U.S. Firms Seek Multiple Public Clouds for Power, Agility

Multi-cloud strategies maximize enterprises’ cloud benefits but add complexity, increasing demand for services, ISG Provider Lens™ report says

Demand for public cloud computing and associated services in the U.S. has remained strong over the last four quarters as more organizations digitize business operations and require high-performance computing for business-critical workloads, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2023 ISG Provider Lens™ Multi Public Cloud Services report for the U.S. finds cloud demand is driven mostly by the requirements of application modernization and AI and ML tools running increasingly complex algorithms and processes. Enterprises are using these technologies to reengineer legacy IT infrastructure, and are turning to service providers for expertise in digital transformation and optimal use of public cloud resources.

“Companies need efficient, scalable computing resources without significant upfront investment,” said Bernie Hoecker, partner, Enterprise Cloud Transformation leader, ISG. “Service providers are helping them realize those benefits through public clouds.”

Most U.S. enterprises that have adopted public clouds work with more than one hyperscaler, which allows them to take advantage of the strengths of each and avoid vendor lock-in, ISG says. This makes cloud implementation and use far more complex, so a growing number of companies are engaging with service providers for their multi-cloud expertise. The overall cloud services market in the U.S. has grown by approximately 50 percent over the past year, a rapid pace despite being only half the global growth rate.

More companies in the U.S. have begun migrating their workloads to the cloud using cloud-native technologies, which take full advantage of the cloud environment, the report says. Instead of moving applications to the cloud largely unchanged, in a “lift-and-shift” strategy, enterprises are breaking them down into microservices, packaged in containers. This approach offers better scalability, agility and resilience, and service providers are building up their practices for helping clients develop cloud-native strategies.

FinOps is becoming a standard requirement as cloud costs rise, ISG says. To eliminate cloud waste and align cloud investments with desired business outcomes, enterprises have a growing need for visibility and control of their cloud use across all departments.

Public cloud managed services have been adopted by a larger share of large enterprises in the U.S. than in any other region, and the market continues to grow steadily, the report says. The complexity of multi-cloud management is driving more firms to seek services. Adoption of managed services by midmarket enterprises is growing even faster, because more of those companies are turning to cloud-native application development.

“More companies, large and small, are experimenting with different combinations of cloud technologies,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “They are willing to take risks to become more agile, and service providers are helping them reach that goal.”

The report also explores other multi-cloud services trends in the U.S., including the rise of AIOps and continued growth and improvements in SAP HANA migration services.

For more insights into multi-cloud challenges facing U.S. companies, including complex choices between cloud migration strategies, along with advice on how to move forward, see the ISG Provider Lens™ Focal Points briefing here.

The 2023 ISG Provider Lens™ Multi Public Cloud Services report for the U.S. evaluates the capabilities of 57 providers across seven quadrants: Consulting and Transformation Services for Large Accounts, Consulting and Transformation Services for Midmarket, Managed Services for Large Accounts, Managed Services for Midmarket, FinOps Services and Cloud Optimization, Hyperscale Infrastructure and Platform Services, and SAP HANA Infrastructure Services.

The report names Accenture, HCLTech, Rackspace Technology and Wipro as Leaders in three quadrants each. It names AWS, Capgemini, Deloitte, DXC Technology, Google, Hexaware, Infosys, Kyndryl, Microsoft, Mphasis, Navisite, TCS, Tech Mahindra and Unisys as Leaders in two quadrants each. Cognizant, IBM and UST are named as Leaders in one quadrant each.

In addition, Capgemini, Microland and Persistent Systems are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

Customized versions of the report are available from Hexaware, Navisite, Randstad Digital and Unisys.

The 2023 ISG Provider Lens™ Multi Public Cloud Services report for the U.S. is available to subscribers or for one-time purchase on this webpage.

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., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, 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 900 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 1,600 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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