ISG Provider Lens™ report sees more companies seeking service partners for scalability, cost reduction and multi-cloud adoption as pandemic effects lead to future-proofing plans
Demand for IT outsourcing in the Nordics is growing as enterprises there expand globally and the region matures as a global technology center, according to a new report published by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
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“The region’s cloud-native mindset and high demand for advanced skills make it a growing market for a wide range of IT outsourcing and cloud services.”
The 2021 ISG Provider Lens™ Next-Gen Private/Hybrid Cloud – Data Center Services & Solutions report for the Nordics finds the number of IT outsourcing deals in the region is expected to increase over the next two to three years, with enterprises seeking partners for scalability, cost reduction and hybrid cloud adoption. Outsourcing is growing fastest in Sweden, followed by Denmark, Finland, Norway and Iceland.
“The Nordic countries have emerged as global centers of technology,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “The region’s cloud-native mindset and high demand for advanced skills make it a growing market for a wide range of IT outsourcing and cloud services.”
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As enterprises expand operations and increase their use of artificial intelligence (AI), machine learning (ML), big data and automation, highly skilled IT workers in the Nordics are in short supply and command high salaries, the report says. Partly as a result of this, most large and midmarket enterprises are looking to outsource IT functions to managed services providers.
The COVID-19 pandemic provided the push for Nordic companies in many industries to implement hybrid cloud and multi-cloud strategies to remain competitive, ISG says. These plans are aimed at future-proofing operations for higher productivity, data-center security, a better customer experience and lower costs. In some cases, companies have seen their hybrid IT plans stall due to a lack of in-house expertise and subsequently have looked to service providers for assistance.
Outdated data centers with complex management requirements are holding some of the region’s enterprises back from achieving digital maturity, the report finds. Automation using AI and ML can eliminate routine IT tasks that take time away from IT departments’ core competencies, increasing efficiency and improving business agility.
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The Nordic region continues to attract global investments in colocation centers thanks to lower energy costs relative to other parts of Europe, ISG says. The skilled workforce, high rate of cloud adoption and a cloud-native mindset at many enterprises also make the area attractive for colocation centers. Other strengths include low average temperatures and less climatic risk, satisfactory connectivity, stable political environments and high availability of renewable energy sources, especially hydro and wind energy in northern Sweden.
The 2021 ISG Provider Lens™ Next-Gen Private/Hybrid Cloud – Data Center Services & Solutions report for the Nordics evaluates the capabilities of 56 providers across five quadrants: Managed Services for Large Accounts, Managed Services for Midmarket, Managed Hosting for Large Accounts, Managed Hosting for Midmarket and Colocation Services.
The report names BaseFarm (OBS) as a Leader in all five quadrants. It names TietoEVRY as a Leader in four quadrants and ATEA as a Leader in three quadrants. CGI, Fujitsu, IBM and T-Systems are named as Leaders in two quadrants each. The report names Accenture, Bulk Infrastructure, Capgemini, DigiPlex, Equinix, Ficolo, Green Mountain, HCL, Interxion (Digital Realty), LTI, TCS, Tech Mahindra and Wipro as Leaders in one quadrant each.
In addition, T-Systems and Visolit are named as Rising Stars—companies with a “promising portfolio” and “high future potential” by ISG’s definition—in two quadrants each. EcoDataCenter, LTI and Sopra Steria are named as Rising Stars in one quadrant each.
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