Whether cloud providers will maintain their current growth rates is unclear. “The big debate in this space — particularly around AWS — is whether infrastructure-as-a-service is a commodity service or not,” Snowden says, pointed out that AWS and others have been adding more services to their offerings. Traditional providers would like it to remain a commodity offering—on that they can use as part of their own hybrid cloud deals.
Among the top 10, IBM’s IT services business continued to decline (about 10 percent in 2015) but maintained good operating margins and won big deals. Big Blue has “all the ingredients: of a great managed hybrid cloud story, says Snowden, but has yet to combine them. Of the big traditional players, Accenture has best maintained its growth and margins and “has been smart in making deals with AWS and Microsoft,” Snowden says. Fujitsu has some great hybrid and cloud offerings, Snowden says, but remains a largely Japanese story.
Meanwhile, HP and CSC, who recently announced plans to merge, were under attack by offshore rivals. TCS, the most successful offshore firm on the list, was one of those winning deals. CapGemini’s iGate acquisition, nimbleness, and responsiveness to market demands contributed to its growth But like Atos, it’s ranking was impacted due to the euro-dollar exchange rate, said Snowden. NTT Data built and maintained its position via acquisition and its recent purchase of Dell Services should boost its position next year. Although Cognizant recently revised its growth expectations in 2016 is the offshore firm with the most success recently; Snowden says the company has “strong thought leadership and delivery capabilities.”
One surprise lower on the list was Infosys at No. 14. “Ten years ago, they were the standout provider, but struggled post-recession to really find right strategy,” says Snowden. However, he adds, the company’s 2016 growth has been impressive and Infosys leaders appear to be moving in the right direction—away from the labor arbitrage model.
Next year, Snowden says he expects to see the pure cloud providers even higher on the list. “AWS could reach top 10 next year and top five within three years,” he predicts. At the same time traditional IT outsourcers will be taking service integrator roles. “The integrators will provide a platform as a conduit for their own services and from an ecosystem of other suppliers – cloud pure-play providers, ISVs, VARs,” says Snowden.
“We have already seen many firms launching hybrid cloud management platforms that deliver managed clouds from multiple partners via a single integrated cloud platform: HP’s Helion Network, Accenture Cloud Platform, Infosys’s Cloud Ecosystem Hub, Cognizant’s Cloud 360. This activity has intensified, with firms announcing additional partnerships and supported technologies. The next five years will see this continue with services (and software) increasingly being delivered via these pre-integrated platforms.
The outsourcing firms that don't make this transition—those not at the heart of one of these rich cloud ecosystem—will drop down the value chain providing services to the integrators.”
Sign up for CIO Asia eNewsletters.