The Next Twitter Will Be a Cloud Services Broker

NEW YORK (TheStreet) -- Cloud is the computing story of this decade.

Excitement over cloud keeps moving back and forth between technologies that improve it to services and software built on it.

Rackspace (RAX), RedHat (RHT) and VMware (VMW) are examples of the first. Facebook (FB), LinkedIn (LNKD) and now Twitter (TWTR) are examples of the second.

Both sides keep pushing one another forward. New possibilities are not only seized by the services, but new requirements are imposed. The requirements drive the creation of new solutions, which, in turn, create new possibilities.

The new possibility being created today goes by the name "hybrid cloud." The idea was you would have public clouds, at dirt-cheap prices, connected to private clouds where you kept the corporate jewels.

But hybrid cloud hasn't worked out the way its sponsors, including IBM (IBM) and Hewlett-Packard (HPQ), hoped it would. Instead, customers want the prices they get from Amazon.com (AMZN), along with more reliability, flexibility, capacity, and just plain more.

The result is a new type of cloud company, the Cloud Services Broker, or CSB. Through software, infrastructure, consulting and arbitrage, a CSB promises customers the best pricing for all their cloud computing needs.

Think of CSBs as a cloud sales channel, like the ones that grew up in the wake of the PC 30 years ago. Stores grew into superstores, or Value Added Resellers, or distributors, depending on what customers they were targeting and what those customers needed.

Gartner Group has been talking up the idea for three years, seeing a $100 billion global market as early as next year, and defining that market broadly.

Gartner sees a CSB market with its own "Golden Quadrant" of leaders and laggards, its own hype cycle, and with a host of opportunities within organizations, creating a buy side equivalent to the brokerages' sell side.

I think the Gartner analyst to know here is Daryl Plummer, a former data center manager now based in Woodstock, Ga., an Atlanta suburb. His October 2010 piece, Cloud Services Brokerage is Built on Markets Near $1 Trillion in Spend, can be seen as the starter's pistol of the new game.

These companies have names like Jamcracker, ComputeNext, Appirio, Gravitant, and Cloud Sherpas. Some partner with specific clouds. Others see themselves as marketplaces. Some are consultants. Still others see themselves as offering software that lets customers arbitrage cloud from a variety of companies.

In addition, TalkinCloud.com notes, many cloud vendors offer their own cloud brokerage services and software, including Amazon's AWS Marketplace, Comcast's (CMCSA) Upware, and Rackspace's Cloud Tools Marketplace.

What's clear is they're all growing like topsy. MarketsandMarkets, which defines the market conservatively, sees it growing from $1.57 billion this year to $10.5 billion in 2018, a compound annual growth rate of 46%

What happens next is an often-told story featuring globalization, consolidation and the tapping of public markets to raise capital. You can also expect big players like IBM and HP, which missed the start of this game, to muscle their way in, partly through their own efforts, partly through acquisitions, in order to keep their customers.

This game is already afoot. It's just a matter of time before these companies start calling Wall Street and Wall Street starts calling back. It won't be as exciting as the Twitter IPO because these are business-to-business companies. But it could prove even more profitable.

At the time of publication the author owned 117 shares of IBM.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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