Report:
Magic Quadrant for Public Cloud IT Transformation Services
How does Gartner define the Public Cloud IT Transformation Services market in 2023?
Providers in the public cloud IT transformation services (PCITS) market offer solutions designed to deliver transformational outcomes via cloud-native professional and managed application services hosted exclusively on public hyperscale cloud infrastructure and platform services. Organizations seeking to use public clouds, like Amazon Web Services (AWS), Google Cloud and Microsoft Azure and others, engage with cloud managed services providers (cloud MSPs) in this market to realize the greatest transformational benefits. This Magic Quadrant offers a view of providers more specifically focused on IT transformation through the use of public cloud services.
Key Facts for Magic Quadrant for Public Cloud IT Transformation Services in 2023
- Publication Date: 16 August 2023
- Document ID: G00776432
- Coverage: Global
- Authors: Mark Ray, Craig Lowery, and 4 more
- Core Purpose: To help sourcing, procurement and vendor management leaders align their needs with 21 providers focused on cloud transformation migrations, new development, and continued operations and optimization through cloud-native professional and managed application services hosted exclusively on public hyperscale cloud infrastructure and platform services.
Strategic Planning Assumptions
No strategic planning assumptions provided.
How was the Public Cloud IT Transformation Services market evolved in 2023?
- Providers offer solutions designed to deliver transformational outcomes via cloud-native professional and managed application services hosted exclusively on public hyperscale cloud infrastructure and platform services
- Organizations engage with cloud MSPs to realize the greatest transformational benefits from public clouds like AWS, Google Cloud and Microsoft Azure
- Market emphasizes application-focused transformation (rearchitect, rebuild, replace) rather than infrastructure-led activities (rehost, revise)
- Engagements are application-led rather than infrastructure-led, with business objectives driving technical solutions
- Solutions are built exclusively with public hyperscale CIPS and connected SaaS
- Cloud-native precepts are emphasized for application architecture and operational models
- Providers must offer both managed services capabilities and application development services
- Market includes 21 providers ranging from large global system integrators to smaller born-in-the-cloud players
- Key trends include data and analytics capabilities, automation, and multicloud support
- Co-solutioning and contracting for business value grew to over 50% of deals
- Market continues to see significant M&A activity as larger providers acquire cloud-native capabilities and talent
What product features are required to be included in this year's evaluation?
- Providers deliver positive business impacts borne from IT transformation. A 'transformational IT outcome' is one that uses new technologies and paradigms to meet or improve upon achieving business objectives.
- Providers emphasize application-focused R's. Rehost, revise, rearchitect, rebuild and replace are generally considered the five R's of cloud transformation. The focus is on rearchitect, rebuild and replace which are application-led transformation services and require substantial software engineering competencies for success.
- The engagement between the customer and the service provider is application-led rather than infrastructure-led. Business objectives are more effectively stated as application and data requirements, rather than technical requirements.
- Solutions are built exclusively with public hyperscale CIPS and connected SaaS. Providers can deliver complete, transformative solutions using only public cloud resources.
- Cloud-native precepts are emphasized for application architecture and operational models. Benefits are maximized when cloud services are used as designed, with technical and operational choices that result in autoscalability, resilience and elasticity, and fine-tuned resource consumption.
- Managed services capabilities are required. Providers must offer the capability to deliver fully managed services for their clients, including oversight of daily operations and optimization.
- Application development services are required. Providers must have some degree of application development capability ranging from modernizing existing code to building new applications from scratch.
- SaaS integration and management is in scope. Providers may deliver services for managing and integrating SaaS into the customer's environment.
- Complex application integration and management is in scope. Providers may deliver services for integration and management of complex enterprise applications from vendors such as SAP, Oracle and Infor in the public cloud.
What are the common features of top products in the Public Cloud IT Transformation Services space?
No common features specified.
Scope Exclusions
- Traditional data center outsourcing services without cloud transformation focus
- Infrastructure-led services that primarily focus on rehost (lift and shift) activities without application transformation
- Hybrid infrastructure services that do not emphasize exclusive use of public hyperscale cloud platforms
- Providers that lack data and analytics consulting competencies or specializations
- Services that do not deliver transformational business outcomes through cloud-native solutions
Inclusion Criteria
Vendors must, among other requirements:
- Must meet one or more of three conditions as of 1 October 2022 for AWS, Google Cloud, or Microsoft Azure (MSP partner program, DevOps competency, and Data & Analytics competency/specialization)
- Must have physical office locations in countries that map to at least two of eight specified regions globally
- Transformational services must represent at least 25% of the provider's total cloud services revenue
- Annual revenue for cloud services must be at least $29 million per year
Ability to Execute — Relative Weighting
- Product or Service - High
- Overall Viability - Low
- Sales Execution/Pricing - Medium
- Market Responsiveness/Record - Low
- Marketing Execution - Low
- Customer Experience - High
- Operations - Medium
Completeness of Vision — Relative 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
FAQs
Q: What does this research cover?
A: This research evaluates 21 public cloud IT transformation services providers based on their ability to deliver transformational outcomes through cloud-native professional services, managed application services, and application development capabilities hosted exclusively on public hyperscale cloud platforms (AWS, Google Cloud, Microsoft Azure). The evaluation covers providers' current service capabilities, market presence, vision for the future, and track record of successful delivery across geographies and industry verticals.
Q: Who should use this research?
A: Sourcing, procurement and vendor management leaders should use this research to identify and evaluate providers that can deliver cloud transformation migrations, new cloud-native development, and ongoing operations and optimization services. The research helps organizations align provider capabilities with their specific needs based on geographic requirements, industry vertical expertise, cloud platform preferences (single or multicloud), transformation approach (infrastructure-led vs application-led), and desired business outcomes. It is particularly valuable for organizations seeking providers that emphasize business value and transformational outcomes rather than just infrastructure efficiency.
Q: What are the mandatory features of vendors included in this market?
A: Vendors must have: (1) Certified partnerships with at least one major hyperscale provider (AWS MSP with DevOps and Data & Analytics competencies, Google Cloud MSP with Application Development and Data Analytics specializations, or Azure Expert MSP with Modernization and Analytics specializations); (2) Global presence with offices in at least two of eight specified regions; (3) At least 25% of total cloud services revenue from transformational services; (4) Minimum annual cloud services revenue of $29 million; (5) Both managed services and application development capabilities; (6) Ability to deliver cloud-native, application-led transformation using exclusively public cloud resources; and (7) Emphasis on delivering positive business impacts through IT transformation rather than just infrastructure migration.
Q: What are some reasons for not being included in this report?
A:
- Failure to meet data and analytics certification requirements across AWS, Google Cloud, or Microsoft Azure
- Insufficient geographic presence (less than two of the specified global regions)
- Transformational services representing less than 25% of total cloud services revenue
- Annual cloud services revenue below $29 million threshold
- Lack of both managed services and application development capabilities
- Primary focus on infrastructure-led services rather than application-led transformation
- Inability to deliver exclusively on public hyperscale cloud platforms
- Limited or no cloud-native application development capabilities
- Primarily traditional data center outsourcing focus without cloud transformation emphasis
Q: What differentiates Ability to Execute vs. Completeness of Vision?
A: Ability to Execute focuses on current service capabilities, delivery quality, operational effectiveness, customer satisfaction, and market presence. It evaluates what vendors are doing now and their track record. Completeness of Vision assesses future strategy, market understanding, innovation, and strategic direction. It evaluates where vendors are going and how well they understand market evolution. Ability to Execute is about present performance and execution capabilities, while Completeness of Vision is about future positioning and strategic foresight.
Reference
- Gartner, Magic Quadrant for Public Cloud IT Transformation Services, 16 August 2023, ID G00776432
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