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Managed Services

An ISG study records high market dynamics for cloud solutions. Due to the shortage of skilled workers, companies are increasingly turning to managed public cloud services.
E-3 Magazine
May 23 2023
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This text has been automatically translated from German to English.

Industry-specific public cloud solutions on the rise

Service providers in the German public cloud market are increasingly offering industry-specific services and solutions. In addition, an ISG comparative study on the topic of solutions and services shows that the market for medium-sized customers is changing particularly dynamically due to numerous new providers and a flurry of acquisitions. The study was published by the market research and consulting company Information Services Group. The provider comparison examines the competitive strength and portfolio attractiveness of 100 service providers active in the German market for public cloud services and solutions.

According to ISG analysts, the biggest limiting factor in migrating to the public cloud is the lack of skilled workers. Last year, ISG again recorded an increase in the number of service providers reporting a shortage of skilled staff. In addition, they said there was often a lack of knowledge about IT requirements and compliance changes. Employees, their tasks and job descriptions, and even training and continuing education programs are often treated stepmotherly. While cloud hyperscalers have expanded their online training offerings to increase the number of qualified engineers and cloud architects, he said. But this is not enough to meet current demand, he said. As a result, some service providers would simultaneously compensate for the skills shortage through automation to be able to support more customers without increasing the number of their own employees.

"Digital transformation looks different in every industry, especially as different regulations and compliance guidelines apply in each case," says Heiko Henkes, Director and Principal Analyst at ISG. "That's why the trend toward industry-focused solutions will continue in the coming years." Demand for public cloud services in general will also continue to grow as companies seek to become more resilient and to orchestrate and bundle their services more centrally, he added. "In addition, especially in the post-Corona era, it is more important than ever for enterprises to be flexible and quick to adopt new cloud services. Foremost among these is the cloud-based remote workplace."

Heiko Henkes, ISG One




Large providers are trying to gain access to the SME market, which is currently growing rapidly.


Heiko Henkes,
Director and Principal Analyst, ISG

Due to a lack of human resources, among other things, companies are increasingly turning to managed public cloud services. Service providers have developed special cloud management platforms (CMPs) for this purpose, making the outsourcing of cloud management even more attractive. Among other things, AIOps, the toolset for automating cloud operations using artificial intelligence (AI), is being used. The degree of automation that can be achieved, which varies between 40 and 70 percent, is now a key benchmark. This is because optimal automation improves the user experience on the customer side on the one hand and enables higher margins for service providers on the other. According to the ISG study, financial control of cloud expenditure is also becoming increasingly important. Although there are many different tools on the market, none of them offers all the necessary functions.

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