Procurement

Comment: Why the 'cloud broker' concept is broken

concept art for cloud services

There has been a lot of talk lately that the federal government should hire private-sector intermediaries to "broker" the sale of cloud computing services to government agencies. But why should the government pay third-party brokers to purchase cloud services on its behalf when it can buy them right now directly from a pre-approved vendor?

The cloud broker model proposed by the General Services Administration forces the government to buy cloud services from a private-sector middleman that not only adds no value, but also drives up the government's costs and increases inefficiencies and delays.

Point/Counterpoint

This article is part of an ongoing debate regarding the value of cloud brokers. For other points of view, see:

Sean Rhody: Cloud brokers make sense

Greg Mundell: What's good about the cloud broker/integrator model?

As someone who has spent the past 30 years of my professional life providing technology solutions to the federal government, let me explain why the cloud broker concept is a bad idea.

First, the cloud broker concept would replace GSA's full and open competitive bidding process with commercial brokers' undisclosed preferences.

The cloud broker model has the potential to be fraught with conflicts of interest, as third-party vendors could be tempted to find a way to steer business to their affiliates, partners or subsidiaries. With federal agencies facing severe budgetary constraints, government purchasing decisions deserve more transparency, not less.  

As Rep. Doris Matsui (D-Calif.), co-chair of the Congressional High Tech Caucus and its Cloud Task Force, said in a November 2012 letter to GSA, "While some stakeholders see the use of private sector cloud brokers as a benefit, others are concerned that adding an additional layer of private sector intermediaries could increase the cost of cloud services and replace a competitive bidding process with the unexamined preferences of these brokers."

Second, adding a third-party broker would create a costly and unnecessary barrier between public cloud customers and private cloud providers.

The cloud broker model creates the gratuitous role of a "translator" when no such role is needed. The broker concept not only fails to recognize, but also devalues the continuous consultative discussions and brainstorming sessions that cloud providers offer their customers, usually at no additional cost. Cloud services require a trusted partnership between an agency and its cloud service provider; a broker adds no value and gets in the way.

As Sen. Roy Blunt (R-Mo.), a senior member of the Senate Appropriations Committee, noted in his letter to GSA, "I am concerned that introducing a third party into this [cloud purchasing] process, which would inhibit direct contact between the procuring agencies and their service provider, could make it more difficult and costly to troubleshoot technical issues as they arise."

Third, the cloud broker concept is based on the flawed assumption that a new business model is needed to meet the current and future cloud computing needs of GSA's customer agencies.

GSA has a long history of acting as the government's broker of complex, pay-per-use services for its customer agencies. For instance, GSA has been brokering metered, cloud-based services, such as long-distance voice and data services, for decades.

GSA's Federal Acquisition Service provides several contract vehicles that allow government agencies to acquire cloud services from a wide array of pre-approved providers. For example, GSA's Networx contract offers dedicated and colocation hosting services. Cloud products can also be purchased via GSA's IT Schedule 70 or via blanket purchase agreements.

Creating a new business model that replaces or duplicates these vehicles would add another layer of bureaucracy and complexity that would result in costly delays to the government's adoption of cloud services.

It is obvious to us and many others that GSA's cloud broker concept represents a substantial change in how government agencies would procure cloud services. We believe that a change of this magnitude merits proper oversight from Congress, the Office of Management and Budget, and other policy makers, constituents and overseers.

As Matsui explained in her letter, "I also believe it makes sense to consider all of the facts regarding the cloud broker concept before making any decision to move forward. I think a policy change of this magnitude merits substantial attention."

In the meantime, GSA must work collaboratively and accept its responsibility as the government's cloud service broker, which is consistent with its mission, history and legacy.

Rather than outsourcing one of its core missions, GSA would better serve its customer agencies and the American people by using or, if necessary, augmenting its existing contract vehicles to quickly and effectively deliver cloud services to federal agencies.

We stand ready to work with GSA and other federal agencies so that together, we can rapidly develop and deploy the best cloud services solutions that meet the government's unique needs.

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Reader comments

Mon, May 20, 2013

I'm in IT, and suffer from having to deal with 'Brokers" already - folks on the side of a certain vendor, for reasons that typically defy logic. Our department is more than capable of picking our own providers based on our own critiera, and having to put up with a layer of 'Brokers' sounds about as productive as having congress apply their agenda, I mean 'Broker', my healthcare options. We will find a way to go around or through the brokers, but probably not until they get a significant cut of the monies laid aside for agencies to procure necessary services. Does anyone here feel that the pro-broker statements come from those that will profit from brokering? If so, how much cred do they even sport? Apologies for the rhetorical question.

Tue, May 14, 2013 Iyoob

Very good article, Diana. Hence the need for a brokerage platform independently owned and operated by the government themselves (or their trusted SIs/VARs). This will give them the choice offered by a broker platform without sacrificing control and security.

Sat, May 11, 2013 Shailesh India

Absolutely!!! CSB doesn't makes sense unless broker provides some value over vanilla services of provider. CSB need to integrate services, consolidate them, provide over-arching framework, provide single service level, etc. But then it won't be called Cloud Broker, isn't it? It might as well be called Cloud Aggregator.

Thu, May 2, 2013 Praveen Texas

Cloud brokers bring transparency, choice, and decision support much like online travel comparison sites do. This is particularly important when prices and services change continuously as they do in the cloud world. It is not surprising that some cloud providers don't like cloud brokers--they don't like comparison shopping and they want to avoid transparency. But consumers and taxpayers on the other hand really benefit from real time comparison shopping.

Thu, May 2, 2013 bruce read Austin

My company procures IaaS from Savvis, Terremark, Amazon, GoGrid, and Opsource. They each have a sweet spot in the market. By the same token, none of the CSPs have the best solution for every occassion and thus the value of Cloud Service Brokerage - Arbitrage. The Broker is on the side of the customer to enable choice, promote competition and transparency. This author is essentially promoting Vendor Lockin - a problem CIO's can solve with cloud service brokerage

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