Companies seek security and control with
private and hybrid clouds while exploring GenAI’s potential
benefits, ISG Provider Lens™ report says
Cost concerns continue to guide U.S. enterprise investments in
private and hybrid cloud services, according to a new research
report published today by Information Services Group (ISG) (Nasdaq:
III), a leading global technology research and advisory firm.
The 2024 ISG Provider Lens™ Private/Hybrid Cloud — Data Center
Services report for the U.S. finds that many organizations facing
IT budget constraints caused by economic uncertainty are looking to
reduce their reliance on public clouds. Private and hybrid cloud
services often deliver the scalability and agility they need while
providing greater control over costs.
“Maximizing the return on IT investments is top of mind for U.S.
enterprises this year,” said Anay Nawathe, ISG cloud delivery lead
for the Americas. “This is shaping their private and hybrid cloud
strategies, including exploring how GenAI may improve
operations.”
In some parts of the U.S. cloud services market, enterprises are
signing more provider contracts but with smaller average contract
value, suggesting a continued cautious approach to outsourcing, the
report says. However, many companies are still transitioning to
private and hybrid clouds due to ongoing concerns about security,
performance, compliance, data residency and control over IT
resources.
Facing these issues, many enterprises are closely studying
potential investments in generative AI (GenAI) for cloud
management, ISG says. They are weighing the costs and benefits of
the technology with an eye toward insights, predictive analytics
and more intelligent automation, possibly enabling new revenue
models. However, this requires measuring the distance between
current high expectations for GenAI and future tangible
outcomes.
Private/hybrid cloud service providers continue to implement
other AI and ML features, which clients are seizing upon for
significant benefits, the report says. AI-based cognitive
capabilities and ML tools are helping to speed up service delivery,
improve IT efficiency and deliver improved user experience. By
gathering data from various sources to predict downtime and
initiate self-healing measures, AI and ML can minimize the impacts
of system failures.
Many enterprises seeking to shrink the footprints of their own
data centers are turning to colocation providers, which are
responding by expanding their facilities, especially in
tech-centric areas such as Seattle and Dallas, ISG says. Demand is
rising for high-density computing at nearby sites for low-latency
applications.
“Colocation facilities play a growing role in enterprise
computing capabilities,” said Jan Erik Aase, partner and global
leader, ISG Provider Lens Research. “Companies need reliable,
secure, and scalable infrastructure to meet changing IT needs.”
The report also explores other trends affecting private and
hybrid cloud services in the U.S., including the growing cost and
scarcity of AI processing resources and the impact of changes in
VMware licensing terms for enterprises and providers.
For more insights into challenges related to private and hybrid
clouds in the U.S., including potential repercussions from GenAI
and growing pressure to update or phase out legacy infrastructure,
plus ISG’s advice on these issues, see the ISG Provider Lens™ Focal
Points briefing here.
The 2024 ISG Provider Lens™ Private/Hybrid Cloud — Data Center
Services report for the U.S. evaluates the capabilities of 67
providers across four quadrants: Managed Services — Large Accounts,
Managed Services — Midmarket, Managed Hosting and Colocation
Services.
The report names Accenture (Navisite), DXC Technology, Ensono,
Kyndryl, and Rackspace Technology as Leaders in two quadrants each.
Capgemini, Cognizant, CoreSite, CyrusOne, DataBank, Digital Realty,
Equinix, Evoque (Cyxtera), Flexential, HCLTech, Hexaware, Infosys,
Mphasis, NTT DATA, NTT GDC, QTS, TCS, Unisys, UnitedLayer, Wipro
and Zensar Technologies are named as Leaders in one quadrant
each.
In addition, Microland and NTT DATA are named as Rising Stars —
companies with a “promising portfolio” and “high future potential”
by ISG’s definition — in one quadrant each.
In the area of customer experience, Green is named the global
ISG CX Star Performer for 2024 among private/hybrid cloud service
providers. Green earned the highest customer satisfaction scores in
ISG's Voice of the Customer survey, part of the ISG Star of
Excellence™ program, the premier quality recognition for the
technology and business services industry.
A customized version of the report is available from Park Place
Technologies
The 2024 ISG Provider Lens™ Private/Hybrid Cloud — Data Center
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.
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 AI and 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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version on businesswire.com: https://www.businesswire.com/news/home/20240715349462/en/
Press: Will Thoretz, ISG +1 203 517 3119
will.thoretz@isg-one.com
Julianna Sheridan, Matter Communications for ISG +1 978-518-4520
isg@matternow.com
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