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Magic Quadrant for Public Cloud Infrastructure Managed Service Providers, Worldwide

Published: 29 March 2018 ID: G00327438

Analyst(s):

Summary

Enterprise architecture and technology innovation leaders can benefit from selecting a high-quality-managed service provider when implementing and operating solutions on Amazon Web Services, Microsoft Azure and Google Cloud Platform.

Strategic Planning Assumption

By 2023, the number of cloud service provider (CSP)-certified companies delivering cloud managed services will shrink to fewer than 1,500 vendors globally, having peaked at about 3,000 in 2020.

Market Definition/Description

Public cloud infrastructure as a service (IaaS) delivers compute, storage and network resources in a self-service, highly automated fashion. The leading public cloud IaaS providers also offer platform as a service (PaaS) capabilities and other cloud software infrastructure services as part of an integrated IaaS+PaaS offering. However, such services do not completely eliminate the need for IT operations management (ITOM). Customers still need expertise to choose the right service elements and to configure them appropriately, and they retain responsibility for the guest OS, middleware and applications that run on their IaaS compute instances. Furthermore, cloud IaaS introduces new challenges in governance, financial management and integration.

Customers look for cloud IaaS assistance from a third party because they lack cloud expertise, seek to optimize their operations or seek to scale their staffing. Engagements are on a short-term tactical basis or as part of a long-term infrastructure management strategy. Consequently, an ecosystem of managed and professional services providers has arisen to provide services on top of public cloud IaaS offerings. Many managed service providers (MSPs) may also act as a cloud service broker (CSB).

A public cloud infrastructure MSP, in the context of this Magic Quadrant, is an MSP that offers managed services and professional services related to infrastructure and platform operations for one or more hyperscale integrated IaaS+PaaS providers. These providers include, specifically, Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform (GCP) (see Note 1). The term "hyperscale providers" will be used to collectively and specifically refer to AWS, Azure and GCP throughout this Magic Quadrant. The term "hyperscale cloud MSPs" will be used to refer to the MSPs that deliver services on these hyperscale providers.

The managed and professional services ecosystem for hyperscale providers is diverse. This Magic Quadrant is focused on MSPs that have deep technical expertise with hyperscale providers, effective cloud management platforms (CMPs), and managed services that leverage automation where possible. The MSPs must also possess the ability to deliver cloud-optimized solutions, regardless of whether a customer is deploying new cloud-native applications or migrating legacy workloads from an existing traditional data center. This depth of expertise and technical integration, including exploiting the API-enabled automation of hyperscale providers, distinguishes these MSPs from the legion of data center outsourcing (DCO) providers. DCO providers usually offer solutions that largely treat hyperscale providers as if they were simply virtualization platforms.

Cloud IaaS adoption is bimodal; consequently, the adoption of public cloud infrastructure MSPs is also bimodal. Mode 1 safety-and-efficiency-oriented customers have different requirements from Mode 2 agility-oriented customers. Mode 1 customers need an MSP that can offer migration services and the ability to drive cost efficiency through automation and transformation assistance. By contrast, Mode 2 customers need an MSP that has broad expertise with both cloud-native architectures and the range of services offered by a hyperscale cloud provider. Additionally, these providers must have deep knowledge of DevOps practices and tools, and the ability to support developer self-service and agile operations practices, including continuous integration (CI), continuous delivery (CD) and continuous deployment.

Customers that are initially entirely focused on a single mode of usage are highly likely to develop bimodal requirements as their cloud aspirations increase over time. And, regardless of modality, many customers need MSPs to assist in creating and maintaining a cloud environment in which governance and controls meet or exceed customers' requirements, particularly when considering their security, compliance and cost management needs.

In the context of this Magic Quadrant, MSPs are expected to deliver three pillars of capabilities — a CMP, managed services and professional services (consulting and implementation) — addressing the needs of customers operating in either or both modes:

  • The MSP must have a management portal that offers cloud service expense management (CSEM) and governance of the cloud provider accounts, including integration with identity management. It may optionally provide additional CMP, IT service management (ITSM) or other automation functionality. All CMPs enable the configuration of the managed cloud services, but they differ in the way they implement access to those services. Some do it by allowing direct access to the services through the CSPs' native UI or API (Mode 2 support). Others provide access by proxy through the CMP (a gateway, for Mode 1 support). CMPs vary in their degree of functionality and uniformity, typically being some combination of software the MSP has developed for itself and tools that it procures through partnership, acquisition or licensing. The more versatile MSPs can leverage their CMP capabilities, as well as automation and technical expertise, across both modes.

  • The MSP must provide technical support to various roles within their customers' organizations (infrastructure and operations [I&O] technicians and application developers), and the MSP may optionally also provision, monitor, configure, secure and manage the cloud provider's service elements. The coverage of services managed varies from MSP to MSP, but it must include the most commonly used services. The MSP may also optionally manage the compute instances, potentially encompassing the OS, middleware, database and application infrastructure, as well as supplemental service components that do not reside within the cloud provider (data protection services, for example).

  • The MSP's professional services (whether sold stand-alone or bundled with managed services) must include solution architecture, workload migration services and DevOps automation.

When to Use This Magic Quadrant

This Magic Quadrant is intended to be used to select an MSP when the customer strongly prioritizes best-practice adoption and management of a hyperscale provider. In these scenarios, the native capabilities of the hyperscale platform, combined with additional automation, are used to deliver greater reliability, security and agility, while reducing costs. These scenarios are valuable for both Mode 1 and Mode 2 customers. Specifically:

  • The MSP is able to design solutions that use the cloud provider in a best-practice fashion, regardless of whether the customer is migrating existing workloads or building new cloud-native applications.

  • The MSP is able to help customers use the breadth of the hyperscale platform — including not only IaaS components, but also PaaS components and other higher-order services.

  • The MSP is able to leverage the native management capabilities of the hyperscale cloud provider.

  • The MSP places a strong emphasis on the role of automation, including the use of DevOps tools and other automation tools that leverage "infrastructure as code." Customers are frequently encouraged to adopt DevOps practices, and the MSP may adopt a site reliability engineering (SRE) approach (see "Principles and Practices of DevOps That I&O Leaders Need to Cultivate" for an introduction to these concepts).

  • The MSP takes a best-practice approach to cloud infrastructure management, including the use of immutable infrastructure and DevSecOps where viable (see "Comparing Three Approaches to Modern Server Automation, From Scripting to DevOps Tools" ).

Not all customers prioritize these capabilities. Some customers are willing to accept a "lift and shift" approach that treats cloud IaaS much like traditional virtualized infrastructure, managed manually, even though it markedly reduces the benefits of adopting cloud IaaS. Furthermore, it is usually significantly more expensive than the traditional virtualization alternative. Some customers are also willing to use an MSP that is just beginning to learn to manage hyperscale providers, and might not yet have a best-practice approach to doing so.

Customers for whom public cloud infrastructure managed services is a peripheral part of a broader IT outsourcing contract, or who do not strongly prioritize best-practices adoption and management of a hyperscale provider, should instead consult the following regional research:

  • "Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services, North America"

  • "Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services, Europe"

  • "Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services, Asia/Pacific"

Format of the Vendor Descriptions

When describing each MSP, we first summarize the nature of the vendor. This summary includes its size, its category, its headquarters, how the cloud managed services business fits into the vendor's business structure, when it entered the cloud managed services business and whether it offers hybrid solutions.

In that description, we place each MSP into one of five categories. Some MSPs could fit more than one category; in such cases, we use the category we believe that they fit best:

  • Hyperscale-only MSPs: These MSPs were either founded specifically to provide services on hyperscale IaaS, or pivoted to entirely focus their business on these services.

  • Hybrid hosters: These MSPs are traditional managed hosting providers; however, they also have a hyperscale cloud management practice, and indeed they may now be focused on that business.

  • Hybrid MSPs: These vendors offer a variety of services, not all of which may be cloud-related. However, they have a hyperscale cloud-related managed and professional services practice. They are typically system integrators (SIs), value-added resellers or IT outsourcers, often with a local or regional focus. Some may have a focus on particular applications.

  • DCO providers: These vendors offer traditional DCO services, but might now also have practices that focus on delivering managed and professional services for hyperscale cloud infrastructure management.

  • SIs: These large, global SIs have practices that focus on delivering value on top of hyperscale cloud providers, including managed and professional services. They typically also offer value beyond the infrastructure layer due to their application expertise. They may also be able to assist with broader transformation initiatives, including business process redesign and organizational restructuring.

We provide information about each MSP's hyperscale cloud managed services in the following format:

  • AWS partner status: We list the MSP's current tier in the AWS Consulting Partner program — the tiers are Registered, Standard, Advanced and Premier. If it has AWS's audited Managed Service Partner designation, we list the first year it passed that audit (the earliest possible year is 2015). We note if it is an authorized reseller, and if it is also authorized to resell government cloud services. If the partner has any of these competency badges — Big Data, Migration, DevOps, Financial Services, Government, Microsoft Workloads and SAP — we list them. (The partner may have additional competency badges.) AWS has an extensive partner badging system (see Note 2). Finally, we list if the MSP is trained in delivery of AWS's own managed services offering (AWS Managed Services partner.)

  • Azure partner status: We note if the MSP has Microsoft's Cloud Platform competency partner badge, and if so, whether the MSP has it at the Silver or Gold level. We do not list general Microsoft partner status, only this Azure-specific designation, or, for those without this designation, whether they are Cloud Solution Provider partners (although that designation is not Azure-specific). We note authorized reseller status.

  • GCP partner status: We list the MSP's current tier in the Google Cloud Platform Services Partner program — the tiers are Registered, Authorized and Premier. We note authorized reseller status.

  • Sales presence: We list which of the following regions the vendor has direct sales presence: U.S., Western Europe, Australia, Canada, Eastern Europe, India, Central America, the Middle East, Japan, South America, Africa, other Asia/Pacific APAC, including China and South Korea. Note that many vendors have sales presence in only one region, but they offer the actual managed services in two or more geographies, as required by the inclusion criteria for this Magic Quadrant.

  • Target customer: We list the types of customer organizations that the MSP primarily targets.

We then provide the top three strengths and cautions for that vendor.

The initial release of this Magic Quadrant in 2017 provided use-case assessments for each of the vendors. For this update to the Magic Quadrant, we have removed the more in-depth study of use-case suitability to the accompanying Critical Capabilities document (see "Critical Capabilities for Public Cloud Infrastructure Managed Service Providers" ).

Magic Quadrant

Figure 1. Magic Quadrant for Public Cloud Infrastructure Managed Service Providers
Research image courtesy of Gartner, Inc.

Source: Gartner (March 2018)

Vendor Strengths and Cautions

2nd Watch

2nd Watch is a midsize hyperscale-only cloud-native MSP headquartered in the U.S. Founded in 2010, it is focused primarily on managed and professional services for AWS. Its Microsoft Azure support is limited and is delivered via professional services only.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller, including for government. DevOps, Financial Services, Migration and Microsoft Workloads competencies.

  • Azure partner status: Cloud Solution Provider. Authorized reseller.

  • GCP partner status: None.

  • Sales presence: U.S.

  • Target customer: Upper-midsize businesses and enterprises (typically with a history of outsourcing) that are seeking professional services for cloud implementation or workload migration, with follow-on managed services, or are looking to immediately adopt managed services.

Strengths
  • 2nd Watch has a long track record in AWS consulting services. It has numerous customer case studies, large-scale implementations and strong customer retention. Customers report high levels of satisfaction, particularly in the areas of responsive account management and service delivery.

  • 2nd Watch's migration approach benefits from a methodology that has matured over several years of customer use, including migrations scaling to thousands of nodes. Its workload optimization process is well-structured and delivered in progressive stages, complemented by service delivery that includes weekly operational reviews and monthly business reviews.

  • 2nd Watch focuses on helping customers reduce unexpected complexity via a responsive and transparent service. This focus is underpinned with vendor competency accreditations for specific verticals, and the company's understanding that proper alignment of its skills with the experience, organizational and cultural knowledge of the customer can result in faster benefits realization.

Cautions
  • Customers anticipating a future need for a broader transformation service (for example, the ability to leverage vendor resources to rearchitect or redesign applications from the ground up) may find 2nd Watch a less capable vendor for achieving those aspirational outcomes. Specifically, this vendor lacks management consulting and application development capabilities.

  • Although 2nd Watch claims to support users in over 196 countries, this support is primarily a result of engagements with large U.S. enterprise customers, as opposed to direct engagement across customers headquartered in other geographies. At present, 2nd Watch's resources are based solely in the U.S., with partner relationships in Asia and Australia.

  • 2nd Watch does not currently manage customers using the Azure platform. Although some CMP capabilities are technically possible, its Azure work thus far largely relates to incumbent AWS customers seeking professional services assistance for a second cloud platform, not ongoing managed services.

Accenture

Accenture, incorporated in Ireland, is a large SI with multicloud managed services embedded into its overall global business. The company has dedicated organizational units for each of the three hyperscale providers. Relationships with AWS and Azure are further strengthened by joint ventures and investments (AWS Business Group and Avanade, respectively).

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2016. Authorized reseller, including for government. DevOps, SAP, Government, Migration and Financial Services competencies. AWS Managed Services delivery partner.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller. Turnkey Azure Stack solutions and deep capabilities through subsidiary Avanade.

  • GCP partner status: Premier. Authorized reseller.

  • Sales presence: U.S., Western Europe, Australia, Canada, Eastern Europe, India, Central America, the Middle East, Japan, South America, Africa and other APAC.

  • Target customer: Primarily large enterprises, but also pursues a broad range of larger-scale digital opportunities.

Strengths
  • Accenture emphasizes business transformation using all cloud service models (IaaS, PaaS and SaaS) and cloud delivery models (public, private and hybrid). It also provides cloud-native capabilities, a DevOps philosophy and extensive automation. It does not have a traditional DCO business to protect, and it has been aggressive in moving customers toward cloud managed services.

  • Accenture delivers cloud managed services in a variety of business models, including shared-risk models, and it competes for a broad range of business in this market. It has well-structured, repeatable managed and professional services for cloud IaaS and PaaS.

  • Accenture continues to aggressively invest in its CMP — Accenture Cloud Platform (ACP). The recently released version 4.0 provides a unified management experience across public cloud, private cloud and legacy data centers.

Cautions
  • Because of Accenture's size and ability to customize, customers may see variations in both contracting and fulfillment. For example, consultants can sell deals that do not use Accenture's cloud best practices or ACP, yet customers have also told us that some teams require ACP, and the requirement is non-negotiable.

  • Accenture's engagement model is often relatively heavyweight and customized, even though it emphasizes agility and the use of repeatable delivery components. Customers must ensure that the Accenture sales team thoroughly not only understands what they want to achieve, but also presents a range of possible options.

  • Accenture's MSP business is a smaller part of the company that is growing. Most of the cloud-related business lies in professional services for migration and transformation. Providers that focus on the managed service aspect may be better fits for customers with more straightforward requirements.

AllCloud

AllCloud is a small hyperscale-only MSP headquartered in Israel, created from the 2008 merger of two companies — Emind (an early AWS consulting partner) and Blat-Lapidot (a Salesforce specialist). It built its business offering managed services for AWS, but it has extended its support to GCP.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller, including for government. Microsoft Workloads competency.

  • Azure partner status: None.

  • GCP partner status: Standard.

  • Sales presence: U.S., Western Europe, Eastern Europe and the Middle East.

  • Target customer: SaaS providers, technology startups and enterprises.

Strengths
  • AllCloud targets Mode-2-oriented customers, offering high-touch managed services on AWS for large SaaS providers and technology companies, which often require customized support for nonstandard or proprietary-developed applications. It is leveraging its experience to extend into general enterprise, with early evidence of traction.

  • Many of its customers are global in nature, and it has experience with multiregion deployments, including in the U.S. and Europe. It has a strong security practice, and it is certified by AWS for security competency. In addition, it has experience supporting customers with the EU Data Protection Directive and U.S. Health Insurance Portability and Accountability Act (HIPAA) compliance requirements.

  • It is highly focused on offering an agile approach, based on DevOps and CI/CD, automation and cloud-native capabilities. It has significant experience supporting customers with agile application deployment and strategic DevOps transformation. It has well-structured methodologies for migration, with a CMP for cloud service management.

Cautions
  • AllCloud has limited experience migrating traditional Mode 1 enterprise apps, even though it has supported reliable applications and lift-and-shift migration projects. This limitation is due to its strong focus on agile IT for Mode 2 requirements.

  • AllCloud is still in the early stages of building expertise supporting GCP, and it is still largely an AWS MSP. It has yet to support Microsoft Azure.

  • AllCloud is a relatively small provider, with presence in only a few select markets. Its typical customers tend to be either small or very large. It has limited experience offering professional services. Its high-touch approach may make it hard to scale its business, which could affect the consistency of the services it provides as it seeks to grow.

BESPIN GLOBAL

BESPIN GLOBAL is a small hybrid MSP headquartered in South Korea. It was founded in 2015 as a spinoff of Hostway Korea. It offers hyperscale cloud managed and professional services, along with hybrid solutions, including colocation, dedicated servers and private cloud IaaS via Hostway's data centers.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Advanced. Audited MSP since 2015. Authorized reseller, including for government. Migration competency.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller.

  • GCP partner status: None.

  • Sales presence: Other APAC.

  • Target customer: Midsize businesses and enterprises in South Korea or China, or others expanding into China.

Strengths
  • BESPIN GLOBAL is a relatively new MSP, but it is gaining traction in South Korea, with experience managing multiregion deployments for its global customers. It is expanding its presence quickly in China, where it also offers managed services for Alibaba Cloud, to support foreign businesses deploying into China as well as Chinese enterprises.

  • BESPIN GLOBAL adopts a cloud-native approach to the solution architecture, with well-structured migration services. It has many AWS-certified engineers, and it is certified for migration competency. It has gained significant experience handling AWS migration projects, with the ability to provide application management and development.

  • BESPIN GLOBAL has a strong orientation toward DevOps and agility, taking advantage of the native IaaS and PaaS capabilities of the hyperscale cloud platforms. BESPIN GLOBAL also has strong software skills and has developed its own multicloud CMP (OpsNow [formerly Bespin Service Platform]). Its CMP provides local language support for English, South Korea and China, and it is available as a stand-alone service.

Cautions
  • BESPIN GLOBAL is a young company, and while it has quickly established itself in its home market, it does not yet have a multiyear track record of success, an important consideration for large enterprises valuing proven consistency.

  • It has limited experience with Azure, although it has certified competency in this platform. It has more experience supporting lift-and-shift projects and reliable apps than agile apps and strategic DevOps deployment at this stage.

  • Its geographic presence is focused on South Korea and, to a lesser extent, China. It has yet to expand into other Asian markets, although it plans to do so in mid-2018. It recently received an additional $27 million in external investment, but it's still not certain that it has enough financial resources to support its plan.

Capgemini

Capgemini is a large global SI headquartered in France, providing services globally. Its cloud managed services are part of its end-to-end cloud service portfolio (Cloud Choice).

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2016. Authorized reseller. SAP, Migration and Financial Services competencies. AWS Managed Services partner.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller.

  • GCP partner status: Standard. Authorized reseller.

  • Sales presence: U.S., Western Europe, Australia, Canada, Eastern Europe, India, Central America, South America and other APAC.

  • Target customer: Enterprises and midmarket businesses that want to migrate existing workloads to the cloud or that require a strong technical contribution to application transformation as part of cloud adoption.

Strengths
  • Capgemini supports a broad range of Mode 1 workloads, utilizing skills and customer insight from its traditional managed services business. Its preferred approach to Mode 1 workloads includes a modernize-and-transform approach, rather than a simple lift and shift.

  • For Mode 2 workloads, Capgemini supports a DevOps-oriented approach. It has a structured methodology for helping customers adopt agile methodologies and implement a CI/CD pipeline. It supports the PaaS-level capabilities of the hyperscale cloud providers, as well as PaaS frameworks, such as Cloud Foundry. It can support container and microservices architectures, and it has successfully assisted customers in implementing applications running on serverless functions.

  • Capgemini has broad coverage, with skills in many industry verticals and in popular industry middleware and applications. Business from Azure is almost as significant as from AWS, whereas its competitors' businesses are typically not so balanced and tend to favor one cloud provider over the other. It can also offer a broader range of additional services, including full application life cycle management, to customers that need more than cloud managed services.

Cautions
  • Capgemini's strength and focus is on transformational projects. Clients with simpler expectations or requirements (such as limited Mode 1 migrations) may find Capgemini to be overkill for the task.

  • Although customers give Capgemini generally positive scores for the overall customer experience, Gartner has received reports from some customers disappointed in the quality of the technical teams initially dispatched to perform professional services.

  • Although Capgemini provides cost-competitive cloud managed services, prospective customers may nevertheless perceive the overall solution costs to be high once professional services and other higher-level services are factored in. Prospective customers should ensure that they make a like-for-like comparison when comparing Capgemini's solutions with those of competitors.

Cloudnexa

Cloudnexa is a small hyperscale-only cloud-native MSP headquartered in the U.S. Its business is focused entirely on CMP as a service and managed services mostly for AWS.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller, including for government. AWS Managed Services partner.

  • Azure partner status: None.

  • GCP partner status: None.

  • Sales presence: U.S. and the Middle East.

  • Target customer: Midmarket businesses.

Strengths
  • Cloudnexa's cornerstone service is the vNOC management platform, a CMP SaaS offering for AWS with a feature set focused on small or midsize business (SMB)-oriented capabilities for day-to-day cloud management. vNOC is supplemented by managed service bundles aimed at smaller customers, as well as customized managed services that include the use of third-party tools from CloudEndure, Dynatrace, Logz.io and Trend Micro.

  • Compared with the many other providers in this Magic Quadrant, Cloudnexa has a large customer base, thanks to its rapid sales cycle and ability to engage smaller organizations. Consequently, unlike some of its competitors, its long-term viability is not tied to a few key anchor clients.

  • Cloudnexa's service portfolio is straightforward, easy to understand and priced to be affordable for SMBs. Cloudnexa will assist organizations with Payment Card Industry Data Security Standard (PCI DSS), HIPAA and Federal Risk and Authorization Management Program (FedRAMP) compliance requirements at no additional cost.

Cautions
  • Cloudnexa is a high-volume vendor with a cloud-native managed service approach that emphasizes the role of automation. As a result, its staffing ratios are different from many of its competitors, with many more customers and virtual machines (VMs) per employee. Many small deals with a high number of customers may make it challenging to develop customer intimacy.

  • Cloudnexa attempts to be a flexible and accommodating business partner, but it does not always meet customer expectations for timely service delivery. Prospective customers should ensure that their contract aligns with expectations by clearly defining service levels and responsibilities.

  • Cloudnexa's offering and go-to-market strategy are well-aligned to its target customer base, but its current services and product roadmap are unlikely to suit customers that have more complex needs.

Cloudreach

Cloudreach is a midsize hyperscale-only MSP headquartered in the U.K. It has offered managed services for AWS since its founding in 2009, and it has since expanded to Azure. In February 2017, Blackstone acquired a majority stake in the business.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller, including for government. DevOps, Migration and Financial Services competencies. AWS Managed Services partner.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller.

  • GCP partner status: Premier. Authorized reseller.

  • Sales presence: U.S. and Western Europe.

  • Target customer: Midsize businesses and enterprises.

Strengths
  • Cloudreach has one of the longest track records as an AWS MSP, and it has been successful in winning large-scale global deployments, including multiregion and multicloud deals. It is a Pan-European provider, but it has now established over 30% of its head count based in North America, where its agile managed service approach is fully competitive with U.S.-based providers.

  • Cloudreach targets large organizations that seek to transform with support from a cloud-native partner. It targets both Mode-2-oriented customers that want to innovate, as well as Mode-1-oriented customers that want to reduce costs and technical debt. Cloudreach is successful at teaching customers to operate effectively in the cloud. It offers its cloud operations framework in two forms — either managed by Cloudreach, or available as a set of professional services and tooling that customers can use to perform their own cloud operations.

  • Cloudreach made two acquisitions in August 2017 in support of its growth strategy. Emerging Technology Advisors (ETA) addresses areas that were previously lacking in application architecture and development capabilities with logo reference clients. Cloudreach also acquired Cloudamize to enhance its migration and cost control capabilities, as well as report favorable improvements in lift-and-shift Mode 1 migration speeds as a result.

Cautions
  • Cloudreach made recent investments in its growth strategy through acquisitions; however, some rationalization of tooling is now required because it intends to deliver some capabilities via its newly acquired Cloudamize software where it makes sense to do so.

  • Cloudreach's specific support for enterprise applications (for example, SAP and Oracle) is addressed via its data integration software only (Cloudreach Connect), although it will triage requirements to third parties.

  • Although customers were generally positive about Cloudreach in our survey, ratings were mixed, being below the average ratings of satisfaction among the providers included in this research.

Cognizant

Cognizant is a large global SI headquartered in the U.S. Its cloud managed services are part of its DCO business. It has offered services for AWS, Azure and GCP since 2012. It offers a range of hybrid solutions.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller. Migration and Financial Services competencies.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller.

  • GCP partner status: Authorized.

  • Sales presence: U.S., Western Europe, Australia, Canada, Eastern Europe, India, Central America, the Middle East, South America and other APAC.

  • Target customer: Enterprises that want to migrate or modernize their data centers, or enterprises that are starting an agile transformation.

Strengths
  • Cognizant has a clear direction for its cloud managed and professional services, which are focused on delivering simplification, automation and cloud-native digital business solutions. Cognizant offers a full stack of cloud service expertise that includes consulting, migration, operations, ERP and security in conjunction with hybrid service offerings based in traditional IT outsourcing services.

  • Cognizant is at its best when it is delivering application-centric cloud projects that leverage its capabilities in application development, application modernization or application management. This is particularly true for complex applications, such as SAP. Cognizant also leverages hyperscale cloud platforms to deliver a range of application services in a variety of business and industry models.

  • Cognizant offers a wide array of services via its CMP functionality, including frameworks for managed services, transformation, orchestration and governance, risk and security, reporting dashboard, and DevOps.

Cautions
  • Customers' opinions of Cognizant's service delivery have improved over the last year. However, there are still some traces of inconsistent quality of delivery.

  • Cognizant focuses on large complex deals, targeting enterprise customers — especially existing customers, which may not suit smaller clients.

  • Cognizant is a global IT services provider, but its cloud managed service business is U.S.-centric. It is also undertaking a significant employee retraining effort while attempting to navigate a market where growth is anticipated. These activities could be a near-term distraction but are expected to result in further improvements of customer satisfaction.

DXC Technology

DXC Technology is a large global SI headquartered in the U.S. and is the result of a merger between CSC and the Enterprise Services Division of Hewlett Packard Enterprise completed in 2017. The DXC Technology cloud MSP business is part of a more inclusive managed service business. DXC Technology offers hybrid solutions for Microsoft Azure and Azure Stack.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2016. Authorized reseller, including for government. Migration competency. AWS Managed Services partner.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller.

  • GCP partner status: None.

  • Sales presence: U.S., Western Europe, Australia, Canada, Eastern Europe, India, Central America, the Middle East, Japan, South America, Africa and other APAC.

  • Target customer: Large enterprises.

Strengths
  • DXC Technology has global reach and depth of resources to assist its clients. It brings significant Mode 1 and SAP experience to large-enterprise customers, while offering global reach with regional presence.

  • DXC Technology's focus on automating security and introducing governance to enable enterprise clients to consume cloud at scale will resonate with customers that are struggling to build on early successes in cloud.

  • DXC Technology is well-positioned to deliver its clients' hybrid needs based on its historical IT outsourcing background capabilities, while evolving Mode 2 capabilities. It also has a broad ecosystem of partners to leverage in developing its service offerings. The DXC Agility Platform is a central technology component present in most deals.

Cautions
  • DXC Technology's strength is Mode 1 application and data center migration, not cloud-native or DevOps-oriented workloads. While DXC Technology can help bring increased agility to traditional IT environments, this is an evolutionary approach, rather than a revolutionary approach.

  • DXC Technology's focus on global enterprises limits its appeal to potential clients outside of that market segment and may limit its opportunities in the future.

  • While DXC Technology is showing early growth in Mode 2 delivery, it has yet to demonstrate its delivery capabilities in Mode 2 on a similar scale as its competitors, as well as DevOps excellence and cloud innovation.

Deloitte

Deloitte is a large, global hybrid MSP headquartered in the U.K. that also provides audit, consulting, financial advisory, risk management, tax and related services. Its acquisitions of Day1 Solutions and Strut Digital in May 2017 cemented its commitment to becoming a public cloud MSP.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2017. Authorized reseller, including for government. Financial Services and Government competencies.

  • Azure partner status: None. Deloitte meets the certification requirements for the Gold Cloud Platform competency. However, as Microsoft's independent auditor, Deloitte is not allowed to be a formal part of any Microsoft partner program.

  • GCP partner status: Premier. Authorized reseller.

  • Sales presence: U.S., Western Europe, Australia, Canada, Eastern Europe, India, Central America, the Middle East, Japan, South America, Africa and other APAC.

  • Target customer: Large customers seeking full life cycle support (design, build and run) as they execute their move to cloud.

Strengths
  • Deloitte has a strong focus on managing Mode 2 workloads and in refactoring Mode 1 workloads to benefit from cloud characteristics. It encourages its clients to transform, even though it may mean short-term losses in its Mode 1 business.

  • Deloitte has a very broad cloud provider coverage that includes Alibaba Cloud, Oracle Cloud and IBM Cloud, in addition to AWS, Azure and GCP, despite being relatively new to the cloud managed service space.

  • Deloitte has introduced value-based pricing, whereby the client pays based on business outcomes. This shared-risk, shared-gain strategy can give customers confidence in the commitment of Deloitte to achieve a successful outcome.

Cautions
  • While Deloitte is well-known for its consulting services, it is investing and building managed services that are mostly provided to its existing customers and is a relatively new entrant to the public cloud MSP market.

  • In our survey, customers gave Deloitte high marks for satisfaction; however, Deloitte's focus is on attracting very large organizations. Smaller organizations should secure written guarantees that they will get the level of attention and support they expect, paying close attention to the service levels and service management aspects of proposed offerings.

  • A large proportion of revenue comes from professional services, and only a small proportion comes from ongoing management. Customers focused on managed services more than professional services may receive less attention after the onboarding phase is over.

HCL Technologies

HCL Technologies is a large global SI headquartered in India, and it provides services globally. Its cloud-native business is a separate profit and loss (P&L) unit and operates as an overlay business unit on top of HCL Technologies' traditional managed services' business units.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2016. Authorized reseller.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller.

  • GCP partner status: None.

  • Sales presence: U.S., Western Europe, Australia, Canada, Eastern Europe, India, Central America, the Middle East, Japan, Africa and other APAC.

  • Target customer: Enterprises that are migrating existing workloads to the cloud or building cloud-native applications.

Strengths
  • HCL Technologies has a broad scope of services in almost every dimension: project type from lift and shift to cloud-native plus hybrid and multicloud projects; geographic coverage; and partners. It has successfully executed large projects of all types.

  • HCL Technologies' ElasticOps cloud managed services are offered in three tiers — basic monitoring and management capabilities; monitoring and management; and a fully managed service that includes application performance management. Billing is based on usage (hourly), with no commitments.

  • HCL Technologies has invested in structured, repeatable process and automation assets for workload assessment, migration and operations, allowing the company to scale with consistent results.

Cautions
  • HCL Technologies' focus remains on the larger-enterprise market. It may not be responsive to smaller prospective customers that have more basic requirements than the larger, more complex customers that HCL Technologies frequently serves.

  • HCL Technologies' cloud-native business unit is an overlay of other business units, on which it depends to execute. This lack of autonomy has the potential to create internal conflict or bottlenecks that impact delivery.

  • Although HCL Technologies recently increased investment in Mode 2 and cloud-native capabilities, it is still early in this effort. The DevOps tooling and focus of its competitors are more proven in the market. Prospective customers should closely compare HCL Technologies' tooling capabilities and service delivery for DevOps-style delivery to their needs, to ensure both initial expectations and ongoing aspirations are met.

Infosys

Infosys is a large global SI headquartered in India. Its cloud managed service business is managed as a distinct P&L unit within Infosys. It launched AWS and Azure practices in 2012. Its Cloud Ecosystem Hub embodies its hybrid cloud solutions.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller. Migration and Financial Services competencies.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller.

  • GCP partner status: None.

  • Sales presence: U.S., Western Europe, Australia and Eastern Europe.

  • Target customer: Enterprises with Mode 1 IT requirements.

Strengths
  • Infosys has significant application expertise and DCO experience, and it is well-suited for Mode 1 migration and modernization, including support for migrating legacy mainframe-based applications. It is flexible on pricing, offering a choice of consumption-based pricing, fixed-price contracts, and time-and-materials-based pricing.

  • Infosys offers standardized tools, automation and processes for hyperscale cloud platforms. It has a strong emphasis on automation in cloud migration, including lift-and-shift migrations. Its cloud-enabled virtual automation takes advantage of DevOps tooling and cloud-native capabilities to create reliable environments for traditional applications and new digital business applications.

  • Infosys is building up its capabilities to support agile applications, primarily at the application layer. These include data and analytics, machine learning and artificial intelligence, and operational technology (OT) and Internet of Things (IoT). These capabilities are supported by vertical-specific solutions running across different cloud providers. Infosys has done several innovative deployments on the hyperscale providers.

Cautions
  • The Infosys cloud managed service business is one of the largest among the providers featured in this research. It has grown very quickly in the past year. Although this speaks well of execution, it needs to focus more on its vision to match that of providers in the Leaders quadrant.

  • Most of Infosys' experience is with AWS, with a smaller but significant number of Microsoft Azure deployments. However, it has little experience with GCP, and it has a low proportion of certified engineers, relative to its peers.

  • It lacks a clear vision for addressing Mode 2 cloud managed service needs. While it encourages a transformative approach for its clients, this transformation is more mature in virtual automation and IT operations efficiency than in DevOps and developer empowerment.

Logicworks

Logicworks is a small hybrid hoster headquartered in the U.S. It began offering managed services for AWS in 2013 and has recently formalized its Azure managed service offering. It also offers hybrid solutions, including VMware-based hosting and private cloud IaaS, using Equinix data centers.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller, including for government. DevOps and Migration competencies. AWS Managed Services partner.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller.

  • GCP partner status: None.

  • Sales presence: U.S.

  • Target customer: Technology startups, midsize businesses and enterprises.

Strengths
  • Logicworks has a long track record in the managed hosting business for SMBs, but over several years, it has refocused on clients that have complex public cloud environments with compliance requirements (over 25% of its AWS clients require HIPAA compliance). Customer references report high levels of overall satisfaction.

  • Logicworks positions itself as a company that wasn't born in the cloud, but transformed itself for the cloud era. In practice, Logicworks has both cloud-native digital business customers and customers migrating from traditional hosting solutions, and it can support hybrid hosting scenarios using VMware products, when required.

  • Logicworks has strong AWS and DevOps-oriented capabilities, including a high ratio of certified engineers to customers. It received a $135 million investment in 2017 that has enabled the expansion of the business, including launching a dedicated professional services team, head count growth and strengthening of the C-level executive team.

Cautions
  • Although Logicworks has historically had capabilities beyond those typically associated with managed services, these were only recently formalized into a structured professional services business unit and portfolio of services. At the current time, there is no intention to advance capabilities beyond infrastructure transformation services (for example, into application-related competencies, such as developing cloud-native applications).

  • Logicworks is growing quickly. However, it lacks global reach with a purely U.S. presence and has yet to gain any significant customer numbers in its Azure practice, although significant growth projections are reported.

  • In 2017, Logicworks commenced a new initiative to deliver a more unified experience for its CMP capabilities through a single interface known as the Pulse platform. However, the platform is still at an early release stage and is being delivered in phases; therefore, customers should verify function availability and committed dates for future feature enhancements.

Nordcloud

Nordcloud is a small hyperscale-only MSP headquartered in Finland. It has offered managed services for AWS since 2012, as well as managed services for Azure and GCP since 2015. Nordcloud announced in September 2017 it was merging with SC5 (a cloud-native development company).

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller, including for government. DevOps competency.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller.

  • GCP partner status: Authorized. Authorized reseller.

  • Sales presence: Western Europe and Eastern Europe.

  • Target customer: Midsize businesses and enterprises in Europe.

Strengths
  • Nordcloud is focused on helping European businesses adopt public cloud services. Its geographic strategy emphasizes in-country presence in multiple Northern European countries, along with a local approach to sales and marketing. Although it adapts its services for local needs, all countries use a common set of best practices and automation tools.

  • Nordcloud targets both the lines of business and IT organizations, and it begins its customer engagements with a professional services consulting engagement, followed by appropriate activities, such as workload migrations and automated deployments. It emphasizes the role of automation throughout its managed services, and customers are encouraged to adopt a DevOps approach.

  • Nordcloud is prepared to support newly released PaaS services as part of customers' existing agreements, without requiring contractual changes, and it supports serverless app code as part of its managed services. Nordcloud's vision is to become a full stack cloud-native SI in the future and has begun to execute against this strategy by merging with SC5, which brings cloud-native application design and development skills to the broader Nordcloud Group.

Cautions
  • Although Nordcloud is pursuing an explicit multicloud strategy and encourages customers to make explicit trade-offs between cloud provider lock-in and convenience, AWS remains a far larger portion of its cloud managed service business. It does not have hybrid solutions, although it is willing to work with partners to deliver these solutions.

  • Nordcloud is purely a European provider, without any experience operating outside of Europe. However, it does support global multiregion deployments for European customers.

  • Nordcloud is currently working with a small number of GCP customers, anticipating growing demand when the GCP Finnish region opens in the near term. However, its current service capabilities are not directly comparable with its AWS and Azure service lines, and potential customers focused on GCP should carefully critique the capabilities available and committed delivery dates for future enhancements.

Onica

Onica is a midsize hyperscale-only U.S.-based MSP focused solely on AWS. It was formerly CorpInfo, an SI that entered the AWS MSP business in 2013.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller, including for government. Big Data, DevOps, Migration and Microsoft Workloads competencies.

  • Azure partner status: None.

  • GCP partner status: None.

  • Sales presence: U.S.

  • Target customer: Midsize to large enterprises. Startups.

Strengths
  • Relaunching as solely a cloud service business, along with new outside investment, indicates that Onica is focused on growth and relevancy to the current and future market. Recent acquisitions into the application development layers of the stack, such as serverless compute, machine learning and IoT use cases, show that the company is expanding its set of capabilities to address customer needs in cloud-native scenarios.

  • In-depth coverage of AWS services makes Onica a good choice for customers with an AWS focus. In December 2017, it made two acquisitions to enhance its DevOps and cloud-native-related services. Its Sturdy Networks acquisition is also an AWS-centric company, and NetBrains brings capabilities to exploit AWS's IoT capabilities with application design and development expertise.

  • The Onica Cloud OpsPilot is a preintegrated set of third-party tools that together create the CMP that covers "the eight dimensions of operational excellence." Onica has developed its own Cloud Optimizer service that works in tandem with CloudCheckr to provide a differentiated take on cost management and service optimization.

Cautions
  • The overwhelming focus on AWS will disqualify Onica from customer use cases in which multicloud management is a requirement. Although there are initial steps to support Azure, these steps are not yet meaningful for general customers and are not mentioned in marketing materials.

  • Onica can manage AWS workloads in just about every AWS region. However, Onica is based solely in North America and has no physical customer service or sales footprint in other regions. Thus, these factors could be problematic for customers with international locations or for North American customers that may wish to expand operations abroad and expect account services to be rendered locally.

  • In 2017, the CorpInfo cloud service business was spun off into Onica, with a $20 million growth equity investment from Sunstone Partners. The creation of Onica was predicated on the continued rapid growth of the AWS practice. The newly created business has also just embarked on two major integrations of acquired companies. These three events (incorporation and two mergers) will present special challenges to Onica and its customers during this relaunch period.

Rackspace

Rackspace is a large hybrid hoster headquartered in the U.S. Its cloud managed services for AWS and Azure were launched in 2015, and the services were launched for GCP in 2017.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller, including for government. DevOps, Migration and Microsoft Workloads competencies. AWS Managed Services partner.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller.

  • GCP partner status: Premier. Authorized reseller.

  • Sales presence: U.S., Western Europe, Australia, Eastern Europe, Central America and other APAC.

  • Target customer: Midsize businesses and enterprises.

Strengths
  • Rackspace acquired Datapipe in November 2017. Datapipe brings a fully mature and very credible AWS practice, a professional services organization well-versed in servicing large-enterprise customers, and managed services deployed in China on AWS, Azure and Alibaba Cloud. It also adds support for government customers to the Rackspace portfolio.

  • The Rackspace brand is synonymous with high-quality customer support. The Rackspace culture enjoins every employee to actively solve customer problems and provide "Fanatical Support." Customers indicated more complete satisfaction with Rackspace than with Datapipe in our surveys. The new combined company stands to benefit from the pre-existing Rackspace culture by improving overall customer satisfaction.

  • Rackspace has distinct offerings for AWS, Azure, GCP and Alibaba Cloud that match the unique requirements of customers of these platforms. There are three tiers of managed services. Navigator is for customers that prefer to self-manage. Aviator is for customers that want a more-inclusive managed service up through the OS. The recent TriCore acquisition brings managed application support for select software titles from SAP, Oracle, Sitecore and others.

Cautions
  • Despite the great potential of a merged Rackspace and Datapipe, the first year of integration will certainly bring about unexpected changes for both existing customers and new customers. Each company brings, for example, its own CMP, other tooling, sales organizations and support organizations that must be rationalized in the new corporate context. Although we believe Rackspace will move quickly to resolve these ambiguities, 2018 will be a year of significant change and uncertainty.

  • It may be difficult to scale the Fanatical Support model to apply consistently across the breadth and size of the market segments Rackspace now intends to serve. On the midmarket side, it will continue competing against primarily boutiques that are also committed to delighting their customers, and thus the quality of its support is less of a differentiator. In the large enterprise, operating at bigger scale will require even better automation, as well as a reduced reliance on personnel to manually solve problems.

  • Rackspace has not historically emphasized vertical competencies in how it defines or develops its offerings. Although it has customers from industries like financial services and healthcare, and it has acquired a government-focused business with Datapipe, it is still early in its efforts to bring a clear vertical story to customers.

REAN Cloud

REAN Cloud is a midsize hyperscale-only MSP headquartered in the U.S. It was founded in 2013, and it began offering managed services for AWS in 2014. It acquired 47Lining, an AWS big data advanced consulting partner based in Colorado, in July 2017.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller, including for government. DevOps, Migration, Financial Services, Government and Microsoft Workloads competencies.

  • Azure partner status: None.

  • GCP partner status: None.

  • Sales presence: U.S. and India

  • Target customer: Midsize businesses and enterprises, particularly those with regulatory compliance needs or which otherwise prioritize formal processes.

Strengths
  • REAN Cloud has strong competencies in highly regulated industries like education, healthcare, financial services and government, which make up a huge proportion of its customer base. Automated tooling to deploy and manage workloads of this type allows repeatable and consistent results.

  • REAN Cloud has deep AWS expertise, and it maintains a high ratio of AWS-certified engineers to customers and VMs. It has a long list of AWS Partner Network competencies, making it one of the most certified AWS partners in the industry.

  • With an impressive DevOps capability, REAN Cloud supports processes, tooling and automation assets. Its DevOps platform can integrate with the most popular industry tools, allowing clients to bring their own competencies and assets to the solution.

Cautions
  • REAN Cloud is an emerging MSP with low brand awareness. It specializes in regulated industries, independent software vendor (ISV) customers and DevOps, and it has significant AWS competencies and intellectual property. As such, it may be a target for acquisition.

  • Beyond its areas of specialization, REAN Cloud may not have enough significant differentiation to compete against its bigger and broader rivals. It is actively investing in broadening its areas of competence, including through acquisition.

  • Despite having expanded its support to other hyperscale cloud providers, REAN Cloud has not secured business beyond AWS. It is primarily a U.S.-focused provider, with a presence also in India, but there is little evidence of expansion beyond these geographies in the near term.

Smartronix

Smartronix is a midsize hybrid MSP headquartered in the U.S. It has provided managed services for AWS since 2009, and it has provided managed services for Azure since 2012. Its cloud managed services, branded Smartronix Cloud Assured, operate as a business unit within Smartronix. It also offers hybrid and multicloud solutions.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller, including for government. DevOps, Government and Migration competencies. AWS Managed Services partner.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller, including for government.

  • GCP partner status: Registered. Authorized reseller.

  • Sales presence: U.S.

  • Target customer: U.S. government, healthcare organizations, financial services, and enterprises and digital businesses of any size, where security or regulatory compliance are a priority.

Strengths
  • Smartronix has one of the longest track records of delivering managed services for AWS, and it was also among the first Azure MSPs. It also has strong expertise with Azure. It specializes in solutions that use PaaS components, containers and solutions that use machine-learning services. It also has significant experience in multicloud services, including working with customers that use both AWS and Azure.

  • Smartronix can deliver its managed services in two distinct styles — one that is more DevOps-oriented and drives standardization and automation to gain agility and efficiency; and one that is more traditional and customized — but Smartronix prefers a cloud-optimized approach. All solutions use a common CMP that integrates multiple commercial and open-source tools.

  • Smartronix has well-structured, automation-supported offerings for customers that need high security or have regulatory compliance requirements. Smartronix also has deep expertise in delivering solutions for the U.S. government. It has successfully completed a FedRAMP 3PAO assessment for managed services, including its CMP. Its services can be purchased on a wide variety of U.S. government contracting vehicles.

Cautions
  • Cloud managed services is a business unit within Smartronix, which is a general-purpose IT outsourcer. Although it has hundreds of customers, the bulk of its business comes from U.S. federal government contracts. Ongoing investments are focused more on growth-related activities (more sales offices and increased head counts) and less on innovation.

  • Although Smartronix targets large-scale transformational deals, it has only recently begun to win deals in management consulting expertise that businesses often desire for digital business transformations. Customers with a desire to transform their IT with Smartronix should confirm with the vendor that it is able to deliver on business transformation objectives.

  • There is some slight evidence of lower satisfaction with the contract negotiation process than with other vendors featured in this research. Surveyed customers expressed a broad mix of satisfaction levels. Prospective customers should consider that our survey is a small sample size.

Tata Consultancy Services

Tata Consultancy Services (TCS) is a large global SI headquartered in India. Founded in 1968, it has grown a worldwide business through numerous acquisitions since going public in 2004. TCS delivers public cloud managed services as a part of a much larger portfolio spanning application, infrastructure, enterprise solutions, business consulting and process outsourcing services.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2016. Authorized reseller. SAP competency.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller.

  • GCP partner status: None.

  • Sales presence: U.S., Western Europe, Australia, Canada, Eastern Europe, India, Central America, the Middle East, Japan, South America, Africa and other APAC.

  • Target customer: Midsize to large enterprises.

Strengths
  • TCS is a well-known global brand with a long history. It is a historically solid SI offering a range of services. TCS has moved aggressively and quickly to build a public cloud managed service business with investments in tooling, prebuilt solutions and a breadth of professional services.

  • TCS demonstrates market understanding with effective messaging to key CxO stakeholders across the digital enterprise, explaining to each role how cloud can improve its business, and how TCS can unlock cloud value. TCS's approach to engagements focuses on the business outcome as the key driver.

  • TCS builds templated solutions for a broad range of verticals. These solutions solve specific business problems and can be customized and instantiated in the cloud of choice, then subsequently managed by TCS. The breadth of solutions is extensive and could help many businesses acquire cloud capabilities in a near turnkey fashion, although the solution is not purely customized.

Cautions
  • Although TCS acknowledges that public clouds should not be treated as commodities, a key pillar of its strategy is delivering portable cloud-native applications. Customers must be aware that such portability almost always comes at the cost of not being able to fully access the benefits of a particular cloud, and is useful only in very specific use cases.

  • TCS's strategic move to focus on cloud managed services is very recent. Although TCS's offering is bold and enthusiastic in its debut, we have yet to see how the offering will mature. We anticipate some tweaks in the strategy and execution as TCS finds its place in the market.

  • Although there is evidence of doing both, TCS seems more focused on selling end-to-end solutions (templated vertical integrations) rather than enabling customers with their own DevOps capabilities. Customers looking primarily for DevOps enablement may be better served by other vendors for this use case.

Wipro

Wipro is a large global SI headquartered in India. Its cloud managed service business is a dedicated cloud business unit within Wipro.

Notable traits of this vendor's hyperscale cloud managed services are as follows:

  • AWS partner status: Premier. Audited MSP since 2015. Authorized reseller. SAP, Migration and Financial Services competencies.

  • Azure partner status: Gold Cloud Platform competency. Authorized reseller.

  • GCP partner status: Registered.

  • Sales presence: U.S., Western Europe, Australia, Canada, Eastern Europe, India, Central America, the Middle East, Japan, South America, Africa and other APAC.

  • Target customer: Enterprises with Mode 2 IT requirements.

Strengths
  • Wipro has significant application expertise and traditional DCO experience, giving it a firm understanding of Mode-1-oriented enterprise requirements, and how to deliver to those requirements in the cloud. It supports all three hyperscale cloud platforms, and it has experience with multicloud deployments.

  • Wipro is transforming rapidly to support Mode 2 requirements. It has built up a large pool of certified engineers to support the hyperscale providers, drawing on its large software skills base. It is quickly gaining experience supporting customers with DevOps and automation for agile application deployments. It acquired Appirio, an Indianapolis-based IT consulting firm specializing in business transformation through the use of cloud technologies, in late 2016.

  • Wipro's ServiceNXT solution framework embeds CMP capabilities within a broader IT operations management (ITOM) toolset. This framework is oriented toward the needs of customers that have a broad range of cloud services and cloud providers, and that need tools to support a methodical approach to operations.

Cautions
  • Wipro historically leverages its broad system integration, application development and application management capabilities for large or complex projects that require Mode 2 transformation. This model may not suit some client use cases. Wipro claims that the MSP business unit is changing this mix to more stand-alone engagements, but clients should insist on Mode 2 services being delivered without entanglements, if such is desired.

  • Wipro's cloud managed service business is relatively small in the context of its overall business, even though growth has been strong in the past year. It has more experience supporting AWS than it does supporting Azure or GCP.

  • Wipro is in the early stages of building its Mode 2 cloud managed service capabilities, including DevOps-oriented solutions. While customer satisfaction has improved significantly in the past year, Wipro needs to demonstrate that it can maintain its service quality as it scales up its business.

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant may change over time. A vendor's appearance in a Magic Quadrant one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.

Added

  • AllCloud

  • Deloitte

  • Onica

  • Tata Consulting Services

Dropped

  • Bulletproof

  • Claranet

  • Datapipe (acquired by Rackspace)

  • Melbourne IT

Inclusion and Exclusion Criteria

To qualify for inclusion, vendors need to meet all of the following criteria — specifically in the context of AWS, Microsoft Azure or GCP — henceforth referred to as hyperscale providers:

  • Be a qualified MSP partner of at least one hyperscale provider, as demonstrated by status as one or more of the following in 2017:

    • AWS Audited Managed Service Partner

    • Microsoft Azure partner with the Cloud Platform competency at Gold level

    • Google Cloud Platform Premier Partner

  • Support global deployments, by offering managed services for hyperscale providers in a minimum of two geographies

  • Provide a CMP — at minimum, a management portal, integrated with the hyperscale provider's identity management and billing

  • Provide managed services on a hyperscale provider, including monitoring, incident management, OS management and managed security

  • Integrate with the hyperscale provider's API to provide automation to customers, and support customer use of DevOps processes and tools

  • Perform solution architecture and workload migration services

  • Offer these capabilities as stand-alone services, without any requirement for system integration, application development, application management, management of noncloud infrastructure or other IT outsourcing services

  • Be a market share leader in this market as determined by Gartner based on a combination of sales revenue, instances under management and geographic presence

Evaluation Criteria

Ability to Execute

We evaluated vendors' Ability to Execute in this market by using the following criteria:

  • Product or Service: MSPs were evaluated on their current service capabilities, including both human-powered and automated capabilities. These capabilities include proven deep and broad expertise with AWS, Azure and/or GCP; breadth and depth of CMP features and other automation; high-quality managed service delivery in both Mode 1 and Mode 2 styles; and migration services.

  • Overall Viability (Business Unit, Financial, Strategy, Organization): MSPs were evaluated on the overall financial health of the company, their level of investment in this market and indicators of business success. For this particular market, we considered revenue, number of customers and amount of infrastructure under management.

  • Sales Execution/Pricing: MSPs were evaluated on the quality of their sales team, proposal quality and value for the money.

  • Market Responsiveness and Track Record: MSPs were evaluated on three aspects of their track record — successful delivery in this market, rapid delivery of support for new hyperscale provider capabilities and implementing current best practices on hyperscale providers.

  • Marketing Execution: MSPs were evaluated on the market's awareness of their brand, prospective customers' understanding of the MSP's value proposition in this market, the quality of marketing campaigns and other efforts such as social media participation.

  • Customer Experience: MSPs were evaluated on the quality of their contracts and associated delivery documentation, as well as the quality of the service experience for both Mode 1 and Mode 2 customers.

  • Operations: MSPs were evaluated on their ability to consistently meet commitments to customers, including delivering a continually available CMP and meeting SLAs. MSPs were also evaluated on their ability to maintain adequate staffing and personnel expertise, and to offer flexibility without compromising reliability, by combining the rigor of process with the agility of empowered employees.

Table 1.   Ability to Execute Evaluation Criteria

Evaluation Criteria

Weighting

Product or Service

High

Overall Viability

Low

Sales Execution/Pricing

Medium

Market Responsiveness/Record

Low

Marketing Execution

Low

Customer Experience

High

Operations

Medium

Source: Gartner (March 2018)

Completeness of Vision

We assessed vendors' Completeness of Vision in this market by using the following criteria:

  • Market Understanding: MSPs were assessed on their understanding of three key aspects of the market, and their ability to articulate how these aspects impact their strategy. Those aspects were:

    • Managed services in the context of cloud-native and digital business operations in hyperscale cloud providers

    • Managed services in the context of organizations that are migrating existing workloads onto hyperscale providers

    • In terms of how the use of IaaS and PaaS capabilities, along with DevOps tools and other automation, is transforming managed services delivery

  • Marketing Strategy: MSPs were assessed on their ability to articulate their position in the market and their competitive differentiation, and to communicate these messages clearly and consistently, both internally and externally to a bimodal audience.

  • Sales Strategy: MSPs were assessed on their understanding of the buyer centers for the market, and the way that these different buying centers want to engage with sales, as well as their partner and channel strategy.

  • Offering (Product) Strategy: MSPs were assessed on the breadth, depth, quality and differentiation of their service roadmaps in this market, including cloud-provider-specific capabilities, multicloud capabilities and hybrid IT capabilities.

  • Business Model: MSPs were assessed on their value proposition in three aspects:

    • "Pure play" cloud-only managed services

    • Hybrid services that include cloud and noncloud infrastructure

    • Managed services for cloud IaaS in conjunction with a broader solution such as application management

  • Vertical/Industry Strategy: MSPs were assessed on their ability to offer targeted services for particular focus areas, including regulated workloads and verticals such as healthcare, government and PCI-compliant e-commerce; big data and analytics use cases; and digital business transformation.

  • Innovation: MSPs were assessed on the level of investment in the future of their business, and the quality of those investments, whether financial or human capital. This criterion includes aspects such as the deployment of engineering resources (especially for automation), investment in personnel training and certification, partnerships and alliances, and mergers and acquisitions (M&As).

  • Geographic Strategy: MSPs were assessed on their ability to expand their offerings beyond their home region, serving the needs of multinational businesses, as well as adapting their offerings to other geographies and meeting country-specific requirements.

Table 2.   Completeness of Vision Evaluation Criteria

Evaluation Criteria

Weighting

Market Understanding

High

Marketing Strategy

Medium

Sales Strategy

Medium

Offering (Product) Strategy

High

Business Model

Low

Vertical/Industry Strategy

Medium

Innovation

High

Geographic Strategy

Medium

Source: Gartner (March 2018)

Quadrant Descriptions

Leaders

Leaders have a track record of successful delivery of high-quality managed services that thoughtfully exploit the capabilities of the cloud platform. They are well-positioned to continue delivering leading-edge services in the future.

Challengers

Challengers have a track record of successfully delivering cloud managed services during the early stages of this market, but they might not be able to evolve sufficiently quickly to expand beyond their primary geography or use-case focus.

Visionaries

Visionaries are well-positioned for the future, but they do not yet have a strong track record of successful delivery of high-quality managed services to many customers over a multiyear period.

Niche Players

Niche Players have not yet achieved broad success in this market, and they are not currently well-positioned to achieve broad success in the near future. Some Niche Players have a highly successful track record and are excellent at serving the customers that they target, but they might be limited to particular geographies or use cases. Others might be relatively new to the market; this market might not yet be core to their business, or they may be having challenges with consistently high-quality service delivery. They may be rooted in traditional managed services, rather than fully embracing a cloud-native style of service delivery.

Context

Hyperscale integrated IaaS and PaaS providers offer a wide array of self-service capabilities, but leveraging these capabilities in an optimal fashion requires expertise — more expertise than most organizations possess. Even when a business can maintain the necessary expertise, demand for those internal experts often exceeds what can be fulfilled by their employees. Consequently, managed and professional services from MSPs are a vital part of cloud success for a growing number of businesses.

The greatest benefits are derived from these cloud platforms when they are used comprehensively, although customers do not need to adopt them comprehensively from the beginning. Customers also benefit from using best-of-breed solutions from the cloud provider's ecosystem when the cloud provider does not offer desired functionality. Nevertheless, customers must be careful to ensure that they maximize the value that they receive for the platform lock-in that they accept. The best MSPs treat cloud providers as highly differentiated, not as commodities. However, MSPs should also explicitly help customers choose where, and to what degree, they will accept the risk of lock-in in return for ease of integration, agility and faster time to value. (See "Addressing Lock-In Concerns With Public Cloud Infrastructure as a Service" for more on this topic.)

Total cost of ownership of an application running on a hyperscale cloud platform is not determined by the cloud provider chosen; rather, it is the application architecture and how it leverages platform services, in combination with the management approach used. The more the native platform is leveraged, and the more standardized and automated the management approach, the less expensive it is. The efficiency of automated management is reflected in MSP pricing, which typically incentivizes customers to move toward a more automated model. MSPs with strong cloud-native skills and expertise in DevOps — and that have experience migrating customers from traditional operations models toward greater automation in conjunction with CI/CD — are best positioned to help customers operate efficiently over the long term.

Cloud-native applications benefit the most from hyperscale cloud providers, but many other applications can also benefit strongly from exploiting cloud platform capabilities. The best MSPs are able to migrate applications from noncloud environments into hyperscale cloud providers. They also recommend the infrastructure architecture and operational changes that will make these applications highly available, performant and secure, while improving operational reliability and efficiency (cost) and reducing change-related risk.

Customers should expect that the cloud platforms and the MSP services continue to evolve quickly. The best MSPs are able to keep pace with the rapid innovation of the underlying hyperscale providers. They expose those innovations to the customers that are able to rapidly take advantage of them, and they gently incorporate those innovations into the services of less-agile customers.

Market Overview

IT leaders who are considering sourcing MSP services — whether enterprise architecture and technology innovation leaders, or I&O leaders — should take note of the following key aspects of this market:

  • The public cloud infrastructure MSP market is not mature and is experiencing dramatic growth and change. Although the size of most MSPs is small, the past year has seen a sizable increase in demand for their services. On average, for those responding to our presurvey, revenue increased by 162% from 2016 to 2017, year-over-year. The number of vendors also has increased: The size of the list of vendors meeting our inclusion criteria of being a certified MSP for at least one of the hyperscale CSPs more than doubled in the same period. Traditional hosting, managed services and DCO businesses are being severely disrupted by cloud adoption, and most of the companies engaged in those businesses are pivoting to become cloud MSPs.

  • Many large SIs that were on the sidelines last year upped their game significantly since we last published this Magic Quadrant. Consequently, the vendor landscape is still emergent as smaller, early market leaders struggle to match the scope and reach of these larger companies. Although we see some early signs of market maturity, such as strategic M&As, the population of MSPs remains volatile, and the degree of focus and investment on the MSP business is in flux. If a mature vendor is important to you, choose MSPs that have not merely a long business history but, rather, the greatest longevity in this hyperscale cloud managed service business specifically.

  • Customers are demanding more breadth and depth from MSPs than they were last year. A noticeable trend in this year's data is customers making more uniform requests across Mode 1 and Mode 2 requirements. Specifically, MSPs are reporting deals that consistently feature function platform as a service (fPaaS) and other serverless technologies, and application-level services like design and development. Although you may consider your requirements to be more constrained, you should consider that most organizations that adopt public cloud infrastructure are quickly moving to embrace it more completely. This requires a vendor with more capability than you may initially think is necessary.

  • There will be an increase in M&As to accompany market growth. Although the total number of MSPs will grow over the near term, customers should expect that M&As are highly likely in the next five years. While most M&As will be nondisruptive for service delivery, not all will. Expect that MSPs with less than $100 million in total revenue (for the company as a whole) will be particularly attractive acquisition targets. The most attractive targets will be less than $10 million in revenue, but they will have very strong service delivery and significant intellectual property. However, choosing a larger vendor does not help insulate a customer from market consolidation, because such vendors are likely to buy a small MSP and replace their own service offerings with that MSP's superior offerings. If minimizing the likelihood of M&A impact is important to you, choose midsize high-quality MSPs.

  • Pricing and offering structure are evolving. The cloud managed service business continues seeking to understand how customers actually use managed services in conjunction with hyperscale providers. One recent and profound effect is the increased importance of professional services — in addition to the managed services — in the offering. Application-level services, such as expertise in specific enterprise apps, advice on DevOps adoption, and cloud-native application design and development, are just some of the services that customers are now demanding, and that MSPs are quickly responding to provide. Changes in operations management, driven by standardization, automation and DevOps, impact how services are delivered and how they are priced. Furthermore, technological shifts, such as the use of containers and serverless (function PaaS) architectures, rather than VMs, must be incorporated into the offering structures and corresponding pricing. It is currently common for MSPs to charge for their services as a percentage of the customer's consumption-based spending on the hyperscale cloud provider, but many MSPs are also exploring a wide variety of alternative pricing structures. Broadly, these solutions should become less expensive over time. If cost-efficiency is extremely important to you, ensure that multiyear deals incorporate some assumptions about declining costs, and accept the provider's pricing incentives to use greater automation in your deal.

  • Automation is critical. MSPs need to either build their own automation or have a strong ability to choose commercial tools and integrate them — or both. Either way, MSPs need to be adept at software engineering — creating intellectual property in the form of templates and other repeatable automation, and building repeatable services that can be delivered using a fully or substantially automated process. This is vital to delivering a competitively priced service.

  • People are still important. The more that is automated — the fewer mindless manual tasks that are necessary — the more important the remaining people become who perform tasks that require human expertise, judgment and adaptability. Customer intimacy increases in importance. Offshoring offers fewer attractions when the tasks that used to be performed by low-wage employees are now done by automation. In-region (or even in-country or local) presence becomes more valuable. DevOps and agility require more interaction with developers. A closer alignment with the customer's business, industry knowledge and knowledge of the customer's applications is necessary to help the customer maximize the value of the cloud investment.

  • The Azure MSP ecosystem is growing quickly. AWS has built the most mature MSP ecosystem, but Microsoft Azure is catching up quickly. This is consistent with the dramatic growth increase we have observed in Azure adoption during the year leading up to this report. The GCP MSP ecosystem is still nascent, showing little comparative growth in that time period. Although GCP's adoption is starting to show a noticeable uptick, only a few of the MSPs in this Magic Quadrant have a significant GCP business.

  • Managed services for AWS and Azure are frequently delivered differently. Customers that use AWS (or GCP) tend to prefer a more automated DevOps-oriented approach that exploits the full capabilities of AWS, and maximizes agility and developer productivity. Azure customers tend to prefer a more traditional approach, which is typically more manual, less dynamic and less agile. These customers are often looking for something that seems like a traditional managed hosting or DCO solution but that is delivered on Azure rather than on-premises infrastructure. Consequently, even MSPs that offer support for multiple cloud platforms may have different managed service offerings on each platform.

  • MSPs rarely deliver true multicloud solutions. Customers rarely have a cloud-spanning application — that is, an application with components split across multiple cloud providers or otherwise running distributed across multiple cloud providers. Rather, some customers will use different cloud providers for different applications. Consequently, while some customers will want a single MSP that can offer services across multiple cloud providers (and there can be benefits from using a single MSP), many other customers will chose different MSPs for different cloud providers. Even so, MSPs are seeking to find appropriate places in their offerings (business process, CMP and tooling, help desk, and support) to unify the experience for customers across all supported clouds, and, in some cases, on-premises or private cloud deployments. (For more information, see "Market Guide for Managed Hybrid Cloud Hosting, North America," "Magic Quadrant for Managed Hybrid Cloud Hosting, Europe" and "Magic Quadrant for Managed Hybrid Cloud Hosting, Asia/Pacific." )

  • MSPs find it difficult to differentiate in their market. Because the market is growing so quickly, it is difficult for these vendors to find meaningful ways to stand out in the crowd. We've seen nothing that is truly unique about any of them. Instead, each is a mix of commonly cited things like vertical focus, specialized intellectual property, market segment or regional focus, tooling, professional services and strategic partnerships. Customers should be wary of statements claiming exclusive capabilities, and instead look for the vendor that offers the set of differentiations that matter the most to their objectives.

Evidence

  • Survey of 153 cloud MSPs in 2017

  • Service provider interviews in 2016 and 2017

  • Gartner client inquiries in 2016 and 2017

  • Documentation, including proposals and contracts, from the service providers in 2017

  • Customer references from the service providers in 2017

  • Public information from sources such as U.S. Securities and Exchange Commission filings, press releases, vendor websites and community support forums

Note 1
Other Hyperscale Providers

We note that there are other cloud service providers that are often included in the hyperscale list — specifically, Alibaba Cloud. For this iteration of this Magic Quadrant, the scope is constrained to the three we have named: Amazon Web Services, Microsoft Azure and Google Cloud Platform. Future iterations may define this set more broadly.

Note 2
AWS's MSP Partners Directory

A comprehensive list can be found in the AWS MSP Partners directory .

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.

Market Responsiveness/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.