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German Microsoft Ecosystem Cools With Slower IT Spending

German Microsoft Ecosystem Cools With Slower IT Spending
Enterprises are more cost-conscious but still migrating to Azure cloud and investing in cybersecurity, ISG Provider Lens report says

German enterprises scaled back some IT investments in the second year of the COVID-19 pandemic, but many are continuing their migrations to cloud platforms, including Microsoft Azure, according to a new research report published by Information Services Group, a leading global technology research and advisory firm.

“Ransomware, blackmail and espionage are major concerns.”

The 2022 ISG Provider Lens™ Microsoft Ecosystem Partners report for Germany finds digital transformation projects spiked in the first year of the pandemic as companies adjusted to new operating requirements. Later, business challenges such as supply-chain disruptions forced many enterprises, especially in manufacturing and retail, to hold back on IT spending.

“German companies have become more cost-constrained and price-sensitive – except when it comes to cybersecurity services,” said Andrea Spiegelhoff, EMEA partner in Germany. “Ransomware, blackmail and espionage are major concerns.”

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However, an overall migration to the cloud continues, the report says. Organizations want to adapt their IT infrastructures to become more agile in responding to rapidly changing conditions and introducing innovations. Enterprises that have already moved some basic business functions to the cloud are now starting to migrate more specialized applications.

More German enterprises are now turning to Azure managed services providers to handle data consolidation, governance, compliance and security issues related to the cloud, ISG says. Managed services can help companies reduce costs, maximize automation and keep better track of their cloud capacity utilization and costs.

“The issues have become so complex for large companies using the cloud that outsourcing is often the only viable option,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “The key to success is to build a close professional partnership.”

ISG expects a healthy market for Microsoft services over the next few years as enterprises begin to consolidate their applications with fewer cloud providers.

The report also explores other issues in the Microsoft partner ecosystem in Germany, including Eastern Europe’s uncertain future as an EU regulation-compliant zone for providers’ delivery centers.

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The 2022 ISG Provider Lens™ Microsoft Ecosystem Partners report for Germany evaluates the capabilities of 60 providers across seven quadrants: Managed Services for Azure – Large Enterprises, Managed Services for Azure – Midmarket, Microsoft 365 – Large Enterprises, Microsoft 365 for Midmarket, Dynamics 365, SAP on Azure and Power Platform Services.

The report names Atos as a Leader in five quadrants and Arvato Systems and Bechtle as Leaders in four quadrants each. It names Capgemini, Deutsche Telekom (TDG), Devoteam M Cloud, SoftwareONE and T-Systems as Leaders in three quadrants each. Accenture, All for One Group, Avanade, Communardo, DXC Technology and NTT DATA are named as Leaders in two quadrants each. The report names Allgeier, AppSphere, Axians, Computacenter, DataONE, glueckkanja-gab, Infosys, KUMAVISION, ORBIT, Rackspace Technology, Scheer GmbH, Skaylink and Wipro as Leaders in one quadrant each.

In addition, ORBIT, q.beyond, Scheer GmbH and SoftwareONE 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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