What is Happening?
By 2020 more than 35 percent of enterprise workloads will be on hybrid clouds, and nearly one-third of those will reside on the public cloud, according to ISG analysis. This surge in public cloud adoption reflects a shift in preconceptions around security and reliability – and more CIOs now have a mandate to improve agility and contain costs using public cloud services. We see more and more enterprises not only implementing a cloud-first approach, but also planning to gradually withdraw from running on-premises IT environments wherever it makes business and technical sense.
The ISG Provider Lens™ Quadrant research study on Cloud Services for the U.S. market, to be published the week of Dec. 4, will aid enterprise IT leaders to assess public cloud providers in several typical environments. The report builds on insights from ISG’s engagements with enterprise user clients, complemented with our evaluations of IT services providers’ public cloud offerings around infrastructure and application management and their market presence. The results for each are plotted in the typical Provider Lens™ quadrant format as illustrated in Figure 1.
Figure 1: Public Cloud Infrastructure Managed Services – U.S. Source: ISG Research, 2017.
The quadrant in Figure 1 is one of six quadrants that are included in the full report. This quadrant presents our positioning of providers offering ongoing management and support services related to public cloud infrastructure offerings. Support for Amazon Web Services, Google Cloud Platform and Microsoft Azure was considered key in our evaluation.
ISG’s Provider Lens quadrant model positions IT services providers as follows:
- Leaders are the most appropriate set of providers to cater to enterprise client needs as identified and described in the report.
- Product Challengers have a very attractive portfolio of services, but are limited by their competitive strength.
- Market Challengers possess competitive strength, but need to improve portfolio attractiveness.
- Contenders need to work on their portfolio attractiveness as well as their competitive strength.
- Rising Stars didn’t make the Leaders quadrant, but demonstrate significant traction in either competitive strength or portfolio attractiveness.
Please note: Featuring a provider on a quadrant indicates that ISG considers that provider to be a relevant player in the market, irrespective of its relative positioning.
The evaluation parameters and rating criteria for each quadrant are developed from ISG analyst and advisor experience with large enterprise IT and business organizations. The data regarding service provider capabilities comes from focused surveys, briefings and interviews with providers, input from ISG advisors, ISG benchmarking data, the ISG Contracts Knowledgebase, ISG Engagement database, and secondary research.
This ISG Provider Lens™ Public Cloud Services quadrant report leverages all of the above to provide objective analysis of service providers’ positioning in public cloud consulting, managed services, brokerage, Infrastructure as a Service, SAP services, and Unified Communications as a Service quadrants.
Why is it Happening?
With an increasing focus on the “transform” aspect of IT operations rather than the “run” aspect, enterprises are treating hybrid as the new normal. While the on-premises component in the hybrid model is still predominant, the public cloud component is expected to increasingly become mainstream. Some large enterprises have taken a lead in migrating a considerable portion of their IT footprint, which has led to new use cases.
As noted in the report, ISG analysts see several trends affecting the adoption of public cloud infrastructure, applications and related services. These include the following:
- Public clouds are not viewed as commodity services. Providers strive to offer distinct value propositions that appeal to different use cases. Enterprise IT organizations now view the public cloud not just as a mechanism to reduce cost but also to increase developer productivity, improve responsiveness to business requirements, and improve service to end users.
- Consulting services providers mitigate migration complexity. Migrating to public cloud requires a detailed assessment of the business, and a technical analysis of each application. The option of using a consulting and migration services partner is attractive to enterprises that lack skills and experience in this area. Moreover, public clouds, with their plethora of features and services, are complex systems – enterprises are looking for some handholding to navigate the complexity.
- Tools for unified view of operations. Cloud managed service providers and third-party vendors have been developing monitoring and management tools that act as an overlay on silos of infrastructure across on-premises, hosted and multi-cloud environments. These tools provide an enterprise with the ability to manage a hybrid environment using a single pane of glass. This functionality is enabling several enterprises to embrace public cloud environments by overcoming management and operational challenges.
- Managed service providers help optimize operations. Enterprises typically lack the needed level of analytics and insights needed to optimize cloud use across a variety of operational areas. Service providers are also educating clients on the importance of refactoring applications to exploit public cloud benefits. Some leading service providers are upgrading their configuration management to manage public cloud infrastructure using code rather than doing it manually or through a GUI. This is setting the stage for more enterprises to adopt a DevOps-oriented (continuous integration and continuous delivery) approach to application delivery.
- Rapidly evolving capabilities for enterprise workloads. The market is moving away from commodity systems towards as-a-service models. This shift is driving provider attention toward public cloud alliances, certifications, acquisitions and partnerships that enable and optimize large-scale application workloads (e.g., SAP).
Net Impact
With hybrid IT becoming the norm, enterprises are seeking advice and guidance on moving digital business applications with unpredictable workloads to public clouds while the mission-critical applications with predictable workloads remain on-premises. Traditional IT service providers and system integrators are setting up massive reskilling programs, because managing the public cloud requires cloud-provider-specific expertise. Some pure-play public cloud consulting and managed service providers have taken a lead in developing this expertise – however, they tend to have limited capabilities in managing hybrid cloud environments. We believe many of these are potential acquisition targets.
Hybrid complexity means that enterprise clients will increasingly look for consulting and managed services providers with deep expertise around automation, orchestration, and machine learning capabilities. Most service providers have begun to create front-end and back-end platforms for provisioning, monitoring and managing IT operations in an integrated fashion. While key differentiators for IaaS providers will increasingly be around consistent performance and API functions, consulting and managed services providers will seek to differentiate through their abilities in leveraging cloud-native features, creating best-in-class cloud management platforms and developing solutions for enabling DevOps environments.
This report is not meant to rank providers or to assert that there is one top provider whose abilities can meet the requirements of all clients. It presents ISG’s objective assessment of provider capabilities, market presence, and track record relative to current market requirements.
To obtain a full copy of the report, contact ISG at ISGLens@isg-one.com or call +1.203.454.3900. Clients of ISG Insights subscription research services will see further analysis and insights from this and other, future ISG Provider Lens studies.