Little room for the middleman

Cloud service brokers promise one throat to choke and a unified delivery of cloud services. Is there room for them in SA?

Paul Furber
By Paul Furber, ITWeb contributor
Johannesburg, 15 Jul 2014
Ntombi Macozoma, Sentech.
Ntombi Macozoma, Sentech.

The challenges of IT may have come full circle. In the early days of corporate computing, a key enterprise IT frustration was catering for disparate systems - PC, mainframe, minicomputer, LAN - using different standards and different platforms, none of them speaking to each other and each living in their own little islands of information. In 2014, history has repeated itself. Despite the increasing ubiquity of cloud computing, today's CIOs face an uphill struggle in unifying the huge variety of cloud platforms, APIs, solutions and products erupting across their organisations.

Many organisations are using cloud in one form or another. Mervyn Govender, CIO of Dev-X, says his company uses Amazon Web Services for its Web back-end because it is scalable.

"For what we needed when we started two years ago, they were the only guys around."

David Motlafi, chief director for programming and applications at the Gauteng Department of Finance, has the province's e-mail in the cloud.

"The issue was that we experienced difficulties hosting our own e-mail in the cloud - we didn't have failover or archiving or DR - so this allowed us to have DR as well."

Chandima Miyanadeniya, CIO of AON South Africa, went to the cloud to solve the company's messaging and collaboration challenges.

"The challenge, though, was integration," he says.

Stephen Bosman, MD of Melrose Atteridge, says one of the areas he's seen cloud becoming attractive, both for South African branches of multinationals and South African companies themselves, is for those looking to move into Africa.

"The challenge of course is integration, if you want to mash up a bunch of services, and that's possibly where a broker would come into play, or an integrator."

When you buy a car on a service plan, do you want to own the mechanic every month?

Stephen Green, executive for data centres and cloud Dimension Data.

How does today's CIO pull together the array of cloud services available into a cohesive offering? In the US, the rise of cloud services brokers (CSBs) has been meteoric. Just as in some markets such as insurance, where a middleman can assist customers to select and consume products more easily than they could do it themselves, CSBs claim to make using cloud services easy, either by aggregating services at scale or by offering integration or customisation options. But there's a problem for the local CSB, explains Mark Beekhuizen, CIO of Brait.

"Cloud service broking is not a well-structured business in South Africa and there are very few companies that offer it. Those that do are trying to make margin from both ends: the vendor and the customer, and that out-prices the system. Also, people are not keen to buy services that they can't control. And in South Africa, because of regulations like the POPI Act, people would rather buy direct because then they can control where the data is hosted."

Simon Hudson, director of services at ECS Africa, agrees.

Wernher Eksteen, Helios IT Solutions.
Wernher Eksteen, Helios IT Solutions.

"There's a lot of truth in the statement that CSBs are taking the mickey on both sides. But a CSB should add value in terms of guidance and pointing their clients in the right direction if they're going to be justifying the fee that they're going to be charging over and above what something like AWS costs."

Jonathan Ment, Dimension Data's lead cloud architect for MEA, says by its very definition, cloud implies self-service, on-demand.

"Is there a place for a CSB in this kind of world?" he asks. "Perhaps there is a place as a broker for the software layer, but the lower layers should be self-service."

Stephen Green, executive for data centres and cloud at Dimension Data, says he sees his business as being a CBS of sorts.

"Our traditional business was integrating standalone business systems in the data centre. Today, we see our business as being a CBS: we're integrating various cloud offerings, working with Microsoft on Azure and SQL in the cloud. When you buy a car on a service plan, do you want to own the mechanic every month? IT shouldn't be trying to keep the lights on. It should be taking the 70% of its budget that it uses to provide platforms for the business to operate on; it should be moving to a consumption-based business model through right-sizing.

"We say to our clients: let us take care of your plumbing on a reputable platform through cloud and you go and do what business is asking you to do. There is a maturity coming in to the market."

The shadow IT challenge

Brait's Beekhuizen says the CSB model is based on two primary advantages for the client.

"One is aggregated billing - you get one bill for everything - and the second is control: you elect which users can use a product set. But if aggregated billing doesn't provide a price advantage, then customers will wonder whether it's worth it. And secondly, the acceleration into the cloud is because business leaders are bypassing IT and go straight and buy the cloud services directly. If there is a CSB that says 'you can't use Salesforce, you can only use Microsoft CRM', then a business executive is going to pull out his credit card and buy Salesforce."

The big cloud providers skirt around Africa as if it was a leper.

Andile Swartbooi, CIO, UJ.

In fact, the social and personal aspects of letting go of some aspects of IT still have a disproportionate influence in the local market. Comments Werner Eksteen, lead technical engineer at Helios ITS: "In South Africa we still have a lot of room for growth. A lot of companies are scared to embrace cloud because they feel it is pie in the sky and they'd rather control things. You do need to look carefully at what you're doing. What is my bread and butter? If something isn't your core focus then you should ask whether you can offload it to the cloud."

Mervyn Govender, Dev-X.
Mervyn Govender, Dev-X.

Thabo Ndlela, chairman of Westcon Group and former CIO of Sun International, says he thinks CIOs are conflicted about CSBs because they are providing the services that are expected out of an IT department.

"Today, the business has a lot more trust and faith in Google than the guys downstairs. Cloud is here and coming and can't be stopped. So, either CIOs play a role in the business or they're going to be irrelevant. The brokers will emerge as the new CIOs to go between what the business wants and what services are available."

ECS Africa's Hudson says it's preferable to get away from all the operational nonsense as a CIO.

"It should live with the service provider. And the CIO's job is going to change: it's going to live at the intersection between technology and the business, and if they're going to go to a cloud service broker, they will have to have the business knowledge and architectural insight if they're expected to replace the CIO."

Andile Swartbooi, CIO of the University of Johannesburg, thinks CIOs - and IT in general - regard cloud as a friend rather than a foe.

Yemi Oguntade, Cummins Africa.
Yemi Oguntade, Cummins Africa.

"If you migrate some of your services into the cloud, it frees up your services and resources so that you can deploy them into the critical areas of business. I don't think an IT department should see that as something to be scared of. I think the biggest issue is the proper management of risk. If you're running critical applications and a constant complaint is slow response time, then you're going to feel disempowered. And if you look at the big cloud providers, they skirt around Africa as if it was a leper. If they don't have confidence in this continent, how can you have it placing your core applications? I've moved UJ's e-mail into the cloud, but before I could do it, I had to validate the SLAs and the response times."

Gerrit Geertsema, business development manager at Cisco, says a survey done by Cisco confirms IT's love of the cloud.

"Last year, Cisco did a survey of 4 500 IT leaders across the globe and they like the cloud. But 75% of them said that the role of the CIO will change into a cloud service broker. We're talking about them as vendors, but we also need to look at our roles, deciding what to keep in-house and what to move to the cloud."

CIOs are already becoming more of a broker of services than many would like to admit. One of the major changes is how to guarantee the company assets are no longer under their direct control.

Andile Swartbooi, University of Johannesburg.
Andile Swartbooi, University of Johannesburg.

"I asked one big cloud provider what was the assurance it gave for data loss, data breach or data corruption," says AON's Miyanadeniya, "and the answer I got was quite startling: one year's subscription. But company's data is lifeblood and if you lose it, then it's the end of the company. I see a big gap between what you can get from the vendor for loss and what your real liability is to your business. Insuring it is a big opportunity."

Motlafi says he does not think the role of the CIO will fall away.

"We have outsourced our data centre to a full managed solution. But our e-mail is already outside the organisation, hosted by someone else, and I'm looking at how someone else could look after our business applications."

Mohamed Ganie, enterprise architect at Armscor, says CIOs' roles won't go away at all.

"The role of the CIO is to make sure that the information is available, accurate, timely and secure so that a business can run. How he does it will change. Why he does it won't."