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Microsoft Partners Find Foothold in German Enterprises With Growing Adoption of Azure, Cloud Services

  • ISG Provider Lens report says pandemic and SAP migrations have accelerated cloud adoption, creating implementation and services opportunities for global and local providers

German enterprises, traditionally slow to adopt cloud computing, are growing more interested in migrating applications to the cloud, particularly to Microsoft Azure, according to a new report published today by Information Services Group, a leading global technology research and advisory firm.

“German enterprises’ emerging interest in the cloud presents promising opportunities for Microsoft and its partners in the region”

The 2021 ISG Provider Lens Microsoft Ecosystem report for Germany finds more companies are looking to the cloud as provider offerings and approaches mature. German enterprises are seeking cloud solutions for greater flexibility and agility in provisioning resources and to more easily access new capabilities. Those that adopt Microsoft’s Azure cloud typically choose it because of their existing relationships with the company, Azure’s enterprise focus and the platform’s capabilities around analytics and the Internet of Things, the report says.

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The sudden need for virtualized operations and remote work caused by the COVID-19 pandemic have helped to increase interest in cloud adoption, ISG says. Many midsize German companies are moving data and workloads to software-as-a-service (SaaS) platforms on the Azure cloud, some taking a “SaaS-only” approach.

“German enterprises’ emerging interest in the cloud presents promising opportunities for Microsoft and its partners in the region,” said Andrea Spiegelhoff, ISG EMEA partner based in Germany. “The German market wants to explore new approaches to the enterprise IT environment, especially with service providers that have deep local resources.”

One factor that has held back cloud adoption is the challenge of complying with complex regulations, especially for business-critical applications at the heart of a company, like SAP, the report says. Germany companies value service providers that have a deep understanding of compliance to help them overcome this hurdle.

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Migration of SAP to the cloud has been one of the most important IT trends at mid-tier and large German enterprises over the past year, ISG finds. Many enterprises using SAP migrated the platform from proprietary hosting solutions to hyperscalers such as Microsoft, creating opportunities for service providers. However, approximately half of German SAP user companies do not see themselves as very far along in their cloud migrations. Bringing SAP onto Azure at even more enterprises will be an important task for Microsoft partners over the next three years, the report says.

Service providers in Germany have begun offering SAP on Azure as part of vertical offerings, which in some cases has allowed them to attract smaller clients within specializations, according to ISG. Instead of partnering only with a large automaker, for example, they may also be able to engage with its suppliers.

German enterprises of all kinds care about access to specialized and skilled local workforces, the report says. While many of the country’s large enterprises are turning to large global providers, they want their partner to have a strong presence in the region with extensive certifications, due to the complexity of large implementations, the report says. Mid-tier companies tend to prefer local providers, again with strong certifications.

The 2021 ISG Provider Lens™ Microsoft Ecosystem report for Germany evaluates the capabilities of 61 providers across six quadrants: Managed Services for Azure – Large Accounts, Managed Services for Azure – Midmarket, Office 365 & Modern Workplace – Large Accounts, Office 365 & Modern Workplace – Midmarket, Dynamics 365 and SAP on Azure.

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The report names Arvato Systems and Devoteam | Alegri as Leaders in five quadrants and Accenture (Avanade) as a Leader in four quadrants. All for One Group, Atos, CANCOM, Capgemini, DXC Technology, Telekom Deutschland (TDG) and T-Systems are named as Leaders in three quadrants each, while AppSphere, Axians, Bechtle and SoftwareONE are named as Leaders in two quadrants each. The report names Allgeier, Cognizant, Computacenter, Data One, glueckkanja-gab, Infosys, infoWAN, Insight, NTT DATA, KUMAVISION, Scheer Gmbh, TCS and Wipro as Leaders in one quadrant each.

In addition, Claranet, Communardo, gluekkanja-gab and Insight are named Rising Stars—companies with a “promising portfolio” and “high future potential” by ISG’s definition—in one quadrant each.

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