business is negotiated, custom-made automation on a per-deal basis. For example, the cloud storage connector linking salesforce.com to Amazon Simple Storage Service (Amazon S3) is priced based on a tiered-storage limit, while the personal and

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premium sync connectors (which synchronize email, calendar and contact data) are sold for a fixed price. Appirio has carried out customized work for companies such as Avon, Japan Post and Genentech, and, although it may make use of connectors in custom solutions, in those cases, pricing must be negotiated. Much of Appirio's model makes it seem like a traditional SI, because of the consulting work. However, the company continuously builds intellectual property from each project and its own CloudSpokes cloud developer community, which it leverages into future projects. This is how a cloud specialist like Appirio can compete with more-traditional integrators while expanding its relative value. Appirio has the advantage of being very close to salesforce.com, and has made big bets on salesforce.com, Google and Workday as strong partners for the future. Appirio's early formation as a SaaS integration provider positioned it for quick growth, but it is small enough to slip under the radar of goliaths like IBM Global Business Services and Accenture, which have largely ignored Appirio's type of business. The biggest challenges to Appirio's future come from the firm's desire to diversify its project-focused service revenue, as well as the inevitable pressure that will come when consulting giants move into the SaaS integration market.

Besol Soluciones
Seville, Spain (www.besol.es) Analysis by Daryl Plummer Besol is an emerging provider of management and brokerage at the IaaS level. The company specializes in managing across multiple cloud IaaS providers (for example, reporting, administration, software configuration and domain name system [DNS] management) and delivering the ability to migrate from one to another seamlessly. The Besol Tapp platform provides blueprints, templates and administration consoles to place virtual machines (VMs) under management in whichever IaaS offering is selected by the customer. Once these are established, migrating from one provider to another becomes a relatively straightforward task. Besol expects cloud migration to go into production by the end of 2011. Very few companies offer infrastructure migration in the cloud along with federated management. Cloudkick was an early competitor that was bought by Rackspace, but other competitors are scarce. This does not mean, however, that the area is of low interest. Cloud consumers (especially large IT organizations) increasingly ask for integration between cloud IaaS offerings and more seamless or integrated management. Support for GoGrid, Linode, Amazon AWS and Rackspace is available. However, Besol has plans to begin use of Eucalyptus and OpenNebula as a foundation for delivering private cloud migration and management. This would include making cloudbursting from a private cloud to the public cloud providers simpler. Pricing for Besol Tapp services is in terms of how many VMs are placed under management. This provides a layered pricing scheme across small and large customers. It also allows Besol to work its

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way into wholesale pricing for existing IaaS offerings from other companies. For example, Besol expects to deliver lower pricing for Amazon VMs than a direct consumer of Amazon could get, because Besol aggregates a lot of customers to and through the Amazon services. This model makes Besol's Tapp brokerage value clear and provides a direct savings benefit to end customers. Besol would own the customers and broker that relationship across multiple IaaS providers.

CommonIT
Lyon, France (www.commonit.com) Analysis by Benoit Lheureux CommonIT is a French-based cloud specialist delivering a SaaS-based virtual browser solution, called AirShip, that helps companies solve the problem of providing access for their employees to a wide range of cloud-based services, such as SaaS from one browser. CommonIT's solution incorporates CSB aggregation and virtual browser technology. In its aggregation role, CommonIT provides centrally managed browser configuration and full life cycle management and provisioning for hundreds or thousands of users with access to many websites and cloud services, with various levels of authorizations (for example, only authorized users can log in to particular accounts and print selected content). Its virtual browser technology allows companies to provision just one browser that supports most Web-based applications, and bridges gaps in browser functionality. For example, AirShip can concurrently execute multiple industry standard rendering engines and plug-ins. It also provides other value-added services, such as single sign-on (SSO), filtering, etc. CommonIT masks application incompatibilities across Microsoft's Internet Explorer, Mozilla's Firefox, Google's Chrome and Apple's Safari for example, it can be used to extend access to the iPhone and iPad for applications using Flash. CommonIT is headquartered in France, where most of its customers are located, although it is also selling its solution throughout Europe and recently closed its first account in the U.S. Its strengths are cross-platform browser compatibility delivered as a service, and it is an early mover in that market. Its challenges include its relatively small size and immature solution.

CSC
Falls Church, Virginia (www.csc.com) Analysis by Claudio Da Rold Although CSC is traditionally a technology-neutral IT outsourcer, it decided to standardize on Vblock from VCE for a selection of its cloud fabric services. We expect that CSC will increasingly continue to focus on industry-related solutions while brokering external cloud offers. CSC's cloud services fall under the "Trusted Cloud" umbrella, which includes solutions delivered from CSC data centers (both shared/public and dedicated/hosted private) and client-owned data centers (BizCloud), under the premise of an extension of the same technical and commercial model.

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CSC's Trusted Cloud Services portfolio includes CSC CloudCompute (IaaS), BizCloud, Development and Test, CSC CloudStorage, CloudMail for Microsoft Exchange, CloudMail for VMware Zimbra, CSC CloudIAM, CSC CloudDesktop, CSC Unified Communications and Collaboration, and CSC Managed Network Services. CSC's role in the CSVC includes partnerships with technology players to create foundational platforms for IaaS and infrastructure utility (IU). CSC can also provide integration, and consulting services for cloud enablement, application transformation, SaaS and managed services PaaS that is consistent with the CSB integration and customization roles. CSC recently announced SAP Infrastructure Utility, which includes basis layer support.

Dell
Round Rock, Texas (www.dell.com) Analysis by Dane Anderson and Benoit Lheureux Building on its established application service business, Dell plans to offer IaaS and selected hosted applications in conjunction with integration services. These moves will have Dell incorporating at least the CSB aggregator (delivering multiple SaaS applications) and CSB integrator (integrating various cloud technologies in its stack, and integrating SaaS offerings with each other and onpremises applications) roles into its own and its cloud integration partner's IT service portfolio. Its new IaaS service, called Dell Cloud with VMware vCloud Datacenter Service, is targeted at midsize and large companies, and is planned for release later this year. It will be based on the VMware vCloud platform and delivered from Dell's data center. It will provision its service in part by including managed security services, derived from Dell's acquisition of SecureWorks. Dell's newly announced hosted application portfolio, called Dell Cloud Business Applications, is targeted at small and midsize companies, and will be rolled out by application. While Dell has enjoyed increasing application service revenue, this has been gained traditionally in larger enterprises. With this shift, Dell makes salesforce.com's CRM available now, and it plans to offer other applications (such as marketing automation, financial accounting, HR and other functional applications) in the future. Dell plans to differentiate these offerings by combining them with integration brokerage and analytics services. Integration services will be used to integrate the hosted applications with the vendor's customers' on-premises software, other cloud services and each other.

eBuilder
Stockholm, Sweden (www.ebuilder.com) Analysis by Benoit Lheureux and Michele Cantara eBuilder has approximately 200 employees and delivers configurable business processes via a CSB-inspired solution that combines cloud infrastructure and IT services. eBuilder targets use case scenarios that call for solutions that are more comprehensive than typical B2B/e-commerce solutions (for example, integration brokerage for procure to pay), but less comprehensive than
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typical BPO solutions (for example, outsourcing of all procurement). eBuilder helps companies to implement and drive continuous improvement in the execution of complex, multienterprise processes (such as supply chain reverse logistics), which, at times, span broad constituencies. These constituencies include transport companies, suppliers, resellers, repair centers and financial services providers. eBuilder's Cloud Processes are e-commerce-centric forms of BPU or BPaaS offerings applied via the separate bundling of cloud technology and services to supply chain, procurement, travel-related and custom processes. Technically, each solution combines B2B connectivity (to integrate multienterprise processes), master data management (to manage a product catalog), SaaS (for application functionality to extend ERP), business process management (BPM; for process modeling) and business activity monitoring (BAM) functionality (for process analytics and visibility such as track and trace). A key emphasis is process agility, enabled through a combination of BPM best practices and technology that leverages explicit process modeling, a rule engine, and near-real-time process visibility to expose key performance indicators, early process failure detection and agile process improvement. The service component of each solution includes multienterprise process strategy; design and implementation; B2B integration project implementation; and management and application design, implementation and support. To deliver its Cloud Processes, eBuilder assumes all three CSB roles, including aggregation (for example, to incorporate various third-party cloud services, such as third-party logistics [3PL] into a logistics solution), integration (for example, to integrate supply chain partners and their various ERP partners) and customization (for example, to implement multienterprise composite applications for process visibility). eBuilder has 120 customers for its Cloud Processes solutions in several regions, including the Americas and Europe.

BlinkHR by ExpertMarkets
San Francisco, California (www.expertmarkets.com) Analysis by Robert Brown BlinkHR is a new offering from one of Exigen Capital's portfolio companies, ExpertMarkets. With six customers to date, BlinkHR illustrates what Gartner believes will become a common subset of the BPU/BPaaS CSVC: process integration brokerage applied to a specific process. BlinkHR assembles a common management of discrete HR processes, pieces of processes or fragments, which organizations can insource and outsource. It also includes CSB aggregation, in the form of the consolidated provisioning of multiple SaaS applications, and CSB customization, in the form of composite applications across the service. BlinkHR's service has three components: (1) a service provider integration platform/portal (its anchor function); (2) resolution navigation and HR service delivery orchestration; and (3) SLA reporting. Its service integration platform makes all HR services available with one URL and an SSO, and eliminates redundant HR data entry by exchanging common data among HR services. This

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unifies service delivery across disparate process fragments and service providers. BlinkHR also takes context from the information obtained from end-user session variables, such as who the user is, the user's organization, the application service the user is using and the point the user is at in a given workflow. The buyer can obtain this data from any service, or from any supplier it may be using, internally or externally. There are several external suppliers brokered by BlinkHR at the process, application and infrastructure layers of the service. It is designed to service midmarket buyers primarily. While Gartner has seen other HR service providers seeking to streamline the workflow in their own offerings, BlinkHR's brokerage model does this across multiple providers, platforms and data feeds, eliminating points of handoff and friction in the HR process workflow that its platform orchestrates.

Hubspan
Seattle, Washington (www.hubspan.com) Analysis by Benoit Lheureux Hubspan is a B2B/e-commerce provider that delivers integration brokerage. Its traditional specialty has been sell-side (customer) supply chain integration projects (where there are more challenges integrating with organizations with diverse integration requirements). In more recent years, it has also formed partnerships with other service providers (for example, Ariba, IBM and NetSuite) to help them "fill the gap" for the fulfillment of integration brokerage for their B2B communities. This latter class of IT projects which heavily involves the CSB integration role has driven Hubspan to reassess its role in the CSVC by incorporating native cloud capabilities into its technology and IT service portfolio. Hubspan delivers integration project implementation and management, which it runs on its B2B network. Hubspan's customers rely on it to provision connections to on-premises applications (for example, SAP and Oracle), e-commerce suppliers and customers, and to various cloud services. Hubspan integrates B2B processes (for example, order to cash), and can implement customized business rules and business intelligence. The impact of cloud computing has driven Hubspan to invest in new technology (for example, to integrate SaaS functionality and support catalog "punch out") and to expand its services capabilities (for example, to provision connections to cloud services). Hubspan's strengths include its specialty in customer integration, its expanding portfolio of IT services partners and its growing expertise in cloud computing. Its challenges include relatively limited growth after 10 years in business and a limited international scope of operations (primarily in the U.S., with some projects in Europe).

Ingram Micro
Santa Ana, California (www.ingrammicro.com) Analysis by Tiffani Bova

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Ingram Micro supports global operations through an extensive sales and distribution network throughout North America, EMEA, Latin America and the Asia/Pacific region. Ingram Micro has been offering managed services since 2006 and cloud services since 2007, and was one of the early movers for cloud computing in distribution. Recently, the company launched the Cloud Marketplace, a transactional, online marketplace in which solution providers can shop, procure, provision, manage and obtain invoices for individual cloud services. Ingram Micro's current partner lineup focuses on infrastructure and business productivity solutions, so it has started with IaaS and SaaS, and will look to PaaS at a later date. Ingram Micro has built a sales, marketing, operations and business development team to focus exclusively on cloud and managed services. It plans to increase these resources further during 2011. It has reorganized its sales organization to provide greater leverage, and has built a vendor, supplier and service provider management organization, with dedicated staff in the Asia/Pacific region and Latin America, where Ingram Micro is seeing serious regional demand. This distributor is aggregating multiple cloud services to provide scale around provisioning, billing and chargeback for its partners. Ingram Micro invested in aggregating various cloud services to build its Cloud Marketplace. It has not yet invested in any cloud services integration or customization; however, that scenario and a fuller CSB role may be in its future.

Jamcracker
Santa Clara, California (www.jamcracker.com) Analysis by Daryl Plummer Jamcracker has a long history as an application service provider and SaaS enabler and aggregator, but now provides a deeper, richer opportunity for CSB. It delivers a service network that enables providers, partners and enterprises to interact and deliver robust cloud services. In the role of CSB aggregator and CSB integrator, the Jamcracker Services Network provides a channel delivery mechanism, a marketplace of services and an enabling framework for integration brokerage in the cloud. The platform underlying it offers service integration, provisioning, billing, authentication, help desk ticketing, and service/user life cycle management and deployment capabilities to unify the efforts of multiple customers and partners. This is a rare approach, as the network and platform provide a significant ability to build a cloud ecosystem where all parties can monetize information and services. Jamcracker enables service cataloging in the enterprise, and this takes the form of a marketplace for services in the public arena. The emergence of app stores as a means of delivering cloud applications comes in many forms. In the case of Jamcracker, it is not just an app store, but also a service center. The delivery of services is only one part of the equation, as the ecosystem must provide ways for partner providers to add value to each other's services; deliver joint services; integrate existing services; and build a unified billing, metering and chargeback financial model for how those services will generate revenue, and for whom. Jamcracker offers white labeling of services from one provider through another. The

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Jamcracker platform, therefore, is an enabling mechanism for the brokerage that happens in the ecosystem. As an early CSB, Jamcracker is attacking one of the more-critical, but less-often-pursued, courses. The marketplace of services gets little attention, as integration projects and system integration projects get the first look. However, as a provider of integration capability and customization of services, Jamcracker is involved in multiple brokerage-enabling functions.

Liaison Technologies
Altanta, Georgia (www.liaison.com) Analysis by Benoit Lheureux Liaison Technologies is a multinational B2B/e-commerce provider that has historically focused on integration brokerage (also known as managed services for integration projects). Its specialty has been implementing and managing IT projects, including any combination of application-toapplication (on-premises) and B2B integration scenarios. However, in recent years it has been driven by evolving customer demands prompted by their adoption of cloud computing to also integrate cloud services. Historically, integration brokerage has focused on supply chain integration processes such as order to cash, which typically involves exchanging messages and transactions between the on-premises applications of different trading partners (for example, between the procurement application for a retailer or manufacturer, and the order entry applications of their suppliers). In "Case Study: Mohawk Fine Papers Uses a CSB to Ease Adoption of Cloud Computing," we revealed how Liaison Technologies evolved its role in the CSVC by incorporating new native cloud services capabilities into its solution. Mohawk demonstrated that having one cloud services provider relationship (that is, with Liaison Technologies as its CSB) made the transition to using cloud computing much easier than having multiple relationships (that is, with a number of individual cloud services providers). The company uses its one connection to Liaison Technologies' cloud and relies on Liaison Technologies' IT services to facilitate access to all its trading partners, simplifying Mohawk's B2B strategy and facilitating the adoption of cloud computing.

LTech
Bridgewater, New Jersey (www.ltech.com) Analysis by Benoit Lheureux LTech is a VAR that specializes in Google Apps. It assumes the CSB aggregation role by delivering Google Apps like Gmail, Chat, Calendar, Contacts and Docs, in combination with other cloud services. These include its own suite of Google Apps, third-party cloud functionality and custom SaaS that it implements for customers. LTech's Google App Engine-based Power Panel suite includes a variety of provisioning, management and security features to facilitate the deployment of Google Apps in demanding enterprise environments. LTech delivers all this in a scalable fashion,

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administering all customer deployments within one scalable, multitenant management domain in the native Google App Engine container. While LTech emphasizes its role as a VAR in its go-to-market strategy, it also assumes the CSB customization role by providing on-demand custom application development services for companies that need to augment Google App Engine-based application functionality. LTech's business model relies on capitalizing on gaps in Google Apps functionality (such as Google Docs backup) and manageability (large-scale provisioning and SSO), and on its role as a VAR to add value to these applications. As such, LTech's long-term success largely depends on how much enterprise users really need (and will pay) to close Google Apps gaps; how long it will take for Google to close some or all of these gaps itself; and how far LTech can continue to innovate and add new and useful Google Apps enhancements, third-party applications and other unique capabilities via its VAR role.

Oxygen
Redwood City, California (www.oxygencloud.com) Analysis by Benoit Lheureux Oxygen is a cloud specialist and spinoff from LeapFILE, a prominent provider of managed file transfer. Oxygen assumes the CSB aggregation role by delivering an enriched, collaborative form of cloud storage services, called Oxygen Cloud, which it delivers as a service in two forms. On the back end, Oxygen allows users to define multiple, metadata-rich and highly configurable spaces, each of which can leverage any combination of different storage providers. For example, this enables users to take advantage of and even combine ubiquitous free cloud storage (such as Amazon S3) in some cases; premium high-performance, highly reliable cloud storage services (for example, Nirvanix) in other cases; and on-premises storage options (such as EMC Atmos) when desired. On the front end, Oxygen gives users flexible storage access and management options. Access is via a combination of direct file system integration (for example, for Windows File Explorer and Mac Finder), and via the Oxygen App for iPhone, iPad and Android. Access includes finegrained administrative and governance mechanisms to support collaborative file and data sharing. Oxygen's blend of agnostic back-end storage and front-end access, combined with strong security, management and configurability to support highly collaborative content sharing from individuals through large enterprises, is a compelling value proposition, versus single-vendor cloud storage services. Oxygen has a few enterprise customers, and is actively pursuing partnerships with technology providers to resell its service. Oxygen's long-term success largely hinges on providing differentiation from similar providers, such as Dropbox, and how much risk enterprise users are willing to embrace, given that its solution is just going into general availability.

StrikeIron
Cary, North Carolina (www.strikeiron.com)

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Analysis by Benoit Lheureux StrikeIron is a privately funded cloud specialist with a relatively unique role as a horizontal marketplace, called IronCloud, for various cloud-services-based business information, including data quality and communication solutions. In the past few years, StrikeIron has evolved from its primary role in CSB aggregation with a service marketplace to a role that also involves CSB customization via the bundling of related services (for example, address, email and phone number verification for contact record verification) delivered via prepackaged integration (including preintegrated connections to Magento, MarketLive, nopCommerce, salesforce.com, Informatica, Microsoft Azure and Eloqua) for specific use case scenarios, such as Contact Record Verification for salesforce.com (see "Taxonomy, Definitions and the Vendor Landscape for Application Integration Solutions, 2011" for definitions of packaged integration and cloudstreams). StrikeIron offers other e-commerce-related, cloud-based services that add real-time sales tax rates, SMS for package delivery notification, reverse phone and address lookup, and foreign currency rates for pricing localization. Users register only once with the StrikeIron network, and utilize normalized APIs, security and billing services. Once registered, they may consume any other available cloud services on its network (StrikeIron claims that more than 20% of its named customers do so). While StrikeIron is still relatively small (with about 25 employees), it has more than 750 active named customers. For insight into how companies leverage the StrikeIron service, see "Case Study: Men's Wearhouse Finds StrikeIron's CSB Suits Its Customers."

Synnex
Fremont, California (www.synnex.com) Analysis by Tiffani Bova Synnex is a distributor and BPO company that operates in the U.S., Canada, China, Japan, Mexico, the Philippines and the U.K. Synnex believes distribution will play a significant role in cloud-based solutions, because integrating multiple solutions and offering them to thousands of resellers is at the center of what it does today. It has been actively partnering with cloud computing providers to assume the CSB integration and customization role, and to assemble a strong portfolio of products to build a platform of solutions for its reseller partners. To support its cloud strategy and partner base, Synnex will continue to leverage its current BPO services, which include service contract renewals, customer support and many others under its wholly owned subsidiary, Concentrix. Synnex has also built two practice areas related to the cloud: mobile application development services and CLOUDSolv UC, a private, branded unified communications cloud solution. Synnex's value proposition is that, to date, it is the only distributor we know of that can augment developer capabilities as well as manufacture and assemble solutions. From a channel perspective, it claims to be the only distributor that will customize cloud services using its own in-house resources to develop new services to take to market. In addition, Synnex has been working on building out a strong independent software vendor community around Red Hat and the Microsoft platform to further extend the ecosystem's capabilities.

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TCS
Mumbai, India (www.tcs.com) Analysis by Fran Karamouzis TCS is an IT services, business solutions and outsourcing organization focused on delivering results through a consulting-led integrated portfolio of IT and IT-enabled services through its Global Network Delivery Model. TCS has more than 198,500 employees in 42 countries, delivering revenue of $8.2 billion (for the fiscal year ending 31 March 2011). TCS is the largest IT services provider headquartered in India, and it is part of the Tata group, one of India's largest industrial conglomerates and a highly respected global brand. TCS offers end-to-end cloud services as well as strategic consulting, to further transform the way organizations leverage IT. The cloud services offered by TCS span three areas:

Discrete services, including all kinds of consulting (strategy, business, IT consulting) and system integration. Examples include business cases for cloud adoption, including road maps, total cost of ownership and ROI analysis; application portfolio analysis to identify and prioritize "cloud ready" applications and workload; application remediation and optimization to achieve cloud-enabled, cloud-ready, cloud-optimized and cloud-native capabilities, aligning cloud initiatives and goals with enterprise security strategy; unified controls and security frameworks for the effective measurement and continuous monitoring of private and hybrid cloud environments; IT service delivery analysis, with a focus on change configuration, incident and SLA management; IT architecture and operational framework for cloud computing; and assessing savings opportunities in different areas, such as business intelligence and disaster recovery. Cloud-enabled outsourcing offerings, including all types of solutions that are developed, bundled and packaged as outsourcing offerings (platform-based BPO services often referred to as BPaaS, application services, testing as a service and others). Here, TCS leverages one or more cloud computing technologies within the solution's overall architecture. Cloud-enabled outsourcing solutions include all types of managed service solutions that are developed, bundled and packaged as components of outsourcing offerings. Although not yet deployed outside of India, TCS has developed two additional capabilities that leverage cloud-enabled outsourcing offerings: (1) iON, a cloud-based IaaS offering to address the IT infrastructure needs of small or midsize businesses in India; and (2) C-Edge, a joint offering developed with State Bank of India that is focused on the application layer and designed to deliver the flexibility and scalability of TCS BaNCS Core Banking solution. IT service offerings that emphasize the three basic CSB roles to either aggregate, integrate or customize specific solutions for a client. Examples include identifying and designing the cloud computing form aligned to enterprise business goals; transitioning applications to different cloud vendors based on their workload and cost-benefits; defining a migration strategy and road map to meet specific cloud implementation objectives and improve overall IT management and governance; and identifying your core security issues and optimizing information security costs.

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What You Need to Know

Cloud computing will have a substantial, enduring impact on the IT services industry and the emerging CSVC. The CSB roles give traditional IT services providers clear guidance on which IT service roles will be most affected by cloud computing.

Advice to Providers

Adopt the CSB role to enrich traditional IT service capabilities. Investigate the level of importance of different CSB roles to most effectively modernize traditional service offerings to fit the CSVC framework. Deliver different levels of competency for different CSB capabilities in the proper combination to deliver your IT service offering most cost-effectively.

Additional research contributions and reviews were provided by Fran Karamouzis, Eric Knipp, Frank Ridder, Cathy Tornbohm, Gianluca Tramacere, Claudio Da Rold and Gilbert van der Heiden.

Recommended Reading
Some documents may not be available as part of your current Gartner subscription. "A Logical Reference Model for Cloud Services Brokerage" "Cool Vendors in Cloud Services Brokerage, 2011" "Competitive Landscape: Technology Wholesale Distributors' Approach to Cloud Services" "Integration Brokerage Provides Facilitated Intermediation for B2B E-Commerce and Cloud Services Brokerage" "Cloud Service Brokerages Create a New Role for Integration Service Providers" "Case Study: Men's Wearhouse Finds StrikeIron's CSB Suits Its Customers" "Case Study: Mohawk Fine Papers Uses a CSB to Ease Adoption of Cloud Computing" "Cloud Services Brokerages Will Enable Business Process Utilities to Deliver Off-the-Shelf Processes" "Cloud-Enabled Outsourcing: Use BPM to Ensure Process Agility in Alternative BPO Service Delivery Models" "Forecast: IT Services, 2008-2015, 2Q11 Update" "Forecast: Public Cloud Services, Worldwide and Regions, Industry Sectors, 2010-2015, 2011 Update"

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Evidence Traditional IT services providers have been important enablers of and participants in organizations' IT strategies implementation and support for more than three decades. A mature market, IT services spending shows a large opportunity today ($862 billion), and we forecast it will reach nearly $1 trillion by 2015 (see "Forecast: IT Services, 2008-2015, 2Q11 Update"). IT services providers have traditionally relied heavily on various forms of hosting; however, until recently, they have not incorporated much cloud computing (that is, IaaS, PaaS, SaaS, etc.). The worldwide market for public cloud services of all types including IaaS, PaaS, SaaS and BPaaS was $74.3 billion in 2010, up from $58.6 billion in 2009, a growth rate of 26.7% (see "Forecast: Public Cloud Services, Worldwide and Regions, Industry Sectors, 2010-2015, 2011 Update"). Note 1 CSB CSB is a form of intermediation for IT projects that are cloud-centric: "A cloud services brokerage is a role in which a company or other entity adds value to one or more (generally public or hybrid, but possibly private) cloud services on behalf of one or more consumers of those services." See "Defining Cloud Services Brokerage: Taking Intermediation to the Next Level." Note 2 The Role of the CSVC in IT Services Cloud services are increasingly an option for accessing IT functionality and IT-enabled business processes, and are changing the way buyers access and manage IT. There are still many challenges in leveraging new cloud models, including the need to manage multiple components sourced from multiple suppliers to achieve end-to-end business solutions. The CSVC depicts the various cloud offerings and the roles that service providers will play to add value for the enterprise. The CSVC comprises four primary cloud-based service offerings: IaaS, PaaS, SaaS and BPU/BPaaS, along with three functional cloud-based services: security as a service, information as a service and communications as a service. Note 3 Distinguishing BPU and BPaaS Offerings In BPO, the impact of cloud computing is the cloud-enabled industrialization of IT services; for several years, Gartner has referred to the evolution of this BPO delivery architecture as BPUs to describe BPO in the cloud. While BPU services have seriously accelerated the use of standardized services and compressed contracting cycle times (for example, weeks, not months), BPU contracting still resembles that of traditional BPO. Given the pace of change wrought by cloud computing across the board in IT services, increasingly we will see BPaaS grow in prominence as a variant of BPU, most notably characterized by "I accept"-style, process-on-demand contracting models. Nevertheless, both BPUs and BPaaS solutions are cloud-sourced delivery architectures for BPO that feature automated delivery and pay-as-you-go access to standard processes. This research is part of a set of related research pieces. See Leveraging the Cloud Services Value Chain for Competitive Advantage for an overview.

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This document is published in the following Market Insights:

Consulting & Solution Implementation Services Worldwide IT Outsourcing Worldwide

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