Pandemic Boosts U.S. Demand for Cloud Solutions as Companies Seek Greater Agility
The ISG Provider Lens™ report highlights a surge in U.S. demand for cloud-based solutions during the COVID-19 pandemic. Companies are increasingly prioritizing as-a-service applications, with a 33% rise in large cloud-based engagements in Q2 2021, reaching $5.9 billion. This growth includes a 33% increase in Infrastructure-as-a-Service (IaaS) and a 31% rise in Software-as-a-Service (SaaS). ISG emphasizes the importance of flexibility and agility in adapting to market disruptions, with a notable demand for vertical SaaS solutions targeting specific industries.
- 33% increase in annual contract value of cloud-based services to $5.9 billion.
- Infrastructure-as-a-Service (IaaS) rose 33% to $3.9 billion.
- Software-as-a-Service (SaaS) increased by 31% to $1.9 billion.
- Growing interest in next-generation SaaS solutions with advanced technology integration.
- None.
ISG Provider Lens™ report finds enterprises prioritizing spending on as-a-service applications over other IT investments during COVID-19 crisis
The 2021 ISG Provider Lens™ Enterprise Application-as-a-Service Platforms report for the
In the second quarter of 2021, the annual contract value of large cloud-based, as-a-service engagements for the
“The pandemic made companies realize they need more flexibility to respond to major challenges, including COVID-driven facility shutdowns, travel restrictions, workplace health and safety, and other business disruptions,” said
Changes in customer requirements have caused the design of enterprise applications to shift, leading SaaS providers to build platforms with cloud-native technology, user-centric designs and modern application programming interfaces (APIs) for easy integration. As cloud-native applications also address dynamic workload and data requirements, they lead to growing demand for connected cloud infrastructure.
More advanced APIs are helping to drive SaaS growth, according to ISG. These APIs enable channel partners and integrators to easily combine sets of applications that meet the needs of specific customers. This shortens the time to market for new offerings, allowing providers to focus on their core capabilities and develop functions that set them apart.
Demand for vertical SaaS solutions aimed at specific industries is another major growth area, the report says. Providers are focusing on developing pre-built integrations for specific sectors and meeting each industry’s key performance indicators (KPIs). During the pandemic, demand has been especially strong for vertical SaaS solutions in supply chain management and ERP, ISG says.
While the SaaS market has a growing number of players, including small niche providers, industry consolidation to gain the advantages of scale is expected to continue, the report says. Nearly all companies covered in the report have acquired smaller vendors in the last three years. When looking at SaaS providers, clients should consider the chances of the company being acquired and be mindful of support options, ISG says.
The 2021 ISG Provider Lens™ Enterprise Application-as-a-Service Platforms report for the
The report names
In addition, Ceridian, Pegasystems and Ramco are named as Rising Stars—companies with a “promising portfolio” and “high future potential” by ISG’s definition—in one quadrant each.
The 2021 ISG Provider Lens™ Enterprise Application-as-a-Service Platforms report for the
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across
A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.
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