ISG Provider Lens™ Public Cloud Solutions and Service Partners Archetype Report 2019-20
Due to the rapidly changing and disruptive environment of information technology, businesses are forced to adapt to new technological advancements. Enterprises are realizing that they are not immune to this disruption and must have a strategy to compete in the modern marketplace that is driven by tech-savvy consumers. This digital journey requires next-generation public cloud infrastructure with new-age applications that are more flexible, agile and user friendly.
More than half of all public cloud enterprise customers have been using a multi-cloud environment in recent years. This trend is expected to surge irrespective of the enterprise size. However, there are some barriers to a multi-cloud setup. Orchestration is a challenge, as it involves several moving parts and a complex setup to be operated on a public cloud environment. Many users find it difficult to manage multi-cloud environments, citing complexity as one of the biggest barriers. They are adopting various tools to manage this complexity, but these are not mature enough. Other barriers include vendor lock-in by the public cloud provider and interoperability between two or more providers.
The public cloud managed service provider (MSP) ecosystem has been growing and adding more service providers. 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 their niche/unique capabilities or client segments. This consolidation and shrinkage in the MSP market will prevail as technologies evolve. Public cloud providers have MSP certifications that every other system integrator is striving to acquire. In order to differentiate among MSPs, hyperscalers are conducting yearly audits and further tightening the MSP certification eligibility. Service providers are also differentiating themselves by creating their own intellectual property, bringing in vertical-specific expertise and forming strategic partnerships with public cloud providers.
Cloud management platforms (CMPs) have been an integral component of cloud managed services. Their primary role is to provide enterprises with a portfolio of cloud operation services along with the flexibility of working with the right cloud environment (private and public cloud). The CMP has a complete toolset for cloud-native development, application programming interface (API) management and integration, DevOps, integrated platform as a service (iPaaS) and container management. It should be a cloud-agnostic and vendor-neutral platform with a robust security layer on top of all the features and services provided. Service providers are either leveraging third-party platforms and tweaking the CMP to add features and white label it or are creating in-house products and selling them as standalone offerings. They can differentiate themselves with the help of a robust CMP for a potential client. The downside of using a provider’s CMP and not one from a vendor is the risk of leading the enterprise client into a vendor lock-in.
The increase in cloud consumption has led to a rise in spending. The top priority of enterprises is to control, manage and optimize cloud expenses. Many are finding it difficult to manage cloud spending due to the complex and vast cloud ecosystem. Service providers are playing an important role by helping enterprises to manage costs efficiently by leveraging their vast experience in managing cloud infrastructure and assets for several customers. They are also providing a long-term option of creating a roadmap with suggestions on whether the workload needs a lift-and-shift approach or should be re-architected or re-platformed to get the best performance and reduce costs.