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Enterprises Look to Multi-Cloud Environments to Counter Technological Disruption

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ISG Provider Lens report finds businesses worldwide interested in the public cloud, but encountering several challenges

Enterprises across the globe are embracing multi-cloud environments, with more than half of all public cloud enterprise customers using more than one cloud provider, according to a new report published today by Information Services Group, a leading global technology research and advisory firm.

The 2020 ISG Provider Lens Public Cloud Solutions and Service Partners Archetype Report finds enterprises still seeing some barriers to a multi-cloud setup, despite growing demand. Orchestration in the public cloud is a challenge, because it requires a complex setup, and many users still find it difficult to manage multi-cloud environments.

Vendor lock-in concerns and cloud provider interoperability are other challenges, the report adds.

Still, many enterprises are finding it necessary to move to the public cloud, the report says. “Enterprises are realizing they are not immune to the disruption caused by advancing technologies,” said Jan Erik Aase, director and global leader, ISG Provider Lens Research. “They see that they must have a strategy to compete in the modern marketplace that is driven by tech-savvy consumers.”

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The digital journeys of enterprises require next-generation public cloud infrastructure with new-age applications that are flexible, agile and user friendly, the report suggests.

The report finds the public cloud managed service provider ecosystem has been growing. Early entrants have an advantage, but small and mid-sized providers are gaining traction with their unique offerings of public cloud managed services for multi-cloud environments.

Several smaller providers are being acquired by large system integrators to either eliminate the competition or to acquire unique capabilities or client segments, the report adds. Consolidation in the MSP market will continue as technologies evolve.

Service providers are differentiating themselves by creating their own intellectual property, bringing in vertical-specific expertise and forming strategic partnerships with public cloud providers, the report says.

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The 2020 ISG Provider Lens™ Public Cloud Solutions and Service Partners Archetype Report examines four different types of clients, or archetypes, looking for public cloud services. The report evaluates the capabilities of 26 public cloud providers to deliver services to the four archetypes:

Traditional archetype: These customers haven’t accepted the relevance of cloud for their computing needs. Their IT environment is mainly mainframe and legacy applications. They have not embraced cloud computing due to regulations, security issues or pure disdain for new technology. However, this archetype is open to learning more about cloud computing benefits and is seeking assistance to assess its computing environment and strategy formulation.

Pragmatic archetype: Most of these buyers are second- or third-generation outsourcers that have matured in terms of people, processes and practices. They are looking to engage with multiple service providers in a managed services and professional mode. In these relationships, service providers are required to comply with service-level agreements or business-level agreements and with agreed deadlines. In this model, the client no longer micro-manages operational aspects and enables its providers to ensure proper monitoring and measurement of productivity.

Transformational archetype: These customers take a strategic view of their entire IT ecosystem. They have plans to transform their current IT infrastructure by shifting to cloud environments. However, transformative clients will not force-fit legacy infrastructure and applications to the cloud if strategic value is not realized. They are willing to take risks to realize that value. Their goals are to have quicker, more closely integrated, and user-friendly applications, platforms, and systems in place. Unlike managed services buyers that look for improvements in processes and systems, a transformation-oriented client is seeking to change the environment itself.

Next-gen archetype: The next-gen buyer is an early adopter of cloud and follows a “cloud-first” approach. The focus is on using “born-in-the-cloud” applications to leverage cloud-native capabilities that are used to develop applications in containers, deployed as microservices, and managed on elastic infrastructure through agile DevOps processes and continuous delivery workflows. Next-gen clients are not encumbered by the requirements of legacy operations. They consider IT as a change agent and an enabler of revenue and profit growth.

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