TBR: Pure play acquisitions plentiful for quick picking

The cloud brokerage market is reaching an inflection point, with pure plays being acquired and multilines building out their brokerage platforms.

As enterprises face a growing skills gap around cloud integration, orchestration and automatic provisioning, they are often forced to calculate departmental spend to ascertain what their entire business is spending on cloud purchases.

This problem presents an opportunity for brokerage vendors using a variety of different approaches — including quote-to-cash, open source enablement, service-centric and systems management — to help enterprises gain more control over and visibility into their entire IT environments.

TBR believes multicloud environments will continue to grow across the enterprise over the next five years, making cloud brokerage an ongoing opportunity for vendors.

The growing trend toward hybrid IT — any combination of cloud and noncloud assets that allows for the sharing and flow of data across workloads — and customers' desire for a single vendor to orchestrate disparate cloud and noncloud assets within enterprise and SMB IT environments help drive enterprise desire for cloud brokerage tools, platforms and services.

Thus, vendors looking to effectively compete must invest in acquiring or organically building out their armies of brokerage talent, tools and software to assemble brokerage portfolios ahead of the coming wave of adoption.

While the brokerage market originally emerged as a group of stand-alone startups targeting a specific set of customer pain points, large vendors are beginning to acquire pure play brokerage vendors to address customers' end-to-end hybrid IT needs.

Pure play brokerage vendors, such as those providing application performance monitoring and aggregation of cloud services, as well as those offering functions such as managed billing, are attractive acquisition targets. Niche brokerage firms, however, struggle to gain scale because they lack resources.

Being acquired by bigger firms helps these pure plays gain a larger customer base, as evidenced by recent activity in the market. TBR expects to see continued consolidation in cloud brokerage, despite the current, diverse array of vendor approaches to brokerage.