State, local agencies finally start
widespread cloud migration to replace aging technologies, modernize
public services, ISG Provider Lens™ report says
The U.S. public sector is quickly adopting public cloud
services, beginning a long-awaited transition from legacy systems
to advanced multicloud platforms, 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. Public Sector finds that cloud adoption by state,
local and educational (SLED) organizations in the U.S. is steadily
increasing after being slower than expected for the past several
years. Though the federal government began making grants available
for technology modernization in recent years, post-pandemic fiscal
and political challenges prevented many agencies from launching
cloud transformations.
“Cloud adoption was slower than expected initially, but momentum
is growing now,” said Nathan Frey, partner, U.S. Public Sector, at
ISG. “In response, more service providers are entering this market
and adapting their strategies to meet public agency needs.”
SLED organizations are turning to cloud services in part because
their legacy systems and overall IT models are becoming obsolete,
the report says. With IT staff retiring and operating budgets
getting squeezed, local agencies often lack the skills to manage
either old or new technologies.
Constituents’ service expectations are also pushing agencies
toward the cloud. Since 2023, public sector entities have become
more comfortable relying on cloud infrastructure and services. Many
made the transition by turning to large-scale cloud-based
capabilities contracted and controlled by state governments.
To address the complexity of cloud-first or cloud-plus-legacy
environments, SLED organizations often engage with managed services
providers, many of which have enhanced their services for public
agencies. Providers are expanding their use of multiple forms of
AI, including generative AI, to make services more adaptable and
augment IT staff within client organizations.
The global shift of ERP platforms to the cloud has strongly
influenced the U.S. public sector, where SAP is the dominant ERP
platform, the report says. Many public agencies are turning to
service providers for assistance with this transition, which often
involves fragmented SAP environments, data conformity problems and
regulatory requirements. ISG expects the number of SLED SAP
migrations to keep growing through 2027.
SLED organizations are increasingly concerned about financial
management, especially as they rely more on cloud services, ISG
says. Demand is growing for Cloud FinOps, which gives enterprises a
framework for ensuring cloud spending aligns with agency missions,
regulatory requirements and budgets.
“Agencies need to keep scaling up and adapting cloud usage to
meet changing needs and serve constituents,” said Jan Erik Aase,
partner and global leader, ISG Provider Lens Research. “FinOps
gives them the visibility and confidence to make those
investments.”
The report also explores other public cloud trends affecting the
U.S. public sector, including stepped-up efforts by hyperscalers to
meet the sector’s needs and rising demand for cooperative
contracting among states.
For more insights into the cloud challenges U.S. public agencies
face, including how to coordinate acquisition and maintenance of
resources and evaluate provider’s public-sector qualifications, see
the ISG Provider Lens™ Focal Points briefing here.
The 2024 ISG Provider Lens™ Multi Public Cloud Services report
for the U.S. Public Sector evaluates the capabilities of 38
providers across five quadrants: Consulting and Transformation
Services, Managed Services, FinOps Services and Cloud Optimization,
Hyperscale Infrastructure and Platform Services and SAP HANA
Infrastructure Services.
The report names IBM as a Leader in all five quadrants. It names
Kyndryl and Rackspace Technology as Leaders in four quadrants each
and Accenture, Infosys, NTT DATA and Unisys as Leaders in three
quadrants each. AWS, CGI, Deloitte and Microsoft are named as
Leaders in two quadrants each. SAP is named as a Leader in one
quadrant.
In addition, Capgemini and HCLTech are named as Rising Stars —
companies with a “promising portfolio” and “high future potential”
by ISG’s definition — in two quadrants each. Google and TCS are
named as Rising Stars 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.
A customized version of the report is available from Unisys.
The 2024 ISG Provider Lens™ Multi Public Cloud Services report
for the U.S. Public Sector 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20241220382225/en/
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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