Enterprises in the U.S. are increasingly embracing multicloud operating models and are looking to cloud service providers to help them choose the right clouds for the right workloads, according to a report published by Information Services Group (ISG).
The report finds enterprises also looking for support to operate their multicloud environments in the most efficient and effective manner possible—especially given the growing complexity of such environments. Today, enterprises are running on multiple clouds that need to be interconnected, integrated and managed, and they are turning to providers for help.
“Enterprises have recognized that moving to the cloud is beneficial to their businesses,” said Bernie Hoecker, partner and global leader of ISG’s enterprise cloud transformation business. “They are increasingly willing to approach managed services providers to help them move to the cloud in the right way and choose the right cloud for a specific workload.”
Demand for cloud-based services is surging in the Americas region. Annual contract value (ACV) for as-a-service solutions soared 51 percent in the third quarter, to a record $6.9 billion, the fastest growth rate for this segment since ISG began tracking it in 2014.
The U.S. report notes significant growth for cloud service providers in the past year, as more and more organizations turn to remote work during the COVID-19 pandemic. Most managed services are now virtually and remotely delivered, including cloud transformation and migration of workloads.
Cloud providers helping customers with their public cloud adoption
Cloud providers are offering a range of services to help customers with their public cloud adoption. This includes consulting services to formulate application transformation strategies and creating roadmaps that identify whether a workload needs a lift-and-shift transition or whether it should be rearchitected or replatformed to improve performance and reduce operating costs.
Increasingly, providers are entering into value-based deals in which benefits are shared between the enterprise and the provider, the report says. They are also embracing platforms and tools, such as AI and machine learning, to automate cloud operations.
Meanwhile, many enterprises are turning to cloud financial operations, or FinOps, providers to help them track cloud expenditures, as they use cloud resources in a dynamic and complex manner, the report says. Use of FinOps services has skyrocketed in recent years as cloud adoption has grown.
FinOps can increase the business value of the cloud by bring together technology, business and finance professionals with a new set of processes that help organizations efficiently monitor and track their cloud resources.
Many service providers partnering with public cloud infrastructure providers
The report notes that many service providers have entered into strategic relationships with public cloud infrastructure providers such as AWS, Microsoft Azure and Google Cloud Platform. Both sides are working closely together to co-develop cloud offerings and have a joint go-to-market strategy.
Providers and hyperscalers are focusing on improving and strengthening security measures to help enterprises improve customer experience in a highly secure cloud environment. They are also sharing best practices to develop cloud solutions for faster migrations, improved efficiencies in cloud resource management and increased adoption of next-generation technologies.
Many cloud service providers are also investing to upskill their talent in the U.S., due to a shortage of skilled professionals in the market, the report adds. Service providers are working closely with hyperscalers and third-party training institutes to train and certify their employees in various cloud technologies.