Are you a managed service provider or a cloud broker? Sounds like a simple question but it occurred to me that some people out there may be confusing these two unique, and rarely overlapping business models.
Cloud Broker
A cloud broker is a company that resells a cloud application or solution belonging to a 3rd party service provider. Cloud brokers typically add some minimal "value add", usually in the form of a invoicing and initial point of contact for the customer. Cloud brokers, however, do not usually touch anything on the infrastructure. In the strictest definition of the word, they are not service providers, but rather brokers or agents of another service provider they represent. Think of them like VARs (Value Added Resellers) for cloud.
MSP/CSP
A managed service provider (including cloud service provider) can resell other hardware, software, and even services, but they generally do have service offerings that are uniquely their own. What these services can be is as diverse as the MSPs themselves. The important point to remember is that a MSP typically has a much closer relationship with the customer than a broker. The trust placed in a MSP is also much higher than that of a broker.
Which is better?
This is a matter of opinion, but let's stick to the facts, Both brokers and MSPs play unique roles in the IT channel ecosystem. While brokers take on less risk, MSPs usually have much higher margins for the services they sell. It all comes down to the services you need and whether you are comfortable dealing with a broker.
For some customers, dealing with a public cloud vendor can be like getting lost in the big crowd. There is no personalization or intimacy involved in the relationship. For that reason a client may choose to use a broker to have a familiar voice with whom to deal. MSPs have been making this claim for many years, which is one of the reasons so many companies decided to stop being VARs and move into managed services.
I suppose the real purpose for this article is to inform the customers out there. It is important for them to understand the differences between cloud brokers and MSPs so they can make an informed decision.
