As GenAI beckons, hyperscale infrastructure gives enterprises affordable access to essential hardware and tools, ISG Provider Lens™ report says

Enterprise adoption of AI technologies is the main driver of growing U.S. demand for public cloud services over the past year, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens™ Multi Public Cloud Services report for the U.S. finds that organizations recognize both the transformative potential of AI-based applications and the high cost and complexity of developing and deploying them. AI — especially generative AI — requires expensive hardware and software, such as graphics processors and large language models (LLMs) that are not economical for enterprises to build on their own. Many are turning to cloud platforms for scalable, on-demand computing power, storage, tools and AI-specific services.

“AI and cloud computing have a close symbiotic relationship,” said Anay Nawathe, ISG cloud delivery lead for the Americas. “Increasing AI adoption in the coming years will create significant growth in the public cloud industry.”

GenAI is gaining traction at U.S. enterprises, but companies are still exploring it cautiously, ISG says. Most GenAI deployments are proofs of concept to better understand the technology’s potential applications and broader implications. Enterprises are testing GenAI in several areas, including content creation and personalized marketing, but most customer-facing applications are not yet in production. Service providers are guiding clients through the early stages of this transformation.

As U.S. enterprises deploy more AI-related workloads, they seek immediate cost savings to balance the growing demands of digital transformation with tight budgets, the report says. While public cloud infrastructure gives companies greater flexibility, it often leads to complex billing structures and unexpected costs if not managed effectively.

FinOps practices and services are increasingly essential for properly allocating cloud resources within enterprises and minimizing underutilized assets. GreenOps models, which track both the cost and the carbon footprint of cloud infrastructure, are also growing in importance.

Demand for consulting and transformation services has grown steadily over the past year as enterprises modernize their IT environments, shifting from monolithic systems to flexible, scalable multi-cloud and cloud-native solutions, the report says. Most large companies are seeking industry-specific solutions that optimize existing workloads. Midsize enterprises prioritize affordability and rapid deployment of outcome-focused cloud transformations.

Managed services for large U.S. enterprises have advanced in the past year through the integration of AI-enabled automation and improved cloud optimization tools, ISG says. Large companies are seeking services to ease the complexity of managing multi-cloud environments. Midsize organizations favor providers that can help them manage their cloud infrastructure with low cost and minimal disruption.

“U.S. enterprises want cloud infrastructure that is ready for AI and complex workloads,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Well-designed multi-cloud solutions allow them to deploy applications across diverse environments with minimal overhead.”

The report also explores other public cloud trends in the U.S., including recent technology advancements by hyperscale cloud operators and the rising demand for scalable, flexible infrastructure for SAP HANA deployments.

For more insights into the public cloud challenges facing U.S. enterprises, including the growing need for built-in cloud sustainability and the rising costs of VMware deployments, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ Multi Public Cloud Services report for the U.S. evaluates the capabilities of 59 providers across seven quadrants: Consultation and Transformation Services — Large Accounts, Consultation and Transformation Services — Midmarket, Managed Services — Large Accounts, Managed Services — Midmarket, FinOps Services and Cloud Optimization, Hyperscale Infrastructure and Platform Services and SAP HANA Infrastructure Services.

The report names Accenture, Capgemini, HCLTech and Rackspace Technology as Leaders in three quadrants each. It names Accenture (Navisite), AWS, Cognizant, Deloitte, Google, Hexaware, Hitachi Digital Services, Infosys, Kyndryl, Microsoft, Mphasis, TCS, Tech Mahindra, Unisys and Wipro as Leaders in two quadrants each. DXC Technology, IBM, Microland, NTT DATA, Persistent Systems and UST are named as Leaders in one quadrant each.

In addition, Brillio, Cognizant, LTIMindtree, NTT DATA and Persistent Systems are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

In the area of customer experience, Persistent Systems is named the global ISG CX Star Performer for 2024 among multi public cloud services providers. Persistent Systems earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

Customized versions of the report are available from Microland and Unisys.

The 2024 ISG Provider Lens™ Multi Public Cloud Services report for the U.S. is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

Press Contacts: Will Thoretz, ISG +1 203 517 3119 will.thoretz@isg-one.com Julianna Sheridan, Matter Communications for ISG +1 978-518-4520 isg@matternow.com

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