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US Firms Embrace Hybrid Clouds — While Watching Costs

US Firms Embrace Hybrid Clouds — While Watching Costs

As more enterprises move to the cloud for agility and savings, FinOps frameworks to control cloud costs are gaining traction, ISG Provider Lens report says

Enterprises in the US are accelerating their migration to private and hybrid clouds, while also acting to rein in their cloud costs, according to a new research report published by Information Services Group (ISG), a leading global technology research and advisory firm.

“Moving to the cloud makes it easier for companies to implement next-generation data analytics platforms”

The 2022 ISG Provider Lens™ Next-Gen Private/Hybrid Cloud Data Center Services and Solutions report for the U.S. finds that distributing IT resources across hybrid clouds is becoming the norm for U.S. enterprises. Facing the growing cost and complexity of operating on-premises IT infrastructure, most organizations are outsourcing their data centers or migrating applications to public and private clouds.

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To use the cloud more intelligently, many advanced enterprises are also adopting frameworks to track and optimize cloud computing activity throughout their organizations, the report says. These frameworks are based on the principles of FinOps, a way of looking at cloud-based operations through a financial lens, which is fast gaining traction. FinOps is designed to reduce cloud costs, which in some cases have ballooned as different departments pursued separate cloud initiatives.

“Private and hybrid clouds can make enterprises more efficient, but to maximize return on investment, companies need to coordinate and optimize their cloud strategy,” said Bernie Hoecker, ISG partner, Enterprise Cloud. “FinOps offers a way to do this, helping to dramatically reduce cloud costs.”

A FinOps framework provides a holistic view of cloud implementations across an organization and is a way for each department to justify and optimize its own cloud use, the report says. This helps identify and remove inefficiencies, such as by consolidating small, departmental Microsoft 365 implementations.

Many U.S. enterprises see hybrid clouds as a way to generate new sources of revenue, the report says. For example, cloud-based platforms can help companies better analyze customer information for more effective marketing. This strategy is particularly popular in the U.S., where enterprises face fewer constraints on the use of customer data than in other regions, such as Europe.

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“Moving to the cloud makes it easier for companies to implement next-generation data analytics platforms,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “This agility is essential to remaining competitive.”

The report also quantifies the growth of managed cloud services in the Americas and examines several other trends, including the increasing importance of agile security capabilities and edge computing.

The 2022 ISG Provider Lens™ Next-Gen Private/Hybrid Cloud Data Center Services and Solutions report for the U.S. evaluates the capabilities of 58 providers across four quadrants: Managed Services for Large Accounts, Managed Services for Midmarket, Managed Hosting, and Colocation Services.

The report names Ensono, Kyndryl and Rackspace Technology as Leaders in two quadrants. It names Accenture, Capgemini, Cognizant, CoreSite, CyrusOne, Cyxtera, DataBank, Digital Realty, Equinix, HCL, Hexaware, Infosys, LTI, Lumen, Mphasis, NTT Ltd., QTS, TCS, Unisys, Wipro and Zensar as Leaders in one quadrant each.

In addition, Navisite, NTT Ltd. and Unisys are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

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