ISG Provider Lens: Hyperscale providers benefit from the corona crisis

According to the latest ISG study, the major hyperscalers such as AWS, Microsoft and Google are benefiting from the Corona crisis. The crisis has not only given an additional boost to digital transformation, but also to the business of public cloud providers. However, German companies expect data to be stored and processed in on-site data centers.

In addition to the general trend towards digitization, the current COVID 19 pandemic has also fueled the business of public cloud providers. However, public cloud offerings are not a sure-fire winner, as companies in Germany expect data to be stored and processed in on-site data centers.


This is reported in the new “ISG Provider Lens Public Cloud – Solutions & Services Report Germany 2020” by Information Services Group (ISG). ISG is a leading global market research and consulting firm in the technology segment.

Enterprises seek public cloud provider

Because of this public cloud boom, companies are intensively looking for partners to help them migrate to the cloud, according to ISG. “When moving to the cloud, fundamental questions need to be clarified,” says Heiko Henkes, Director & Principal Analyst at ISG. For example, he says, it is necessary to analyze which applications are suitable for the move to the cloud and how they can best be migrated.


“In this migration, companies can hardly do without the hyperscaler partner providers – for example, to make old mainframe applications cloud-compatible with the necessary know-how and suitable tools.” Nor is it advisable in many cases to transfer the company’s own applications to the cloud one-to-one (“lift & shift”), he said. “In this way, you only delay bringing about a solution,” Henkes said. “Cloud service providers can help here to consolidate enterprise systems first before the cloud migration.”

Software-as-a-Service and Infrastructure-as-a-Service growing strongly

Most recently, the submarket of “Hyperscale Infrastructure & Platform Services” examined by the ISG study grew even more strongly than before against the background of the COVID 19 pandemic. This applies to both Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (SaaS).

In this context, it is important for customers to obtain services from close proximity, because in addition to regulatory provisions on the location of data storage, latency requirements also play a role. In addition, the recent end of the “Privacy Shield” data protection agreement between the EU and the USA has once again underscored the market’s demand for on-site data centers.

Source: iStock / AndreyPopov

Look into the future

In Germany, all major cloud hyperscalers now have their own data centers, which they operate either in-house or via colocation partners. According to the study, this also applies to IONOS cloud, the so-called “rising star” of the market segment by ISG. Its entire infrastructure is located in Germany. The simple, comparatively less complex cloud platform offers a wide range of services, but is also largely self-explanatory and does not work with long-term contracts. This means that the provider is primarily targeting medium-sized companies, which also receive all services from IONOS cloud in German.


Looking to the future, ISG assumes that the storage and structuring of large volumes of data will become increasingly important as digitization progresses. “In the long term, even the large hyperscalers will no longer be able to rely solely on the availability of large data centers,” says ISG analyst Henkes. “They are increasingly developing technologies to enable hybrid cloud solutions and help customers run local appliances based on global public cloud standards. This trend toward ‘distributed cloud’ can already be observed among vendors in the market.”

According to the study, privacy concerns specifically were a barrier to cloud service adoption. Source: iStock / gorodenkoff

Software-as-a-Service and Infrastructure-as-a-Service growing strongly

In the hyperscale infrastructure and platform services submarket, ISG examined a total of 19 providers, six of which positioned themselves as leaders and one as a rising star. According to ISG’s definition, this is a company with a “promising portfolio” and “high future potential”.


The “ISG Provider Lens Public Cloud – Solutions & Services Report Germany 2020” evaluates the services of 101 providers in eight market segments (quadrants): In addition to “Hyperscale Infrastructure & Platform Services”, these are “Consulting & Transformational Services (Large Enterprises)”, “Consulting & Transformational Services (Midmarket)”, “Governance, Risk & Compliance Services”, “Managed Public Cloud Services (Large Enterprises)”, “Managed Public Cloud Services (Midmarket)”, “Secure Enterprise Filesharing Services” and “SAP HANA Infrastructure Services”.

Source coverimage: iStock /Laurence Dutton