Cloud Migrations Boost Australian Microsoft Ecosystem

The acceleration of digital transformations and cloud implementations by Australian companies and government agencies is expanding the country’s Microsoft cloud ecosystem, according to a new research report published today by Information Services Group, a global technology research and advisory firm.

The 2024 ISG Provider Lens™ Microsoft Cloud Ecosystem report for Australia finds that organizations’ cloud strategies are evolving quickly, shaped by concerns about cloud costs, geopolitical instability, and a growing risk of cyberattacks. In turn, the market for Microsoft cloud-related services is also evolving. The adoption of Microsoft Power Platform and Dynamics 365 is especially strong, with enterprises increasingly focused on building applications correctly as they migrate to the cloud.

“Australian companies are cautious about technology, seeking a strong return on investment,” said Ben Rossiter, ISG technology modernization lead in Australia. “They are partnering with providers for the best possible implementations.”

Many Australian organizations are still catching up with dramatic changes in employee and customer expectations that accelerated with the COVID-19 pandemic, ISG says. Service providers are helping them deploy the right devices, network security, and collaboration tools to keep remote workers happy, safe, and productive.

Microsoft’s AI strategy for Azure continues to evolve amid growing enterprise interest in using AI to augment human productivity, the report says. Companies are under pressure to quickly introduce new products and services and see AI as a tool to boost employees’ innovation efforts. They are expected to increase their adoption of AI, and especially conversational AI, in Azure implementations over the next few years.

As generative AI (GenAI) emerges as a key technology for many enterprise functions, companies are integrating AI with their workflows, business applications, and collaborative platforms, ISG says. GenAI services for Microsoft Clouds are helping them to prepare for this new wave of capabilities. Organizations that understand how to use GenAI are expected to outperform those that come late to the technology.

In the wake of the pandemic and a recent surge in ransomware attacks, Australian organizations have grown more comfortable with putting applications on the cloud, ISG says. Many, though not all, have already migrated applications with low to medium complexity and are now ready to trust complex core systems such as SAP to the cloud. SAP’s announcement of the impending end of life for its on-premises products has accelerated this trend.

“Some Australian organizations are still reluctant to put business-critical applications on the cloud,” said Jan Erik Aase, partner and global leader, of ISG Provider Lens Research. “Service providers can educate them on how to make the transition easily and minimize risks.”

The report also examines other Microsoft cloud trends affecting Australian companies, including the rising importance of data governance and providers’ shift from IT-centric to customer-centric approaches, focusing on end-user experience to drive business outcomes.

For more insights into the Microsoft cloud challenges facing Australian enterprises, including the growth of unstructured data and a shortage of resources for digital transformation amid rising costs, along with advice for addressing them, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ Microsoft Cloud Ecosystem report for Australia evaluates the capabilities of 40 providers across five quadrants: Managed Services for Azure, Microsoft 365 Services, SAP on Azure Services, Power Platform Services, and Generative AI Services for the Microsoft Clouds.

The report names Accenture & Avanade, DXC Technology, Fujitsu, TCS, and Wipro as Leaders in all five quadrants. It names Kyndryl as a Leader in four quadrants and Capgemini, HCLTech, and Telstra as Leaders in three quadrants each. Logicalis, Unisys, and Velrada are named as Leaders in two quadrants each. AC3, Barhead Solutions, Hexaware, Macquarie Cloud Services, PwC, and Tech Mahindra are named as Leaders in one quadrant each.

In addition, Infosys is named a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in three quadrants. Engage Squared, FiveP Australia, HCLTech, Insight, and Kyndryl are named as Rising Stars in one quadrant each.

Customized versions of the report are available from Barhead Solutions, Logicalis, Unisys, and Velrada.

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

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