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AWS Ecosystem Helps Drive U.S. Public Sector Cloud Wave

State, local and educational entities turn to service providers for modernization to improve services efficiency and flexibility, ISG Provider Lens report says

State and local governments and educational institutions in the U.S. are outsourcing IT functions and shifting critical software to public clouds, including AWS — actions that few considered before the massive disruptions of the public sector in the past three years, according to a new research report published today by Information Services Group (ISG)  a leading global technology research and advisory firm.

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“Cloud migration is empowering public agencies to turn legacy IT systems into more effective, efficient and flexible environments”

The 2022 ISG Provider Lens AWS Ecosystem Partners report for the U.S. Public Sector finds that U.S. public entities, which were slow to adopt new technologies until the COVID-19 pandemic and its aftermath forced them to quickly shift gears, are stepping up their use of AWS and other major cloud platforms. To achieve the benefits of this transition, the organizations are turning to a relatively small set of qualified providers with a long list of needs.

“Public agencies cannot make the leap from decades-old legacy systems to cloud-based services and applications without significant investments in education, consulting and training,” said Nathan Frey, partner and public sector transformation expert at ISG. “In most cases, that means new service provider engagements.”

IT modernization has been long overdue for state, local and educational (SLED) entities in the U.S., which have lagged far behind private companies in resources and organizational ability to change, ISG says. By pursuing digital transformation, they hope to cut costs, improve operations, better serve employees and constituencies and be prepared for future technological change.

The disruptions caused by the COVID-19 pandemic hit the U.S. public sector especially hard, the report says. Most public organizations did not have polices or processes in place for remote work and were ill-prepared to recover from the Great Resignation in 2021. The public sector had struggled for years to attract and retain workers, especially in IT, and then suffered the highest percentage of staff losses of any sector in the fourth quarter of 2021.

When the pandemic triggered massive new federal funding, the stage was set for SLED organizations to begin rapid digital transformations, ISG says. In doing so, many turned to AWS, which has been involved in developing services for the U.S. public sector and has an extensive partner ecosystem. AWS and Microsoft Azure have the largest partner ecosystems of the major cloud providers, with AWS boasting more IT tools and business services providers.

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Experience is essential to providing IT services to the U.S. public sector, because its contracting requirements are often complex and fragmented, ISG says.

“Cloud migration is empowering public agencies to turn legacy IT systems into more effective, efficient and flexible environments,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Change management is a key capability providers can bring to these clients.”

The report also examines several other trends affecting U.S. public sector entities using AWS, including the rise of SAP migrations to the cloud and the increasing importance of data analysis and machine learning as agencies become more data-centric.

For more insights into cloud-related challenges facing public entities, along with targeted advice on how to evaluate and engage with AWS service providers, see the ISG Provider Lens Focal Points briefing here.

The 2022 ISG Provider Lens AWS Ecosystem Partners report for the U.S. Public Sector evaluates the capabilities of 49 providers across six quadrants: AWS Managed Services, AWS SAP Workloads, AWS Data Analytics and Machine Learning, AWS Internet of Things (IoT) Services, AWS Migration Services and AWS Consulting Services.

The report names Accenture, Deloitte and Infosys as Leaders in all six quadrants. It names Rackspace Technology as a Leader in four quadrants. IBM and Unisys are named as Leaders in three quadrants each, and CGI, Tech Mahindra and Zensar are named as Leaders in two quadrants each.

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