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U.S. Firms Embrace Microsoft Clouds as Needs Evolve

Companies and providers address hybrid work, low-code/no-code development and GenAI through Azure and other platforms, ISG Provider Lens™ report says

Enterprises in the U.S. are quickly adopting Microsoft cloud platforms due to their ubiquity, relatively low cost and easy integration with the company’s other technologies, 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™ Microsoft Cloud Ecosystem report for the U.S. finds that Microsoft’s vast ecosystem of developers and providers for the Azure cloud platform, Microsoft Office 365 suite, Dynamics 365, Power Platform, and Microsoft Copilot continues to grow. Partly due to the large number of Microsoft implementations in the country, the U.S. is the leading market for Microsoft cloud services.

“The Microsoft ecosystem is aggressively expanding its capabilities to empower and support companies adopting all Microsoft cloud services,” said Shriram Natarajan, director, Digital Business Transformation, for ISG. “Enterprises are benefiting from providers’ innovation.”

More U.S. organizations are adopting services such as Teams, Azure Virtual Desktop and Copilot as remote and hybrid work become standard, the report says. Microsoft 365 productivity applications have become central to enabling distributed and hybrid workforces, increasing efficiency and advancing digital transformation.

With the low-code/no-code development capabilities of Microsoft Power Platform, many U.S. enterprises are democratizing innovation, ISG says. The rise of citizen developers within business units has been faster in the U.S. than in other regions, blurring the line between business problem-solving and software development, ISG says. Service providers are guiding clients into this new approach to development, ensuring governance and smooth integration of applications into Azure.

For many companies, Azure is becoming the preferred destination for complex SAP environments moving to the cloud, the report says. Microsoft has paved the way for SAP deployment on Azure through advances that include scalable virtual machines certified for SAP S/4HANA workloads and seamless integration of SAP with Azure services.

U.S. enterprises are at the forefront of developing applications that use generative AI (GenAI), with an eye to use cases in areas such as customer service, content generation and analytics, ISG says. Corporate cultures and relatively limited regulation of GenAI in the U.S. make it a center of GenAI experimentation. Azure is enabling GenAI development through new features including Azure OpenAI Service, which gives service providers easier access to large language models (LLMs) such as GPT-3, and integration of GenAI with Azure storage, computing and cognitive services.

“GenAI has been highly disruptive to IT, but it holds massive promise for enterprise productivity and innovation,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “As companies learn what they can do with this technology, Azure is enabling their exploration.”

The report also explores other Microsoft cloud trends in the U.S., including enterprises’ increasing interest in optimizing cloud costs and the growing number of Azure capabilities that managed service providers can use for new services.

For more insights into the Microsoft cloud-related challenges facing U.S. enterprises, including expanding skills requirements and the difficulty of navigating an increasingly complex technology landscape, along with advice for addressing those challenges, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ Microsoft Cloud Ecosystem report for the U.S. evaluates the capabilities of 37 providers across five quadrants: Managed Services for Azure, Microsoft 365 Services, SAP on Azure Services, Power Platform Services and Generative AI Services for the Microsoft Clouds.

The report names Accenture & Avanade, IBM, Infosys, TCS and Wipro as Leaders in all five quadrants. It names Cognizant, DXC Technology, HCLTech, Kyndryl and NTT DATA as Leaders in four quadrants each. Hexaware and Rackspace Technology are named as Leaders in three quadrants each. Capgemini, LTIMindtree, PwC and Tech Mahindra are named as Leaders in one quadrant each.

In addition, Capgemini and LTIMindtree are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in two quadrants each. Fujitsu, Hitachi Digital Services and Tech Mahindra are named as Rising Stars in one quadrant each.

A customized version of the report is available from Hexaware.

In the area of customer experience, Bechtle is named the global ISG CX Star Performer for 2024 among Microsoft cloud ecosystem partners. The provider earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, which is part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

The 2024 ISG Provider Lens™ Microsoft Cloud Ecosystem 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, 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.

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

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 and automation, 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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