Cloud computing grabbed the attention of the global enterprise economy in 2014 even more than in years past. Seasoned organizations and startups alike turned to the cloud to not only host their infrastructure and store data, but to also grow their businesses with new applications and services.

Analysts agree that cloud’s momentum will continue to build in all areas, from software, hardware, and IT outsourcing to the nurturing of innovations. Forrester Research projects the public cloud market will reach $191 billion by 2020, more than a 300 percent growth from 2013’s total of $58 billion. Cloud applications lead the pack with an expected $133 billion in 2020 and Forrester anticipates cloud platforms will generate $44 billion in revenue by 2020 and cloud business services will bring in $14 billion.

“Cloud is a hot trend … and it’s a real trend,” says Daryl Plummer, Chief of Research for Cloud Computing at Gartner Inc., VP, and Gartner Fellow. “It’s going to keep getting bigger, and for that reason, companies want to take advantage of it and are beginning to understand how to take advantage of it—and that’s when they need help finding the right service.”

This is especially true when the pool of options is as vast and deep as the global cloud market.

With today’s executives opting to consume technology through self-service delivery methods, technology companies are presented with the opportunity to establish cloud marketplaces that elevate some of the pressure of navigating through providers and services.

Over the last few years, the number of cloud marketplaces has grown exponentially—with Amazon, Oracle, Dell, Microsoft, Cisco, Google, Verizon, RackSpace, CenturyLink Savvis, IBM, and others offering cloud services. Plummer says these marketplaces are just the start—the lowest hanging fruit of a much bigger opportunity. Cloud services brokerage, a term coined by Gartner, speaks to this growing trend in a way that breaks out the different kinds of service providers: aggregation brokerages, integration brokerages, customization brokerages, and governance for management brokerages.

Marketplaces typically fall under aggregation brokerages—a slight step above catalogues, but not quite the buying and selling strategy that Apple and Google have achieved with the app stores. These general purpose marketplaces bring together various kinds of services—infrastructure, software-as-a-service (SaaS) applications, and mobile, among others.

“Most of the cloud marketplace vendors have yet to get it right,” he says. “In fact, they could take a lesson from the app stores.”

While demand is high, marketplaces are still in an infancy stage and have a long way to go to fully embrace client needs. The race to the top of the cloud marketplace food chain is on, and at this point it could be anyone’s game.

The IBM Cloud marketplace fosters innovation and adoption
In 2014, IBM entered the mix of companies that have taken a solid first step into the cloud marketplace market—and it’s still too early to tell who will do it the best, says Plummer, who is also a lead analyst for IBM at Gartner.

Marketplaces have potential to hold a lot of value. Organizations that plan to take advantage of the cloud will not stop at just one service, but will likely need hundreds of services over the coming years as more parts of the enterprise realize the benefits of the cloud. The ability to cut down the vetting process gives organizations a jump start on projects that could have potential to drive business, lower costs, and beat out competition.

Today’s marketplaces are searchable databases that offer a number of options for companies to browse. IBM launched its cloud marketplace in April 2014 with about 200 services from both IBM and third-party vendors and quickly grew that number to nearly 400 services between IBM’s Bluemix platform, SaaS applications, and services built on SoftLayer.

“Our marketplace is a journey,” says Nancy Pearson, CMO, IBM Cloud. “It started with getting services of IBM and third parties in there and improving the experience, but the reality is we are really looking to make this experience something where we can provide really unique differentiation to new buyers; it’s new buyer focused.”

Marketplaces can also act as hubs for innovative services and emerging technologies. Just as an example, machine-to-machine (M2M) analytics is one industry that is building momentum.

According to a forecast from ABI Research, this industry will increase, in the United States alone, from $1.9 billion in 2013 to $14.3 billion in 2018.

A Silicon Valley-based enterprise software company, M2Mi Corporation, joined the IBM Cloud marketplace last spring to host its machine-to-machine intelligence platform and take advantage of the marketplace’s potential to target new clients.

The platform connects the Internet of Things (IoT) to M2M technologies, then analyzes it, supplies end-to-end security, automates it, and makes the data useful for businesses to draw insights that turn into actions. M2Mi’s relationship with IBM started when the platform moved to the cloud last spring. Through IBM SoftLayer, the company is able to offer its platform as a SaaS offering to allow customers to test drive IoT and M2M deployments in the cloud to cut costs.

“If you can do a test bed in the cloud initially, it helps a customer really determine what their goals are with an emerging technology like IoT,” says Dr. Sarah Cooper, Vice President of Business Development for M2Mi. “Many customers have some ideas, but may not have the confidence that they know exactly what they want and what they can do with it; SaaS helps us move that. In addition, IoT is an area where a lot of our customers don’t have large IT departments. They have some development and operational folks, but when they look at connecting all of the devices to get this real-time information and be able to make real-time decisions on that, they don’t really have the skillset to manage the entire operation. To have something that they can put in the cloud, allows them to take advantage of all these innovations and stay competitive without having to build an entire organization around that.”

In the IBM Cloud marketplace, M2Mi gains a wider audience, offers clients 30-day free trials, and reaches developers who want to come in and build real environments in Bluemix, explains Cooper. This year, the VP plans to expand the company geographically to increase availability to every SoftLayer data center. She also hopes to see IBM’s marketplace grow.

“We are looking to be able to work with other vendors within the marketplace,” Cooper says. “One of the challenges around IoT and M2M is we have a platform of platforms. We wrap a lot of services together, and we do the automation and integration for IoT. The marketplace provides potential to collaborate to bring together a total solution for an end customer.”

The race to the top: Where does IBM stack up?
Because the tech market is already saturated with cloud service providers, a challenge is to stand out, says Plummer, and the race is just beginning.

“In 2014, companies realized that marketplaces were interesting. In 2015, they will begin to show that they can actually deliver something of value to customers consistently through it. It won’t be until 2016 or ‘17 that we’ll know who the real winners and losers are.”

As seen with the mobile app stores, marketplaces take years to gain critical mass and achieve the desired amount of recognition. “If you have a marketplace, you have to be at least as popular as the Apple App Store and maybe as popular as eBay and Amazon.com,” says Plummer.

In IBM’s case, they just aren’t there yet—and advertising the marketplace adequately is the first step. “IBM has really got to put some money and strength behind marketing the marketplace,” he says. “You see commercials about Google Play, you see commercials about, ‘There’s an app for that,’ but you don’t see these [IBM] marketplace advertisement campaigns, and therefore, most people who need to use it don’t even know it exists.

“I think they are making a good effort here, however,” he continues. “They are learning as they go. They [came out] in a proactive way; just maybe they are not bold enough. It’s going to take some time.”

IBM does, however, have an advantage with its Bluemix platform-as-a-service. Gartner says the next step for marketplaces is to transform from aggregation to integration—in other words, make services work better together.

“If I control the marketplace and I can also provide a platform like Bluemix where you can integrate services to build new solutions, that’s a pretty powerful mixture,” says Plummer. “The marketplace becomes the door into a whole new world of business.”

That’s exactly where IBM plans to take its marketplace in 2015, Pearson explains. “Our marketplace is really about digital engagement, and we are building it out to really be a learning laboratory where companies can find and follow their paths to industry leadership and they can also then leverage technology that helps them accelerate their digital transformation.”

Still room for improvement: A marketplace of the future
Only a year old, the IBM Cloud marketplace is still just scratching the surface of what it could offer, but it has also grown in features since its launch at IBM Impact 2014 last April. Billing capabilities have been added and adjustments made to the navigation and user experience based on real-time analytics and an understanding of buyer interests. Content has also deepened and this is an improvement area IBM will carry into 2015.

“We’ve introduced ‘solution scenario’ pages that combine both IBM and third-party capabilities within a context, such as gaming, startup, DevOps, analytics, and mobile; so we plan to continue to build solution scenario pages based on buyer need and interest,” explains Pearson.

Cooper hopes that, in the future, IBM will provide a contractual mechanism where IBM Global Services is able to sell a mixed vendor solution set easily and that all of that happens on IBM paper. “We are hoping to enable IBM to actually do some sales of the M2Mi platform as well,” she adds.

Cooper would also like to see work done to better categorize the marketplace to make it easier for customers to find services and to also assist vendors to write a well-written description to help them distinguish from each other and eliminate customer confusion.

It’s these kinds of improvements Plummer says will make marketplaces successful—the ability to provide, not just a list of services and descriptions, but also methods for companies to compare what the different services can do and to learn their capabilities, their prices, and who else has used them. Further, not only help find the right services and share experiences and best practices with others, but also provide a mechanism to procure the services and supply companies with integrated solutions composed of helpful services, he adds.

2015 will also bring a higher concentration on the delivery of both commerce and expertise.

“We believe it should be an environment that helps to reshape professions and transform what professionals accomplish,” Pearson says. She explains that knowledge materials and interaction with experts will bring the marketplace to the next level. “We talk about it as a laboratory and a library, where we are sharing tools and methodologies for buyer proficiency. That is ultimately what we want to be included in the experience.”

The emergence of cloud computing has brought millions of companies and services to the market, and much like the rise of Google, there will be a marketplace that outpaces the rest.

“Google Search is what made Google capable of doing all the things it’s done,” notes Plummer. “Without a great search engine, how would we navigate the Internet? Google solved that problem more than AltaVista before them, and they’ve kept their distance ahead of Bing and other contenders. Now, with cloud computing, you have services cropping up everywhere with no way to categorize, to locate, to interact with, to get information about, or to procure those services. The company that wins that battle, if anyone does, has a massive opportunity to collect the eyeballs of every consumer of cloud services.”

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