Hyperscalers accelerate business model disruption in telecom


Join Principal Analyst Chris Antlitz Thursday, Oct. 20, 2022, at 1 p.m. EDT/10 a.m. PDT for an in-depth discussion on the business model and business case for hyperscaler network ownership, as well as key use cases for which hyperscalers intend to leverage their networks.


Additionally, Chris will give an exclusive review of TBR’s latest Hyperscaler Digital Ecosystem Market Landscape, during which he will discuss hyperscalers’ disruption of the telecom industry. Our research tracks how and why the world’s largest hyperscalers are disrupting industries to unlock economic value in the digital era, with specific focus on the disruption of the telecom industry. The report focuses on Alphabet (Google), Amazon, Apple, Meta Platforms (Facebook), Microsoft and Rakuten.


In this FREE webinar you’ll learn:

  • The business model hyperscalers are employing for network connectivity
  • Key use cases for which hyperscalers intend to leverage their networks
  • Implications of hyperscalers’ new business model for connectivity on telcos and cablecos





Previous TBR webinars can be viewed anytime on TBR’s Webinar Portal. For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

KPMG takes purposeful design and commitment to talent to a new scale with Lakehouse

Emerging from the pandemic, a training facility in a class of its own

On July 20 and 21 TBR visited Lakehouse, KPMG’s purpose-built training facility in Orlando, Fla.’s, Lake Nona neighborhood. KPMG opened the facility in early 2020, closed it temporarily during the initial months of the pandemic, and reopened incrementally starting in late 2020, with operations now at full capacity. During TBR’s visit, three characteristics stood out among a wide range of thoughtful design details, strategic investments and fit-for-purpose spaces: Everything about Lakehouse reinforces KPMG’s commitment to the firm’s professionals: The environment itself minimizes stress and maximizes opportunities to interact in-person, and the place buzzes with an energy uncommon in a training and learning facility.


Seemingly reinforced by every design decision, Lakehouse was built by KPMG for KPMG’s professionals. Without clients or non-KPMG professionals roaming Lakehouse’s campus, conversations among colleagues can be more open and direct, without the need to check a name tag or remain circumspect. During TBR’s visit, multiple KPMG partners mentioned the freedom Lakehouse provides to have unplanned discussions with longtime colleagues and new acquaintances.



Free Webinar: The coming IT consulting battle – Who will win and who will lose among hyperscaler, India-centric and tech-led IT services players?


By design, making interactions seamless, stress-free and purposeful

The sheer size of Lakehouse and the investment the firm made in the facility reinforce KPMG’s commitment to its professionals to expand their knowledge and develop their career paths while providing them with top-class amenities, support and services.


  • Centrally located classrooms, designed for large and small sessions, cement the idea that Lakehouse is not a showcase or a conference site but rather a learning center — a design emphasis that also reinforces KPMG’s culture.
  • Based on our observations of the classrooms and interactions with professionals on-site, the Lakehouse design facilitates intermingling across every level of professional experience, with an openness that allows for chance discussions. Multiple KPMG professionals — before, during and after TBR’s visit — brought up the social, genuine and supportive vibe that seems to permeate Lakehouse, sustained by KPMG’s overall culture.
  • With an all-inclusive design, from overnight accommodations, seemingly endless food options, a top-flight gym, and other amenities, the entire Lakehouse campus contains everything needed for a few days of learning and meetings, minimizing stress and maximizing the amount of time people can spend with each other, which is invaluable after two years of virtual meetings.

During a post-visit discussion, a KPMG professional echoed TBR’s highly positive experience by saying, “The staff at Lakehouse are truly amazing. They really make the whole experience incredible.” The same professional also brought up a seemingly small feature that made a large impression on us. During TBR’s tour, the gym staff were not at the desk or in the various workout rooms because they were making rounds through classrooms, leading get-up-and-move-around breaks. As the KPMG professional said, unprompted by TBR, “The wellness breaks that we had throughout the day were great. Those breaks included stretching, games or meditation.” In every interaction we had with KPMG professionals, both on-site and during discussions after our visit, people agreed the firm’s attention to detail creates a welcoming atmosphere at Lakehouse.

Improving clients’ Ignition Center experiences by colocating at Lakehouse

Given the emphasis on keeping conversations flowing freely among KPMG professionals and the overall atmosphere of learning, training and camaraderie, KPMG’s decision to include an Ignition Center at Lakehouse struck TBR as potentially problematic.

When management consultancies and IT services vendors first launched innovation and transformation centers — and TBR has visited more than 40 of these centers in the last five years — one of the defining features was location: The centers were separate from the main offices, sometimes even in a separate city or neighborhood, reinforcing that this space was built for discussions outside of clients’ normal expectations of these vendors. For example, clients would go to PwC’s Experience Center in Hallandale, Fla., a short drive from Miami, and would know they were not getting the old-school tax and audit PwC. Poorly designed centers typically failed on this point.


TBR once “toured” a one-room “Innovation Center” at an IT services vendor’s Dallas offices that became known within TBR as the “Digital Closet.” In that context, KPMG’s decision to place a new Ignition Center colocated within its massive internal training and learning facility seemed surprising. Once on-site, TBR realized clients will not see the traditional KPMG offices when they attend sessions at Lakehouse Ignition Center but will instead see and understand KPMG’s massive commitment to training and professional development. They will also see a relaxed KPMG, not the buttoned-up, suits-and-ties auditors, as well as the scale of the consultancy they are working with.


Previously, Big Four firms needed to take clients away from the traditional Big Four offices to show how much the firms were changing. Now, KPMG can say, “Hey, we’ve changed and you can see it all around you at Lakehouse.” Colocating an Ignition Center at Lakehouse does not eliminate other challenges common to innovation and transformation centers, such as knowledge sharing across centers and countries, bringing in the right clients at the right time for the right kinds of sessions and staffing, and incorporating technology partners. Further, a novel challenge with Lakehouse will be hosting clients on-site without compromising the freedom KPMG professionals feel when they are at Lakehouse. None of these challenges has been insurmountable, and TBR will closely track how well the Ignition Center at Lakehouse meets KPMG’s and its clients’ expectations.

Thoughtful. Purposeful. By design.

Without question, KPMG’s Lakehouse sits at the apex of training facilities, with an unsurpassed blend of purposefully designed major components as well as subtle elements that solidify the firm’s culture and commitment to its people. At the end of the tour, a KPMG leader pointed out the glass and light artwork in the main area, a place everyone staying at Lakehouse passes through multiple times a day. By design, over the course of the week, the lights slowly shift from a multitude of colors to just one color, quietly reinforcing that every individual is different, but everyone belongs to one firm. Thoughtful. Purposeful. By design. All of which sum up Lakehouse.


TBR’s ongoing coverage of KPMG includes semiannual profiles as part of the Management Consulting Benchmark and the Innovation and Transformation Centers Market Landscape, as well as analysis, when appropriate, within the Digital Transformation portfolio.

Project Everest positions EY to deepen the value it provides to clients


EY has evolved with the management consulting market, growing a sizable technology consulting practice and increasingly partnering with tech giants and niche software vendors to respond to client demand for advice and assistance infused with technology. The regulatory constraints around EY and the rest of the Big Four, however, have not evolved. As EY’s audit client base has increasingly included technology giants, limiting the firm’s consulting opportunities, internal pressures and external forces have reached a point where EY has had to consider a split. After evaluating client demand, its portfolio and market dynamics, EY announced plans at the beginning of September to move forward with a split — coined Project Everest — of the firm’s consulting and audit businesses. EY’s consulting business will go public and provide tax, business advisory, and technology adoption services while the remaining legacy EY will continue to deliver audit services.


To support the firm’s goal of driving business outcomes, EY will leverage four new areas following the separation. First, independence from audit constraints will allow EY to broaden engagements with new clients around technology, data, and environmental, social and governance (ESG) needs, on which the firm could not previously advise. Second, partnerships with technology vendors that were previously restrained because of audit engagements, such as those with Amazon Web Services (AWS) (Nasdaq: AMZN), Salesforce (NYSE: CRM) and Google (Nasdaq: GOOGL), can be deepened. EY has indicated it audits 25% of the Fortune 500 firms, which means the firm will have ample opportunities to deepen its technology-centric partnerships, such as developing scale through partner-oriented practices including both talent and platform-based services. Third, EY will leverage partnerships to create future-proof solutions on the cloud and deliver on a wider range of client needs. Lastly, to provide higher-value business advisory, EY will grow its tax and legal engagements to support clients’ additional needs that cross business segments and operations.



Free Webinar: The coming IT consulting battle – Who will win and who will lose among hyperscaler, India-centric and tech-led IT services players?


Talent landscape

As with any major organizational transformation, EY risks losing talent through the shift, but efforts to include share compensation and allow individual countries to decide whether to take part in the split will help the firm retain and recruit staff to support the transition. Additionally, the opportunity to pursue new advisory and technology transformation engagements will serve as a retention point, enabling staff to expand their skills and move into newer areas. Growing technology platforms and solution development skills will remain a key part of EY’s business proposition, but the firm recognizes it will not become a technology hub and looks to strengthen its existing 80,000 technology-oriented staff to facilitate portfolio and client relationships expansion instead of greatly accelerating hiring to reach the scale of competitors such as Accenture (NYSE: ACN), which manages around 700,000 employees.

Partner ecosystem

As EY’s partner ecosystem evolves to include newer partners such as Salesforce, AWS and Google, the firm will look to combine existing advisory and implementation skills with partner cloud solutions and platforms. The partnerships will serve to build skills, facilitate interactions within centers of excellence, and ensure execution and delivery of technology solutions. For example, growth around industry clouds and capabilities associated with platforms will depend on ecosystem partners to develop solutions and address more specific business needs. Narrowing its capabilities by embedding partner expertise to support supply chain and data needs will allow EY to penetrate its client base and increase the contract value of existing relationships.


EY will not likely face pressures in forging partnerships with technology vendors that were previously off limits. While the partners have pre-existing relationships with other IT services vendors such as Deloitte and Accenture, EY’s reputation and project history with clients will validate the firm’s credibility, helping to provide additional opportunities for the partners as well as the firm.

Impacts for other vendors

As EY progresses through the split, the firm will look to expand its partner ecosystem, growing its breadth of offerings around technology and benefiting from increased scale within the cloud space. The lack of regulatory constraints around partnerships will allow EY to offer a broader set of solutions and services that can be integrated more seamlessly into clients’ existing IT environments. The ability to forge these partnerships will create pressure on peers such as Accenture, which can deliver on a similar set of services and has a similar reputation for quality and industry expertise. EY will retain its client relationships, focusing on deepening engagements around expanded capabilities with partners.


EY made the decision to split the firm in response to client demand for additional services beyond traditional audit or tax. Freeing the consulting business from regulatory requirements will help EY retain clients and potentially recapture clients that can now work with EY across a broader set of services. Emphasizing a focus on business value and outcomes for clients will enable EY to preserve its market reputation as the firm executes on the transition while also maintaining relationships with clients.


While EY will likely benefit from the additional opportunity around talent acquisition as well as an enhanced value proposition to compete for additional advisory and transformation engagements, the firm could also face some pressures within the market. Competitors such as Accenture and IBM (NYSE: IBM) that have pre-established technology backgrounds, paired with advisory talent and complemented by partner ecosystems, could pressure EY’s ability to grow outside of its traditional consulting engagements as it markets with a refreshed image. EY’s existing culture, which is relaxed and focused on entrepreneurial activities, will translate into a transactional sales approach at the new company that puts clients at ease.

Channel partner strategies: Services, acquisitions and partnerships

Distributors and VARs are critical members of the devices, infrastructure and ISV ecosystem. They are also increasingly building their own differentiation to win revenue and margins in a crowded market.


Join Principal Analyst & Engagement Manager Angela Lambert and Senior Strategy Consultant & Principal Analyst Geoff Woollacott Thursday, Oct. 13, 2022, at 1 p.m. EDT/10 a.m. PDT for a discussion on the channel partner strategies distributors and VARs are using to evolve their traditional businesses.



In this FREE webinar you’ll learn:

  • How channel partners performed in the wake of the pandemic, as well as market expectations for the remainder of 2022
  • How leading VARs and distributors are positioning for growth
  • Opportunities and challenges in adopting more services-centric go-to-market models





Previous TBR webinars can be viewed anytime on TBR’s Webinar Portal. For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

SoftwareONE prioritizes reliability over innovation in clients’ technology and commercial journeys

On July 11, TBR met with SoftwareONE executives to discuss how SoftwareONE fits within the competitive landscape for SAP Business Suite 4 HANA (S/4HANA) software and IT services. The executives included Chief Marketing Officer Susanna Parry-Hoey, President of Solutions & Services Bernd Schlotter, Chief Technology Officer Mike Fitzgerald, and Global Analyst Relations Director Jochen Wolf. During the introductory discussion for TBR, the SoftwareONE team provided extensive details about the company’s size, strategy and performance. The following reflects both the July 11 discussion and TBR’s ongoing analysis of the software and IT services space.

Looking into clients’ current environments to understand the future

In TBR’s view, SoftwareONE’s business model and operations over time have positioned the vendor to understand software and IT services customers’ changing behaviors, in terms of how customers use technologies and complementary services as well as how customers adjust their budgets and spending patterns.


At a time when accelerated moves to cloud appear to be every enterprise’s top priority, SoftwareONE’s view into customer behavior provides a potentially differentiated approach to serving clients’ needs. Translating those views into analysis and shared knowledge and turning accelerated decision-making into growth of SoftwareONE’s own solutions and products will challenge the vendor in the near term, but TBR believes the executive team presented a compelling case for SoftwareONE’s potential in a highly competitive market.


In outlining the company’s approach, Fitzgerald said SoftwareONE provides clients a “safe pair of hands” and noted the vendor’s contentment with solving problems, “helping clients with the basics.” In TBR’s view, this grounded assessment of SoftwareONE’s place in the ecosystem reflects the company’s strategic decision to remain exceptional at what it can do, rather than trying to expand into adjacent or tangential areas, potentially compromising quality delivery and SoftwareONE’s brand.


Additionally, TBR believes many clients find “innovation” scary and unnecessarily disruptive when they are simply trying to keep pace with moving to cloud or retiring old software. Being reliable — a safe pair of hands — may be a greater strength than being perceived as innovative.


Free Webinar: The coming IT consulting battle – Who will win and who will lose among hyperscaler, India-centric and tech-led IT services players?


A full-spectrum services, software and solutions vendor, deeply rooted in the ecosystem

To provide context, the SoftwareONE team walked TBR through some of the company’s key highlights, including a roughly 9,000 employee headcount, 65,000 clients across 90 countries, and 2021 revenues that topped $1 billion, split almost evenly between the Software & Cloud and Solutions & Services business units. The executives noted that 2021’s revenues represented a 16% increase year-to-year, with the Solutions & Services business unit growing around 38% in the same comparison.


Additionally, the team described core services offerings as focused on customers’ technology journeys and commercial journeys. Offerings for the former are grouped by application services, cloud services, SAP services, and digital workplace. For the commercial journey, SoftwareONE has capabilities around IT asset management, software digital supply chain, FinOps (cloud financial management), and software publisher advisory.


The SoftwareONE team provided details on the newly launched Goatpath by SoftwareONE brand of offerings, which are a blend of cloud-enablement software and a marketplace, described as an “E-commerce for buying, selling and managing software, services and solutions.” SoftwareONE executives described a company capable of meeting clients’ needs across the “advise & design, buy, implement & build, and optimize & manage” spectrum through both its own solutions and services and those of technology partners, including the hyperscalers and SAP.


The evolution of SoftwareONE’s strategy, from transactional to a true partnership model with customers, fills a clear gap for many end customers. As cloud technology becomes a larger part of most organizations’ IT strategy, the need for guidance, implementation and ongoing managed services is becoming quite clear. The largest enterprise customers can look to global systems integrators for that guidance, but midsize and smaller organizations need a partner that can match their scale and budgetary constraints. With more than 65,000 clients, SoftwareONE is serving organizations across a wide spectrum, filling the gaps end customers have in designing, procuring and managing their increasingly cloud-led IT strategies.


SoftwareONE has a huge client base to build on, and the company aims to offer net-new IP and unique value that support customers’ cloud transitions. Unique IP with the Goatpath brand and growing managed service capabilities illustrate that the company is about much more than just augmenting clients’ internal staff. Furthermore, SoftwareONE remains focused on ROI as it touts its cloud optimization and cost savings outcomes from more active management of cloud and technology solutions. In these ways, SoftwareONE is modernizing its value proposition in line with the IT strategies of its sprawling base of customers of different sizes.

3 key points: SAP, sales and SMEs

Considering SoftwareONE within the broader market, particularly for IT services, a few points stand out for TBR:

  • A fast-growing, well-staffed and experienced SAP practice gives SoftwareONE an advantage in a crowded market for SAP-related services. For instance, SoftwareONE’s expertise across both SAP and all public cloud providers (Azure, Amazon Web Services and Google Cloud) will strengthen its value proposition to enterprises considering running SAP in the cloud and moving to SAP S/4HANA. The growing adoption of public cloud infrastructure to replace on-premises or private cloud hosting as well as the closing window to replace the old ECC solution with next generation S/4HANA is driving higher demand for SAP services; yet organizations are less keen to embark on large and complex greenfield projects and prefer a more pragmatic and step-by-step approach for their journey toward S/4HANA running on public cloud. As such, by threading its SAP practice together with talent and experience with the hyperscalers, SoftwareONE is positioned to benefit from this trend and TBR expects SoftwareONE’s SAP revenue growth will continue to outperform that of peers.
  • With separate teams selling advisory and software, SoftwareONE has clearly learned a lesson many consultancies new to the SaaS game have only begun to understand: Sales motions for software — especially marketplace click-to-buy models — fundamentally differ from sales motions for consulting, and individuals or teams rarely excel at selling both. That being said, SoftwareONE is able to capitalize on both license renewals and cloud moves as triggers for cross-selling the two motions.
  • Small and medium enterprises account for around 70% of SoftwareONE’s clients, giving the company an exceptional presence in a marketplace increasingly eyed by the Big Four firms and other consulting-led IT services vendors. This presence, combined with SoftwareONE’s relationships with the hyperscalers and certified talent, will likely lead the Big Four and others to increasingly seek opportunities to partner with SoftwareONE, especially as SoftwareONE builds its talent and client base in Latin America, Europe and Asia Pacific.

Know Your Customer to be a better partner and play to your strengths

For TBR, SoftwareONE’s ability to see into its clients’ technology environments, buying behaviors and upcoming needs — akin to U.S. banks’ Know Your Customer requirements — provides the company an excellent opportunity to compete aggressively in a crowded and messy marketplace for services, solutions and software. TBR thinks SoftwareONE is doing three things particularly well by leveraging this position.


First, the company values partnering with the hyperscalers and SAP, even if that creates potential for competing with them.

Second, SoftwareONE works with clients where they are, not where they could or should be. Rather than direct clients toward services and solutions better suited to more technologically advanced or mature enterprises, SoftwareONE stays within a client’s space and immediate needs, perhaps reflecting that deep understanding of the client’s environment and budget. SoftwareONE can provide innovative thinking and road maps for transformations, but rather than lead with the imaginative future it emphasizes the safe pair of hands.

Third, SoftwareONE’s executive team has a firm handle on the company’s future, through strategic acquisitions, smart partnering with the hyperscalers and SAP, and investments in company IP to complement ecosystem partners’ offerings and expand value across the ecosystem. Play nice in the sandbox, listen to what your clients want, and play to your own strengths to build sustainable growth — a proven formula for success in the IT services and software marketplace.


TBR’s coverage of the software, cloud, IT services and management consulting markets includes vendor-specific reports, multivendor benchmarks and market landscapes, published quarterly or semiannually. Foundational research for this special report included the following:

  • Cloud Ecosystem Market Landscape
  • Cloud Professional Services Market Landscape
  • IT Services Vendor Benchmark
  • Management Consulting Benchmark

Why are Deloitte’s, Accenture’s and TCS’ revenues per hyperscaler practice much higher than the benchmarked average?

Gimme 3 — Insight Interview with TBR’s Subject-matter Experts

In TBR’s new blog series, “Gimme 3 — Insight Interview with TBR’s Subject-matter Experts,” Principal Analyst Patrick M. Heffernan discusses our latest and most popular research with our analyst team.

This month Patrick chats with Principal Analyst Bozhidar Hristov about our latest cloud ecosystems research, including why Deloitte’s, Accenture’s and TCS’ revenues per hyperscaler practice are much higher than the benchmarked average.


Patrick: Why are Deloitte’s, Accenture’s and TCS’ revenues per hyperscaler practice much higher than the benchmarked average?

Boz: Deloitte’s, Accenture’s and Tata Consultancy Services’ (TCS) investments in cloud and overall IT services capabilities enabled each of them to drive conversations aligned to and/or enhanced by core value offerings. For example, Accenture has managed a close relationship with Microsoft since the launch of joint venture Avanade in 2000; Avanade evolved into Accenture Microsoft Business Group in 2019.


Acquisitions also bolstered Accenture’s scale, particularly around Amazon Web Services (AWS) and Google Cloud capabilities supporting the Accenture Cloud First agenda. Additionally, acquisitions help the company maintain a strong foothold in the market and trust with stakeholders as well as capitalize on its household name. In sum, Accenture has done everything it could, relentlessly.


In contrast, TCS has pursued a strictly organic strategy to build scale, relying on its low-cost execution offerings and investments in developing certified and skilled talent. Through distinct business units, TCS has also demonstrated commitment to all three hyperscalers — AWS, Microsoft Azure and Google Cloud Platform — enabling trust between TCS and hyperscaler partners.


Deloitte is a bit of an outlier, with the firm’s success largely rooted in its business compliance relationship and access to C-Suite decision makers, supported by ongoing investments in talent and portfolio offerings. Deloitte has built scale through both organic and inorganic means as the firm tries to balance investment priorities of individual member firms with globally run cloud initiatives.


Deloitte’s relationship with Microsoft is rather unorthodox as the firm audits the tech giant. However, Deloitte is able to circumvent these requirements while staying compliant by providing customer support rather than joint go-to-market efforts. We estimate Deloitte generated over $500 million in Microsoft Azure-related revenue in 2021. Deloitte also provides a use case for the remaining Big Four firms, which must also balance audit relationships with tech advisory and implementation positions.


Graph: Cloud Professional Services Market Share 2026


Patrick: I keep hearing about industry clouds; do you have a breakdown of each vendor’s performance by industry?

Boz: With enterprise buyers viewing industry specialization as table stakes, the need to apply cross-industry use cases will elevate the role of SIs as orchestrators. Building out solutions for today’s problems with an eye toward future opportunities will help vendors capitalize on their investments, but only if they are able to maintain service delivery quality, trust and transparency.


The resurgence of industry clouds is testing services vendors’ mantra around vendor agnosticism as they try to balance commitments to their technology partners with addressing industry-specific client pain points. Industry cloud is far from a new phenomenon, with vendors employing industry-based cloud strategies since 2014, when SAP cited plans to target 25 industries.


Though industry-based clouds found early success, TBR believes uptake was limited as clients were largely focused on horizontal needs as they deployed productivity-based suites. Given the maturity of cloud today, the need for industry-based configurations has increased as adopters pursue custom solutions set against an industry backdrop.


Further, the nuanced nature of industry-based requirements and compliance standards faced by industries, such as financial services, healthcare and government, necessitate vertically tailored offerings. As a result, technology vendor investments around industry-based cloud have accelerated in the last couple of years.


TBR will continue to monitor and analyze vendor performance and ecosystem evolution around industry clouds. We hope to include industry revenue breakouts for IT services vendors by hyperscaler practice area in the next 18 months. But before we can publish our analysis, we need to have confidence in the data and complete all steps in the insights intelligence cycle, from collection through vetting, validating and publishing.


Patrick: I’m not seeing all of the IT services vendors TBR covers. Are there plans to add more vendors to this report?

Boz: Cloud Ecosystems Market Landscape started with 10 vendors across IT services and consulting spectrums, with the goal of providing a fair comparison across portfolio offerings, go-to-market strategies and performance and to set the stage of the market. We will continue to expand the vendor roster, provided there is enough activity and implications across the three hyperscaler practices.


In this month’s blog we’ve highlighted three different strategies well-suited to these IT services vendors’ strengths and positions in the market as well as trends pressuring everyone to change how they partner, particularly in a volatile, yet lucrative market.


Not everyone can or should try to emulate Accenture, TCS and/or Deloitte, but lessons learned around how and why they partner with hyperscalers could be valuable in any IT ecosystem.