Enterprises in the U.S. Embracing Multicloud Environments

ISG Provider Lens™ report sees a new focus from companies on tracking cloud spending and increasing efficiency while using multiple cloud services

Enterprises in the U.S. are increasingly embracing a multicloud operating model and are looking to cloud service providers to help them choose the right clouds for the right workloads, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2021 ISG Provider Lens™ Public Cloud – Services & Solutions Report for the U.S. finds enterprises also looking for support to operate their multicloud environments in the most efficient and effective manner possible—especially given the growing complexity of such environments. Today, enterprises are running on multiple clouds that need to be interconnected, integrated and managed, and they are turning to providers for help.

“Enterprises have recognized that moving to the cloud is beneficial to their businesses,” said Bernie Hoecker, partner and global leader of ISG’s enterprise cloud transformation business. “They are increasingly willing to approach managed services providers to help them move to the cloud in the right way and choose the right cloud for a specific workload.”

Demand for cloud-based services is surging in the Americas region, the 3Q21 ISG Index™ found. Annual contract value (ACV) for as-a-service solutions soared 51 percent in the third quarter, to a record $6.9 billion, the fastest growth rate for this segment since ISG began tracking it in 2014.

The U.S. report notes significant growth for cloud service providers in the past year, as more and more organizations turn to remote work during the COVID-19 pandemic. Most managed services are now virtually and remotely delivered, including cloud transformation and migration of workloads.

Cloud providers are offering a range of services to help customers with their public cloud adoption. This includes consulting services to formulate application transformation strategies and creating roadmaps that identify whether a workload needs a lift-and-shift transition or whether it should be rearchitected or replatformed to improve performance and reduce operating costs.

Increasingly, providers are entering into value-based deals in which benefits are shared between the enterprise and the provider, the report says. They are also embracing platforms and tools, such as AI and machine learning, to automate cloud operations.

Meanwhile, many enterprises are turning to cloud financial operations, or FinOps, providers to help them track cloud expenditures, as they use cloud resources in a dynamic and complex manner, the report says. Use of FinOps services has skyrocketed in recent years as cloud adoption has grown.

FinOps can increase the business value of the cloud by bring together technology, business and finance professionals with a new set of processes that help organizations efficiently monitor and track their cloud resources.

The report notes that many service providers have entered into strategic relationships with public cloud infrastructure providers such as AWS, Microsoft Azure and Google Cloud Platform. Both sides are working closely together to co-develop cloud offerings and have a joint go-to-market strategy.

Providers and hyperscalers are focusing on improving and strengthening security measures to help enterprises improve customer experience in a highly secure cloud environment. They are also sharing best practices to develop cloud solutions for faster migrations, improved efficiencies in cloud resource management and increased adoption of next-generation technologies.

Many cloud service providers are also investing to upskill their talent in the U.S., due to a shortage of skilled professionals in the market, the report adds. Service providers are working closely with hyperscalers and third-party training institutes to train and certify their employees in various cloud technologies.

The 2021 ISG Provider Lens™ Public Cloud – Services & Solutions Report for the U.S. evaluates the capabilities of 52 providers across six quadrants: Consulting and Transformational Services for Large Accounts, Consulting and Transformational Services for the Midmarket, Managed Public Cloud Services for Large Accounts, Managed Public Cloud Services for the Midmarket, Hyperscale Infrastructure and Platform Services, and SAP HANA Infrastructure Services.

The report names Accenture, AWS, Capgemini, Cognizant, Google, HCL, Hexaware, IBM, Infosys, LTI, Microsoft, Mindtree, Rackspace Technology, TCS, Tech Mahindra, Unisys and Wipro each as Leaders in two quadrants. Mphasis was named a Leader in one quadrant.

In addition, Mphasis, Navisite and NTT Ltd. were named Rising Stars—companies with “promising portfolios” and “high future potential” by ISG’s definition—in one quadrant each.

ISG has also published a related report covering providers of FinOps platforms serving the global market. The 2021 ISG Provider Lens™ Public Cloud – Services & Solutions global report evaluates the capabilities of 13 providers in one quadrant: Multicloud FinOps Platforms.

The global report names Apptio (Cloudability), Flexera, NetApp (Spot) and VMware (CloudHealth) as Leaders in the quadrant. HCL (MyXalytics FinOps) was named a Rising Star in the quadrant.

Customized versions of the U.S. report are available from AWS, Hexaware, Navisite and Unisys.

The 2021 ISG Provider Lens™ Public Cloud – Services & Solutions report for the U.S. and the 2021 ISG Provider Lens™ Public Cloud – Services & Solutions (Multicloud FinOps Platforms) global report are available to subscribers or for one-time purchase on the ISG website.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Germany, Switzerland, the U.K., France, the Nordics, Brazil and Australia/New Zealand, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

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