Cloud integration brokerage services mature

Gartner estimates annual spending for this category at more than $1.5 billion. Liaison Technologies is one of three companies it designates as a Leader in its latest Magic Quadrant.
Written by Heather Clancy, Contributor

Although some businesses hate the word "broker" or "brokerage," the need for integration hubs and frameworks that orchestrate interactions between cloud services and legacy infrastructure continues to grow.

It's a healthy maturation that research firm Gartner believes will inspire plenty of innovation — and consolidation — among what it calls cloud service brokers over the next two years. Gartner's prediction, in fact, is that at least 20 percent of the ones that exist today will either exit the market or be acquired. So, proceed with cautious.

"What we're seeing is that interest is growing very quickly," said Daryl Plummer, vice president and Gartner fellow, who follows the cloud integration segment.

There are two distinct sorts of cloud brokerage conversations most businesses will need to have, Plummer said.

One involves defining the strategy for working with external service providers that have developed ways to connect multiple software as a service (SaaS) applications. The other focuses on creating the grand orchestration scheme that ensures external cloud services (of whatever flavor) play well with legacy infrastructure and applications.

The role of cloud brokers has morphed dramatically in the past 10 years, when Gartner began documenting the rise of what it then called "integration service providers" but now describes as "integration brokerage" companies. (It follows three types of cloud service brokerage roles, including aggregation brokerages and customization brokerages). Currently, more than one million companies use integration brokerage services, Gartner estimates in its latest Magic Quadrant for Integration Brokerages published in early April 2014. It believes spending for the category will rise at a compound annual growth rate of 15 percent.

According to the report, characteristics of these providers include:

- Scalable integration project implementation and managed service fulfillment capacity

- A network (often global) providing multilateral ("connect once, connect to all") communication between and master data across a "consolidated community" of trading partners, cloud service providers, connections to mobile and Internet of things devices, and interconnects to other B2B networks

- A multi-tenant, cloud-based technology stack – at times (not always) a form of integration platform as a service (iPaaS) – to operate its B2B network, including scalable, secure communications; messaging and data transformation; application service governance; and community portals and collaboration

There are currently three companies positioned as "Leaders" on Gartner's Magic Quadrant for this category: IBM, GSX, and Liaison Technologies. That's actually only half the number of companies that were in that quadrant back in 2009. I spoke with Liaison Technologies several weeks before the report was published. Among its strengths are a large B2B network (with 160,000 trading partners) and the capacity to handle large complex projects. It has a particularly strong presence in the healthcare and life sciences vertical (in part because of a $65 million investment by Merck Global Health Innovation Fund).

By its own count, Liaison Technologies serves approximately 7,000 customers in 46 countries. It has invested close to $250 million in infrastructure across six data centers to help businesses get beyond migration to a place where their cloud applications are more tightly integrated with their overall infrastructure, said Rob Consoli, senior vice president of marketing for Liaison Technologies.

"Every company that is doing integration within the cloud will need to do this themselves or hire someone to do this for them," Consoli said.

To illustrate Liaison Technologies' approach — one built out through the company's own patented technology and at least nine different strategic acquisitions — consider its work for Mohawk Fine Papers, a North American paper manufacturer. As it began working with more external suppliers and moving more of its infrastructure to cloud services, Mohawk realized it needed a service-oriented architecture (SOA) to orchestrate interoperability among its internal and external applications, not just for its own team but for customers and business partners.

The result is an integration solution that spans 24 applications and includes direct links to about a dozen cloud providers including Amazon, Birst, Kronos, StrikeIron (which is another cloud service broker), SugarCRM, and Mercury Gate.

The solution is used to manage connectivity with hundreds of external e-commerce business partners. For example, the Liaison platform can receive purchase orders from trading partners, translate using data maps, and then deliver them into the internal order entry application.

Liaison's approach has reduced time to deployment for new integration work, and reduced overall related project costs by 30 percent, according to a case study published about the relationship.

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