Digital transformation cannot escape tech despite vendors’ evolving value propositions

Complexities in developing and managing digital transformation (DT) have fueled tremendous opportunity for vendors across IT and services over the past five to seven years. With the market likely facing another slowdown in the next six to nine months, it will become even more imperative for vendors to rely on the trust and relationships they have built within their clients’ organizations.


With the pendulum swinging back and forth between where DT programs originate — from top-down to grassroots and back — vendors have had the chance to build portfolio and sales motions that appeal to broader buyer personas.


Prediction No. 1: As clients graduate beyond digital transformation, vendors scramble to stay relevant

Principal Analyst Boz Hristov: This trend evolved through the first nine months of 2022. While digital transformation has been a trend for years now, the reality is that more people have talked about it than have taken action, with a plethora of pilots but a scant number of transformations at scale — and most buyers have yet to realize that addressing change management issues frequently trumps addressing technology complexities.


Resolving internal politics creates an opening for consultancies. However, consultancies must be careful about how they approach such opportunities as the expectations of the stakeholder ecosystem have evolved and legacy sales tactics might not work in today’s environment and could potentially backfire and pressure trust and brand.


Executing on their promises without making buyers feel like they are being sold on a particular solution will enable consultancies to build the foundational trust necessary to increase client stickiness, resulting in increasing managed services sales, the North Star that vendors from across the spectrum seem to be following these days.


Additionally, opportunities around Agile coaching, especially among buyers who are further along in their DT programs, continue to create openings for IT services vendors and consultancies. To succeed, vendors must account for the evolving nature of in-house IT departments, which often face internal challenges and may sacrifice tech to gain leadership buy-in and sponsorship of a particular program. We do not anticipate that these trends will slow down and/or be resolved anytime soon, especially as many buyers are just starting to invest in their DT programs.

Prediction No. 2: Funky chairs only matter if you can physically sit in them — The resurgence of innovation and transformation centers

Practice Manager and Principal Analyst Patrick M. Heffernan: If IT services and consulting clients often failed to meet their highest expectations around innovation pre-pandemic, relying on screens to innovate only exacerbated the gap between incremental change and true transformation. Post-pandemic, both clients and the people leading innovation and transformation engagements want to return to in-person sessions, understanding that creativity, serendipity and ingenuity rarely happen in Zoom or Teams meetings.


Three cautionary notes on the stampede back into physical experience centers for design thinking sessions:

  • The “been there, done that” attitude started to show up in our Voice of the Customer research — and while clients may be clamoring to be in-person again, they are going to want assurances their time will be well spent.
  • While we are seeing a resurgence of in-person engagements, we do not expect a similar push to open additional new physical centers, at least not in the near term. The pandemic allowed IT services vendors and consultancies to hone their virtual delivery skills and the metrics around these centers — both of which may contribute to reduced enthusiasm for new physical centers.

Hybrid isn’t it. We were wrong when we predicted all parties involved would embrace hybrid engagements, mixing on-site and remote participants. While some vendors took that approach in the latter months of the pandemic, most now realize the most effective sessions come from either all in-person or all-remote engagements. In hybrid, one set of participants inevitably get a suboptimal experience, so an increasing number of vendors are abandoning hybrid altogether.



Prediction No. 3: New generation of business leaders expect business transformations, not digital ones

Boz: TBR recognizes that both technology and services vendors — particularly those that are publicly traded and must meet Wall Street’s expectations for profitable growth — will not slow their pace of introducing new concepts or portfolio offerings. New opportunity areas like sustainability and the metaverse are on the horizon, and we have observed virtually every vendor we cover make either a large investment or a splashy PR announcement in one or both of these areas.


While these investments drive technological progress, vendors must be careful about how they pitch such offerings, as buyers are usually focused on short- to mid-term issues like transforming business models rather than long-term boiling-the-ocean type of issues. Evolving business priorities vary by industry, which puts further pressure on vendors to demonstrate their value without coming across as too generally focused.


At the same time, buyers seek to diversify risk, which further compels vendors to think about operating as an ecosystem enabler, rather than adopting a “we can do it all” mindset. In TBR’s view, the most successful vendors are those that stay true to their strengths instead of coming across as pushy salespeople. This approach enables them to gradually expand mindshare and wallet share by engaging in challenging discussions about risk sharing rather than simply taking orders.


Getting internal buy-in from vendors’ leadership and establishing a runway that is long enough to try such tactics without being pressured to meet 90-day reporting goals will be key.




Predictions is an annual TBR series examining market trends and business changes in key markets. 2022 covered segments included cloud, telecom, devices, data center, and services & digital.

Changing the norm: Consultancies reimagine portfolios and talent composition

Consultancies continue to evolve portfolio offerings and business structures to better align resources with client needs while also integrating technology within traditional services offerings.


Facing pressures from competitors more experienced in leveraging AI, analytics and cloud adoption for clients’ digital transformations, Big Four firms must balance talent composition around technology and consulting to support the shift in business models to better retain clients and deliver on emerging needs brought out from digital adoption. Additionally, talent composition shifts as traditional consulting units split from tax and audit businesses will create disruption for vendors, freeing opportunities with new clients but also changing competitive landscapes.


While the outlook for management consulting has not drastically changed since December 2021, firms have reoriented their market positioning by establishing business units dedicated to software and technology. The split of EY’s consulting and audit businesses will have a significant impact on the management consulting market, changing the way competitors view EY as well as the way the firm engages with its clients. The change will likely help create opportunities for consultancies with a deeper set of capabilities that address business processing needs as well as touch resource management, portfolio structure and strategy development, all underpinned by technology.


Prediction No. 1: Expanded capabilities require expanded skills, leading consultancies to increasingly invest in education

Senior Analyst Kelly Lesiczka: Changing client needs have led consultancies to transform their portfolios to better align with software and technology services and solutions. As a result, talent composition around technology and engineering staff versus traditional consulting and advisory staff has moved away from historical organizations to support R&D and innovation efforts.


For example, consultancies have maintained or accelerated their acquisition pace, with EY planning to acquire up to 25 firms during the year and McKinsey acquiring four firms thus far. Consultancies will continue to leverage acquisitions as well as partnerships to grow technology-oriented talent, which will help accelerate clients’ post-pandemic transformations and increase their use of digital and software platforms. The acquisitions deliver a mix of technology talent, such as engineers, data scientists and architects, to better work with clients to pinpoint data needs and drive insights.


Training also remains a core piece of vendor strategies to expand talent capabilities, helping to deepen industry and technology skills. Leaning on existing programs with a focus on training hours enables vendors to better grow in-house technology skills.


For example, Accenture is running two parallel tracks with its resource management programs. The first track is to recruit and/or train staff with skills that can provide immediate support in areas such as cloud, evidenced by the launch of a talent hub in Albany, N.Y., focused on training recruits on Salesforce technologies. The second track is to build a pipeline of recruits through earn-and-learn models (i.e., without traditional degree requirements).


Focusing on talent development specialized around technology solutions has remained a core piece of vendors’ resource management strategies. As services remains a people business, the need to invest in talent will dictate whether vendors fall behind, maintain pace with or accelerate ahead of peers, particularly as demand to address a wider range of services from business operations to technology maintenance continues to expand.

Prediction No. 2: Restructuring throes and woes will continue to constrain some management consultancies ability to execute consistently

Kelly: Vendors have looked at ways to optimize operations, including resource management of talent and staff and business practice restructuring. The realignments allow vendors to deepen expertise more easily within different business areas and equip specialized talent to deliver on varying needs. The trend has held true thus far through 2022 as vendors add on and spin out certain business areas.


For example, in May news spread that EY was considering splitting its audit and consulting businesses as the firm hoped to not only address potential conflicts of interest between the two business units but also open up opportunities to partner with vendors it could not previously, such as Amazon Web Services, Google and Salesforce.


In September EY confirmed it would move forward with the split, with plans for EY’s consulting business to go public and provide tax, business advisory and technology adoption services while the remaining legacy EY continues to deliver audit services.


Consultancies recognize the need to transform their business operations to better capitalize on upcoming opportunities and be best positioned to compete for engagements that leverage a hybrid of traditional services and newer technology solutions.


While the Big Four firms will not likely consider massive business spinouts moving through the remainder of 2022 and into 2023, vendors will continue to reorganize business operations work more seamlessly internally, particularly as the consultancies establish flexible in-person and remote working plans for staff.



Prediction No. 3: Sustainability booms for consultancies poised to measure, benchmark and report clients progress

Kelly: Sustainability grows as a primary investment area for clients, leading consultancies to grow their resources as well as establish internal programs to respond to energy consumption and greener technology usage. In 2022 consultancies have looked to partners and acquisitions to deepen knowledge around sustainability tracking as well as different ways to implement more efficient technologies. As regulations change around sustainability tracking, including measuring and reporting to publicize metrics, consultancies are quickly growing their resources to audit energy use.


Deloitte acquired Carbon Care Asia’s advisory business to strengthen its consulting capabilities around sustainability and carbon services in the region. The purchase of the sustainability consultancy will bolster Deloitte’s portfolio offerings across environmental, social and governance (ESG) reporting, climate scenario analysis, net-zero carbon solutions and sustainability research for clients across Hong Kong and Asia Pacific.


Additionally, Boston Consulting Group (BCG) looks to grow its resources to support the strategic development of sustainable solutions. The firm opened a Climate and Sustainability Hub in Asia to focus on facilitating partnerships, driving green ventures, and developing new capabilities and solutions.


To support this effort, BCG also grew its network partnerships, such as with CDP to focus on net-zero goals through the use of the CO2 AI Product Ecosystem platform, and will further integrate sustainable practices within the supply chain for clients.




Predictions is an annual TBR series examining market trends and business changes in key markets. 2022 covered segments included cloud, telecom, devices, data center, and services & digital.

IT infrastructure vendors balance demand hurdles and portfolio strategy in 2022

While 2022 has required IT infrastructure vendors to focus on demand hurdles, including supply chain challenges and growing backlogs, vendors have also continued to invest in expanding their portfolios to capture greater wallet share from customers and create more diversified revenue streams.


Vendors’ portfolio strategies largely center on finding new ways to entrench themselves more deeply into customers’ IT ecosystems, helping to maintain hardware share while also opening up software and services revenue opportunities. During 2022 we have seen the honing of hardware subscription offerings, expansion of ecosystem relationships, and a race to develop competencies in edge compute use cases, all of which data center vendors hope will keep demand steady with market uncertainty looming in 2023.


Prediction No. 1: Infrastructure vendors’ ‘as a Service’ offerings will gain traction as the offerings are refined for specific use cases

Principal Analyst Angela Lambert: Half of this prediction has come true. Without question, IT infrastructure vendors are seeing a boom in the adoption of “as a Service” offerings, with high growth rates across new customer acquisitions and annual recurring revenue being reported by the likes of HPE GreenLake, Dell Technologies APEX and Lenovo TruScale. While most vendors entered the subscription services space via Storage as a Service, in 2022 we have seen additional tailoring of portfolios to better align with overarching vendor strategies. Examples include:

  • HPE GreenLake released a series of Network as a Service capabilities, officially integrating its high-growth Aruba Networks portfolio into the GreenLake ecosystem.
  • NetApp Keystone was first to market with a hybrid cloud offering that allows customers to reallocate spend between on-premises infrastructure and NetApp public cloud services as resource needs change over time, which aligns to the company’s objective to drive growth through cloud software.
  • Pure Storage reorganized its subscription business, renaming Pure as-a-Service to Evergreen//One to better integrate with the company’s other support and maintenance subscription offerings under the Evergreen brand.


On the other hand, while IT infrastructure vendors’ subscription services continue to be refined toward standardized offerings for specific use cases, TBR’s research shows the market is challenged by vendors’ desires to go to market with standard packages that are easier to sell and customers’ desires to customize the packages for their specific needs.


This has led to a high proportion of Hardware as a Service deals being scoped and sold on a custom basis instead of a more transactional model akin to Infrastructure as a Service. Successful vendors will meet customers in the middle by building standard services categories that contain modular services components, which can be easily added or removed in the sales process. After all, the ability to customize and control remains a key value proposition of on-premises infrastructure relative to public cloud.

Prediction No. 2: Hardware vendors embrace the ecosystem

Angela: Go-to-market strategies focused on promoting end-to-end solutions and software-centric capabilities over messaging about hardware features is a persisting trend, with the current spin highly centered on hybrid and multicloud themes. This requires a highly partner-centric strategy, and IT infrastructure vendors have continued to announce enhanced partnerships with the likes of VMware and Red Hat as well as deepening relationships with Microsoft Azure and Amazon Web Services (AWS).


One emerging trend among IT infrastructure vendors not mentioned in our 2022 predictions is embracing a broader ecosystem of customers to increase their relevance and influence in previously untouched IT groups, particularly developers within customer organizations who ultimately influence decisions on where applications are hosted and how they are built. From an execution standpoint, IT infrastructure vendors are focused on automating aspects of spinning up new projects via on-premises infrastructure, supporting a range of container-based technologies and building developer communities within their own ecosystems.



Prediction No. 3: Vendors will carve out niche specialties under the broad banner of edge compute

Angela: IT infrastructure vendors have indeed focused on targeting specific edge compute use cases in 2022, although most appear to be targeting the same verticals, which may call into question the ability to develop niche capability from a hardware-centric solutions perspective. Retail and manufacturing emerged in 2022 as the most popular verticals for developing edge compute solutions, with healthcare a distant third.


After being plagued by labor shortages for the past two years, the retail industry has accelerated its investments in edge compute to help transform the brick-and-mortar experience. Vendors are supporting retail transformations by a range of retailers, from big-box retailers to quick-service restaurants and convenience stores. Edge compute solutions can help employees work smarter by automating the ordering and checkout processes, assisting customers with finding inventory and enhancing in-store app experiences. Beyond the in-store experience, data collected through edge deployments is also used to refine merchandising strategy and redesign store layouts to optimize customer experience.


The manufacturing industry is also a top target for building edge compute solutions based on market size, a high rate of adoption of operational technologies, and a strong connection between manufacturing edge solutions and increased customer ROI. Safety, quality control and preventive maintenance are use cases commonly addressed by vendors, many of which rely on computer vision and the ability to analyze real-time data streams.


Ultimately, adoption of modern edge compute use cases is still on the horizon for many businesses, with TBR’s Infrastructure Strategy Customer Research indicating that only about one-quarter of businesses are investing in edge today, and nearly 40% are evaluating future edge investments, signaling growth opportunity for years to come.





Predictions is an annual TBR series examining market trends and business changes in key markets. 2022 covered segments included cloud, telecom, devices, data center, and services & digital.

How has economic uncertainty impacted the cloud applications market in 2022?

Cloud applications vendors benefited from the disruptions that the pandemic wrought upon enterprises since the initial outbreak, as organizations embraced remote workforces enabled by cloud technologies to maintain business continuity. This trend resulted in a rapid modernization of enterprise IT estates, which guided TBR’s 2022 predictions for the cloud applications market.


Now, well into 2H22, cloud applications vendors are pursing growth amid mounting economic uncertainty ranging from inflation challenges to geopolitical concerns — headwinds that are set to linger well into 2023.


Prediction No. 1: SaaS opportunity size attracts all kinds of new participants

Senior Analyst Evan Woollacott: When looking at 2022, TBR estimated the SaaS market opportunity would reach $225 billion and continue to grow at a rate of more than 10% year-to-year as a confluence of trends ranging from client need for application customization and SaaS vendors’ pursuit of industry outcomes creates new growth opportunities.


Small startup ISVs are the most logical players to be attracted to the opportunity, and the number of these new companies coming to market has continued to grow, even during the pandemic. Through 1H22, multiple legacy software incumbents recognized the shortcomings of traditional partner programs and sought to simplify the programs to encourage cloud ecosystem development.


For instance, during an interview in March, SAP’s SVP of Software Partner Solutions Tom Roberts outlined the company’s plans to adjust fees for partners to join SAP’s Online Marketplace and integrate with SAP systems. SAP plans to waive the traditional 15% fee for the majority of partners that join the Online Marketplace, reducing barriers to entry for niche ISVs that may be wary of the upfront costs. Further, SAP will reportedly reduce the fee partners pay to connect with these systems from 20% of revenue to 15%.


Enabling partner coinnovation, though, will require SaaS vendors to not only offer partner-friendly program constructs but also possess the necessary PaaS capabilities to allow partners to seamlessly integrate their IP within vendor portfolios to accelerate joint time to market. The availability of these assets, together with program benefits like joint S&M funds, will be crucial points of differentiation for SaaS vendors aiming to encourage ISV community engagement in a highly contested marketplace.

Prediction No. 2: Cloud delivery for mission-critical applications inches closer to mainstream

Evan: The overall applications market witnessed a landmark event in 2022, as TBR’s 1Q22 Cloud and Software Applications Benchmark found that Salesforce eclipsed SAP as the largest applications vendor in terms of total revenue, despite Salesforce lacking on-premises application revenue. This event speaks to the level of client adoption maturity for front-office workloads, like S&M and CRM, compared to that of back-office functions like ERP.


Salesforce’s evolution to a SaaS incumbent has been impressive, and the company has increasingly sought to sustain its performance by establishing relevancy outside front-office workloads with solutions like Revenue Cloud, a revenue lifecycle management offering. These portfolio expansion efforts are well timed, as TBR’s 1H22 Cloud Applications Customer Research indicates client willingness to migrate mission-critical applications to cloud is rising, setting the stage for workloads outside the front office to catalyze the next wave of growth for the cloud applications market.


Specifically, TBR’s 1Q22 Cloud and Software Applications Benchmark also found that Business Applications (BA) workloads, which includes applications like ERP, finance and payroll, had the highest mix of benchmarked on-premises revenue at 37% of the 1Q22 BA revenue total, compared to just 11% for benchmarked Sales & Marketing revenue. This represents a vast install base of legacy BA clients to migrate to SaaS offerings, be it SAP’s Business Suite 4 HANA (S/4HANA) or Oracle’s Fusion ERP.


While ERP incumbents like SAP have reported promising backlog growth for SaaS ERP portfolios, converting this opportunity to revenue will require greater involvement of the IT services and consulting ecosystem to mitigate migration complexity associated with workloads like ERP. Application vendors must provide, with partner support, efficient, seamless migrations for mission-critical workloads, particularly given mounting economic uncertainty, which has already resulted in greater IT budget scrutiny across all workloads, evidenced by statements made by Salesforce executives during the company’s 2Q22 earnings call.


Prediction No. 3: Customization becomes the standard for cloud applications

Evan: A confluence of trends guided TBR’s prediction that customization for cloud applications would become table stakes in 2022. This belief has only been strengthened over the past nine months as a litany of predicted indicators materialized, ranging from platform investments to support citizen developers to the accelerated expansion of industry-led portfolios.


At the platform level, vendors like Microsoft and Salesforce have sought to bolster the scope of their PaaS suites. While data integration and management capabilities remain vital to vendors’ multiproduct sales efforts, these same assets also support the inclusion of partners’ technologies alongside their core IP. Likewise, vendor investment has accelerated around self-service developer capabilities and robotic process automation (RPA) assets to provide maturing customers with tool kits to get more out of their deployed SaaS workloads, customizing them according to their specific business processes.


Lastly, supporting clients’ growing appetite for industry customization remains a top investment priority for application vendors, particularly in the healthcare space, where the impact of the pandemic resulted in a rapid shift in how healthcare entities provide services, perhaps best characterized by a surge in the use of telehealth to reduce medical workers’ risk of exposure.


Highlighting vendor efforts, Oracle completed its $28.3 billion acquisition of Cerner in June 2022, immediately outlining plans to enhance Cerner’s core health management system, Millennium, through many new features and improvements, including a voice-enabled user interface and an IoT network for diagnostic devices. Oracle is already starting to verticalize Fusion, announcing Oracle Fusion HCM and ERP for Healthcare, which will incorporate industry-specific rules based on inputs pulled from Cerner and then tied back into HR and financial records within Fusion.




Predictions is an annual TBR series examining market trends and business changes in key markets. 2022 covered segments included cloud, telecom, devices, data center, and services & digital.

With RPA market maturing, UiPath paves the way for enterprise automation opportunities enabled by partners

UiPath’s annual FORWARD conference provides a forum for the company to outline the next phase of its growth aspirations. TBR attended this year’s event, FORWARD 5, alongside 3,500 participants, including representatives from nearly 1,000 partners, and learned about UiPath’s goal to build on its position as a leading vendor in the robotic process automation market — in which it reportedly holds over one-third in market share — to become an automation platform capable of addressing enterprise transformation needs across all lines of business of an organization. To achieve this objective, UiPath’s ecosystem partners, from IT services and consulting firms like EY to cloud platforms like Microsoft, will be crucial. Similar to previous FORWARD events, UiPath reiterated its desire to scale within its existing install base — a number that now exceeds 10,500 global customers — by selling business outcomes.

Turning the corner from a pure play RPA vendor to an enterprisewide automation vendor compels UiPath to stay the course of its portfolio expansion

Three years ago, UiPath saw the opportunity to develop a platform that will help it build the de facto layer that will enable enterprises’ core processes from ERP to HR and finance to identify, gather and manage data with minimal human intervention. Fast-forward to 2022, and UiPath is adding modules to enable its Business Automation Platform (BAP) to meet its goal of departing from being viewed as purely a robotic process automation (RPA) vendor.

Combined with the purchase of the no-code AI communications vendor Re:infer, these elements will enable UiPath to provide support in high-volume communications channels — across email, chats, service desk and CRM notes — augmenting the task mining cycle and providing enterprises with key insights around how business gets done. As UiPath strives to bring together integrated discovery and automation to optimize enterprise processes, BAP provides the layer between enterprises’ processes and employees with three distinct functions enabled by UiPath’s portfolio and organized into three categories: Discover, Automate and Operate.

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While the majority of the opportunity remains within the Automate cycle, the acquisitions of Process Gold three years ago and now Re:infer have added the necessary modules and capabilities for UiPath to continually uncover opportunities throughout the cycles of process mining, task mining, communications mining and idea capture. We view these cycles as necessary steps for UiPath as it seeks to elevate the value of its platform and provide the enabling layer for enterprises to use automation for innovations and operations.

With cloud becoming the backbone of enterprises’ digital transformation programs, UiPath also seeks to find a spot in the otherwise crowded technology space. Developing a solution that will allow enterprises to migrate, automate and manage their cloud workloads provides the company with the necessary use case to demonstrate the value of its API-led automation and integration services, as these assets allow UiPath to standardize the opportunities around BAP. We believe the long-term opportunity around integration services for UiPath depends on the company’s ability to not just build connectors — which it has done quite well, supporting over 2,400 clients that have purchase integration services and over 5,000 active connections — but also extract the data that gets processed through the connectors.

We believe this data will be invaluable to UiPath’s partners as they seek to elevate the value of automation from a discretionary to nondiscretionary line item of IT and line of business (LOB) budget spend. Additionally, UiPath’s integration services supports multiple personas from Centers of Excellence and IT through RPA and app developers and citizen developers, which we believe will help UiPath to build the orchestration layer.

The technology partner ecosystem will be vital in supporting UiPath’s evolution from RPA incumbent to an enterprise automation platform at scale

Cloud platforms provide the infrastructure backbone and data center footprint to expand the addressable market of UiPath’s proprietary technology. Further, these same entities power the SaaS and on-premises workloads, enabling organizations’ business processes and workloads. UiPath must be able to reflect these workloads in its catalogs of prebuilt integrations to deliver on its promise of enterprisewide automation. By deepening its leverage of the technology partner ecosystem, UiPath will gain access to a wider variety of enterprise workloads and, more critically, provide customers with its growing array of Discover and Operate capabilities, to extract insights from the associated business process data being captured during the company’s Automate process.

While other cloud players are racing to build out their portfolios of automation capabilities, including RPA and low-code/no-code development assets, to support the growing customer appetite for workload customization, their capabilities lack the depth of UiPath’s and, in the near term, their value will be highest when used in conjunction with vendors’ first-party applications. This value-add does not align well with the reality of today’s enterprise SaaS environments.

Specifically, TBR’s 1H22 Cloud Applications Customer Research found that enterprise preference for best-of-breed SaaS deployment strategies is rising, with 40% of respondents stating they use three or more SaaS vendors today, and 60% of respondents stating the number of SaaS vendors they utilize will increase over the next two years. UiPath has an opportunity to exploit its position in the market and become the enterprise automation platform for tomorrow’s multi-enterprise business networks. In short, UiPath has the ability to provide customers with an automation platform capable of enhancing not only the processes corresponding to a single SaaS-workload like CRM but also the processes underpinning an end-to-end business outcome across workloads leveraging IP from multiple ISVs in areas like CRM, sales forecasting and marketing automation.

Over time, this approach will allow UiPath to achieve its goal of selling outcomes to clients, building libraries of process automations with cross-industry applicability and thus making its IP stickier across the enterprise landscape. In support of this aspiration, UiPath announced an expanded relationship with one of its largest partners, Microsoft (Nasdaq: MSFT). The two announced they will collaborate on a vision for the future of automation in the cloud; with Microsoft naming UiPath as a preferred enterprise automation partner and UiPath endorsing Microsoft Azure as its preferred cloud platform.

The pair, which have already developed 80 integrations available out of the box to joint customers, will further integrate UiPath across Microsoft Power Platform, Dynamics 365 in Business Applications, in addition to Microsoft’s Cognitive Services. While Microsoft has aggressively expanded the scope of Power Platform in areas like RPA and development, an IT services and consulting executive recently commented to TBR that Microsoft’s platform capabilities are not yet robust enough to support enterprises’ end-to-end automation projects. By further weaving UiPath across Microsoft’s vast portfolio, joint customers will be able to augment Power Platform with UiPath’s market-proven Automate assets, thus providing UiPath with a vast install base across Office 365, Dynamics 365 and Azure to drive traction of assets across Discover and Operate.

But to be a true enterprise automation company, UiPath will need to expand its current relationships with cloud platforms Amazon Web Services (AWS) (Nasdaq: AMZN) and Google (Nasdaq: GOOGL) to the same level and magnitude as that with Microsoft to position itself as a multicloud automation partner. Specifically, just as enterprises’ application environments increasingly consist of multiple SaaS vendors, so too do their IT infrastructures. Client preference for multicloud, hybrid cloud and hybrid IT deployments has steadily risen over the past few years as a means to reduce vendor lock-in, with TBR’s 1H22 Cloud Infrastructure & Platforms Customer Research finding that 46% of respondents plan to increase the number of infrastructure vendors utilized over the next two years.

This dynamic again presents UiPath with an opportunity to exploit client preference for multicloud environments, as the growing automation tool kits from AWS, Google and Microsoft will not be well served to automate the business processes and workloads spread across peers’ cloud infrastructure and legacy on-premises environments in the near term. In summary, UiPath’s ability to leverage the technology ecosystem — from cloud platforms, SaaS incumbents and the massive ISV community — will be critical to achieving the objectives laid out at FORWARD 5 around scaling, selling outcomes, and establishing itself as not just an RPA incumbent but also the enterprise automation platform market bellwether.



Partners provide access and use cases necessary for UiPath to scale adoption compelling the company to fine tune go-to-market efforts

To complement its technology ecosystem-led approach, UiPath will increasingly leverage services entities to gain access to enterprise LOBs. More critically, services entities today have the trust of C-Suite buyers, which will be needed to scale automation projects beyond single LOBs to achieve enterprisewide automation objectives. During the event, UiPath made several announcement highlighting the company’s efforts to strengthen relationships with services partners, recognizing the opportunity they offer when it comes to scale.

For example, EY unveiled that UiPath is now a Tier 1 alliance partner, a designation EY has only given to four other vendors and is often a confirmation of aligned vision, go-to-market efforts and client support. Accenture (NYSE: ACN) announced it will deploy UiPath automation to all of its employees (Accenture’s headcount stood at 721,379 as of 3Q22). Other partners like PwC held multiple sessions on stage, providing insights and sharing best practices from its collaboration with UiPath and the overall value of automation especially as it pertains to enabling its staff and creating capacity for higher-value tasks.

Given UiPath’s plans to pivot to selling outcomes, leveraging services’ partners vast benches of consultants will be crucial to clearly articulating its business cases across the industry continuum to secure the necessary enterprise budget to scale automation projects. Amid the growing macroeconomic uncertainty, UiPath’s promise of cost savings via automation — a mantra it touted endlessly at FORWARD 5 — may be well received by enterprises globally, but securing IT budgets is becoming more difficult as spending is increasingly scrutinized and will require the involvement of services partners that have the permission and trust of the budget decision makers.

Implications and opportunities

UiPath’s success lies in the company’s ability to evolve its value proposition as it executes on its three core pillars: technology, ecosystems and culture. With UiPath’s platform remaining open and easy to access, developing and integrating the focus of the co-CEOs has increasingly been focused on ecosystems and culture. We see the background of each CEO playing a key role in shaping leadership dynamics. We believe former SAP (NYSE: SAP) and Google executive Robert Enslin will remain largely focused on developing and executing UiPath’s sales and go-to-market strategy, which primarily revolves around its relationship with key alliance partners. Enslin understands the value of the ecosystem, especially as UiPath is trying to develop the next chapter of its client management strategy.

With UiPath’s roster of over 10,500 clients, Enslin knows that the company needs to develop a tier-based structure with large services partners and consultancies getting involved in relationship mining with the bigger accounts and also develop more self-service support mechanisms for smaller logos. Increasing expectations from partners will have to come with the necessary enablement framework. Providing access to clients and retuning incentive models will be key as UiPath strives to scale annual sales fivefold by capturing enterprisewide automation opportunities within the IT service management space.

In parallel, UiPath’s co-founder and CEO Daniel Dines’ humble beginnings provide the necessary foundation to ensure the company’s culture stays intact as it enters the next chapter of its growth strategy. Dines’ previous stint at Microsoft also helps him understand the value the partner brings to the relationship, evidenced by the two companies endorsing each other as preferred partners. Adopting an evolved sales and partner strategy while preserving culture will not be an easy task, but we believe UiPath’s leadership’s grounded vision and execution will help bring the company to the next level. Additionally, the incoming global downturn might even accelerate the transition for UiPath from a pure play RPA vendor to a subprocess platform enabler. With AI and automation providing enterprises with insights into how and where they can create efficiencies, we believe UiPath’s UI+AI+API framework around continual discovery mining will help elevate the value of its offerings.

SAP and SoftwareONE: Persistent value through pragmatic transformation

After TBR published a special report on SoftwareONE’s place in the software, cloud and IT services ecosystem, we spoke with Pierre-Francis Grillet, SoftwareONE’s global director of SAP Business Development, to learn more about how his firm’s SAP practice competes in an exceptionally crowded market.


Three key points stood out to TBR:

  • SoftwareONE’s focus on its core strengths including expertise in SAP, cloud and licensing, which are all crucial in the move to cloud and Everything as a Service, fits well with current trends in the IT services, cloud and software landscape.
  • Emphasizing pragmatic, incremental transformation over broad digital transformations helps SoftwareONE more easily define its value to clients.
  • Grillet and his team understand which cloud platform works best in a client’s environment, and they’re willing to make recommendations, differentiating SoftwareONE from vendors seeking to be multicloud agnostic.


Given SAP’s massive on-premises ERP install-base — which totaled 25,000 customers as recently as 1Q22 — the market opportunity surrounding migrations from offerings like SAP ERP Central Component (ECC) to SAP Business Suite 4 HANA (S/4HANA) is vast. As such, my colleague Evan Woollacott notes that S/4HANA is critical to SAP’s ability to achieve its midterm ambition of more than €22 billion in non-IFRS cloud revenue out of more than €36 billion in non-IFRS total revenue by 2025.


This goal would bring SAP’s mix of cloud revenue as a percentage of total revenue to over 60% in 2025, compared to a mix of approximately 41% based off SAP’s 2Q22 earnings. Given SAP’s 2Q22 S/4HANA Cloud revenue was just $503 million across 14,500 live clients, the company has a long way to go to achieve its goal. From a services partner perspective, such as SoftwareONE, SAP’s need to accelerate migrations to S/4HANA represents a substantial revenue opportunity, particularly given the inherent complexity associated with these transformations.


While it’s true that SoftwareONE will constantly be competing against larger players with scale and smaller players with lower prices, if it persists with a smart, well-refined and well-executed strategy that stays true to the company’s core strengths, it should continue to grow ahead of peers.


Register for our upcoming webinar: Pure plays are disrupting the original cloud disruptors


GSI fatigue opens opportunity lanes for SoftwareONE

According to Grillet, clients have grown tired of global systems integrators (GSIs) with massive teams based in low-cost countries doing things cheaply because they can. Instead, clients looking for SAP implementations welcome the chance to work with smaller vendors bringing expertise-led approaches and IP-rich capabilities.


While the giant GSIs adequately serve the largest enterprise-scale clients, SoftwareONE has found a sweet spot with the high end of the SMB market and low end of enterprise-scale customers, particularly those overlooked by the global GSIs. With a go-to-market focus and capabilities tool kit aligned around lifting and shifting SAP applications to the cloud and technical upgrades to S/4HANA, SoftwareONE stays industry agnostic while leveraging well-honed software asset management skills and an acquisition strategy that brings in boutique and highly specialized firms.


In short, if customers don’t want the hassle of working with a giant IT services vendor but do want SAP experts with experience, SoftwareONE looks like a pretty good choice.

Don’t overthink baby steps

From high-level strategy consultancies to thin-margin VARs, vendors constantly hype their abilities to help enterprises unlock the value of digital transformation. Grillet and SoftwareONE have a refreshingly modest and believable counterproposal: pragmatic, incremental IT and business transformation, with the sober recognition that a change as significant as migrating to S/4HANA and to the cloud needs to be executed in a series of manageable — and financially feasible — steps.


In Grillet’s opinion, “S/4 touches everything,” so overcoming hurdles like resilience, security, and interoperability and connectedness should be approached with caution, expertise and realistic expectations. Pragmatic, incremental transformation may not sound as exciting as design thinking-led agile disruptive innovation, but software that doesn’t work is useless, no matter how transformative it could be.


“Whenever we are selecting the service provider partner, it has to be the long-term journey, not just to go by project-based or portfolio-based services. But if you want to do innovation gently and new value with more outcome results, we really want to see and we have to make [the service provider] a longtime partner.”

— Executive Director, Banking


I think it’s really based on whether they [vendors] take on responsibility. When I’m looking for something, I look for people I trust to work with, and I don’t like it to be sold.It doesn’t matter whether they’re technology vendors or whether they are consultant vendors. So usually, the technology vendors have a better grasp of what our real problem is when we were looking for a solution. I think consultants in the real sense of consultants are usually hired when the board wants to make sure there’s something that they sort of have a grip on it or more control.

Chief Digital Officer, Insurance

Multicloud agnosticism means not knowing what works best

When advising clients on which cloud environment to choose for migrating applications or even a full-on instance of S/4HANA, Grillet said SoftwareONE does not shy away from making specific recommendations, eschewing the industry habit of staying multicloud agnostic. Grillet believes his team has the expertise and experience to evaluate a client’s technology needs and long-term strategy, then recommend the cloud environment that fits best, without regard to SoftwareONE’s alliance relationships with or revenue targets aligned to the three hyperscalers.


SoftwareONE cannot claim uniqueness in its aversion to multicloud agnosticism, but the company is definitely among the trendsetters in the broader consulting, IT services, software and cloud space moving toward a greater willingness to partner deeply to better serve specific clients rather than broadly try to please all clients.

Small and smart

SoftwareONE’s SAP practice includes 440 professionals working in 34 countries, performing cloud migrations, S/4HANA conversions and S/4HANA implementations. While not at the scale of the SAP giants, such as Accenture, Atos and EY, that TBR covers quarterly, TBR sees SoftwareONE as smartly leveraging its strengths, including 14-plus years of delivering pragmatic, incremental migrations that help clients with successful transformations.


Further, SoftwareONE stays within its lane, expanding its footprint at existing clients and slowly expanding its scope of services without pretending to be industry or functional specialists, a strategy TBR believes will generate steady revenue growth, loyal clients and consistent permission to compete.


As noted in TBR’s latest Cloud Ecosystem Market Landscape, vendors across the entire digital transformation spectrum “often like to position themselves as end-to-end providers. Many do indeed offer a comprehensive stack of offerings, but the ‘ends’ largely vary and revolve around each vendor’s core value proposition. While enabling and/or developing components of the IT stack provides a strong use case, vendors’ true value lies in their ability to manage partner ecosystems.” Staying in one’s swim lane and partnering smartly lie at the core of SoftwareONE’s strategy, boding well for sustained growth.


“I would probably be sacrificing some technical expertise on the problem solving in order to get internal alignment or buy-in from others who have relationships with that firm. At the same time, those firms [consultancies] are outrageously expensive. So, you have to balance fewer but more important pieces of work versus, you know, the ability to afford help on more projects.”

— SVP, Retail

Pure plays are disrupting the original cloud disruptors


Friction exists between large, established providers and pure plays looking to expand their businesses in nearly every niche of the cloud space. While much of TBR’s coverage focuses on those established players, including Amazon Web Services, Microsoft, Salesforce and Google, many pure plays are having an impact in their respective markets.


Join Practice Manager & Principal Analyst Allan Krans, Senior Analyst Evan Woollacott, Senior Analyst Catie Merrill, Research Analyst Alex Demeule and Research Analyst Megan Dille Thursday, Nov. 10, at 1 p.m. EST/10 a.m. PST for a deep dive into how pure play vendors such as Snowflake, Informatics, Hubspot and UKG are vying for their portion of cloud market opportunity.


In this FREE webinar you’ll learn:

  • Who are the most notable pure play disruptors and why?
  • The advantages these pure plays are using in competition against larger vendors
  • Which markets and customer segments are more apt to utilize pure play solutions





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].

Cloud partnerships prove even more important than expected in 2022

Coming into 2022, we expected partnerships to be important in cloud, but that was an understatement. From both vendor and partner sides, interest in strengthening cloud partnerships has been palpable.


The current macroeconomic uncertainty makes cloud partnerships an even more important factor in cloud growth heading into 2023. Cloud remains a focal point for most customer IT investments, but cloud partnerships can address the growing desire for solutions that are customized to customer requirements and can demonstrate cost-effectiveness.


Prediction No. 1: Partners enable growth and stickiness

Principal Analyst and Practice Manager Allan Krans: The cloud market has largely developed in a time of economic expansion. The growth that began in earnest in the aftermath of the 2008 recession has given the leading vendors and cloud market overall a very fertile economic environment. While the U.S. economy is still not technically in a recession, the environment does have a distinct negative tone.


Hiring has slowed for many of the largest technology vendors. Inflation levels not seen for decades are impacting the bottom lines of businesses across the board, including in the cloud space. These macroeconomic factors will have an impact, for both cloud vendors and their customer bases. IT spending growth could slow, and layoffs could mean smaller SaaS subscriptions upon renewal. And rising infrastructure and utility costs will force cloud providers to decide between increasing prices or seeing profitability levels decline.


It is in the face of all this looming economic uncertainty that the benefits of a partner ecosystem are shining. As vendors are reluctant to expand direct sales teams, partners can help throughout the sales cycle to cost-effectively contribute to revenue growth. Stickiness is even more critical in an uncertain environment, as high renewal rates are critical for both securing revenue and the profitability of the overall business. Many customers will be forced to look more carefully at cost in a tight economic environment, and having a partner to amplify the value of a cloud vendor’s solution can be a determining factor in renewal decisions.

Prediction No. 2: Value-add partners in software development and managed services become the focus in 2022

Allan: So far in 2022, TBR’s expectation that software development and managed service provider partners would be a focus has not only been confirmed, but the trend has been more pronounced than anticipated. Our prediction was primarily driven by the partner programs, which cover the thousands of smaller partners participating in the major cloud ecosystems.


On the software development side, marketplaces are the best litmus test for the activity of those smaller partners, and activity has been brisk during the year. Marketplace transactions are being mentioned as a growth driver by a number of ISVs, including Zscaler, CrowdStrike and Informatica. This also means revenue streams are growing for the marketplace providers, including Salesforce, Amazon Web Services (AWS), Microsoft and Google Cloud. Competition for ISV titles is getting even more heated, with Google Cloud reportedly cutting its revenue-sharing fee significantly during the year in order to sweeten the financial incentives for its software development partners.


Beyond the developments focused on smaller partners, some of the major names in IT have also illustrated the growing focus on software development during the year. Oracle’s cloud strategy had originally focused on an entirely “Red Stack” of the company’s own technology, but Oracle recently announced partnerships to make database offerings available on both Azure and AWS cloud platforms. Oracle will make its MySQL Heatwave cloud database available through the AWS platform.


Oracle will also make its fully managed database offerings running on Oracle Cloud Infrastructure (OCI) directly available from the Azure platform. This offering in particular preserves the performance and cost advantages Oracle claims for database and OCI offerings but broadens the availability through the partnership with Microsoft.



Prediction No. 3: Partner activities will be more important than traditional designations

Allan: The stress on traditional partner program designations continued in 2022. During the year we saw systems integrators packaging and selling their IP as a cloud subscription, a vastly different business for firms like PwC. Traditional reseller vendors like CDW are offering AWS managed services to clients. And even the cloud providers themselves are building out professional service capabilities as both a growth avenue and a value-add for clients.


Amid this business model fluidity, we saw greater flexibility being offered from cloud providers like AWS and Microsoft. AWS introduced a new Paths partner framework, featuring five dedicated tracks for partners — Software, Hardware, Training, Services and Distribution — each with its own set of resources and benefits.


AWS also began offering Partner Marketing Central, a self‐service portal available to partners, regardless of their dedicated path, for launching and managing marketing campaigns and educating workforces. Microsoft, for its part, renamed its partner program and refocused the designations not around the business model of the partners, but on the solution areas they achieve competency within.





Predictions is an annual TBR series examining market trends and business changes in key markets. 2022 covered segments included cloud, telecom, devices, data center, and services & digital.

Verizon Business showcases use cases highlighting ROI potential of 5G

TBR perspective

The enterprise market represents significant revenue growth opportunity for Verizon as the company expects the combination of multi-access edge compute (MEC), private cellular networks (PCNs), IoT and B2B technologies will grow to an addressable market exceeding $30 billion by 2025. Verizon also anticipates the aforementioned technologies will generate over $2 billion in revenue growth for the company from 2022 to 2025.

The Verizon 5G Innovation Session held in Boston showcased the opportunity advanced 5G use cases provide in attracting businesses seeking to improve operational efficiency, streamline headcount, optimize on-premises safety and security, and enhance customer experience. Verizon Business, as well as other telecom operators, will face challenges that will hamper 5G monetization, however, such as business models that require revenue to be split with other members of the value chain including hyperscalers, ISVs and network solution providers. Telecom operators will also face headwinds in the MEC and PCN markets from certain clients circumventing operators to work directly with hyperscalers and OEMs, limited recurring revenue opportunities, and customers’ limited awareness and budget allocation toward enterprise 5G solutions, especially among SMBs.

A prominent theme of the event was the value of partnerships, such as with Nokia, in bringing use cases to life while also coinnovating with customers to expand possible use cases into a variety of customer business units. Verizon is holding similar events with partner Ericsson (Nasdaq: ERIC), and Verizon also has a relationship with Celona for its private 5G solution. The event showcased several use cases that can be enabled by Nokia hardware and software combined with Verizon’s 5G connectivity and delivered by Verizon’s systems integration practice. Verizon’s mature partner ecosystem can foster additional symbiotic relationships with other network solution providers and ISVs in the 5G era, which is unique in cellular technology history. As Nokia Head of Cross Portfolio Solutions and Partners Jason Elliott noted, “5G is purpose-built for enterprise, whereas 3G and 4G were not.”

Impact and opportunities

A focus on improving business outcomes will position Verizon Business to attract 5G clients

Use cases demonstrated by Verizon Business at the event highlighted how 5G solutions can help businesses address operational challenges while providing opportunity to significantly reduce expenses, especially regarding headcount. Robotics and manufacturing solutions are a prime example of this strategy as Verizon demonstrated multiple use cases in which robotics solved businesses challenges, including placing an engine inside a vehicle at an automobile manufacturing plant as well as pairing robotics with video analytics to inspect and monitor parked vehicles, including for potential suspicious activity.

Frictionless shopping was a prominent use case as Verizon showcased an autonomous store leveraging 5G MEC and AI-powered computer vision applications to enable customers to purchase items without the need for an on-site human cashier. TBR believes this use case will be particularly appealing to national retailers such as convenience stores seeking to open smaller locations that require minimal headcount. Large venues such as stadiums and arenas are another targeted segment for Verizon as 5G solutions are helping to optimize processes such as crowd control and admission while improving the fan experience through benefits such as providing projected wait times for areas like concession stands as well as immersive smartphone applications offering capabilities such as showing multiple camera angles of an event.

TBR believes a focus on equipping sales personnel to help clients identify how 5G solutions can improve business outcomes will be paramount for Verizon Businesses in attracting contract wins. Providing systems integration (SI) services is also beneficial for Verizon Business as recurring revenue from MEC and PCN deployments will be limited by clients using their own or unlicensed spectrum, such as Citizens Broadband Radio Service spectrum. Notably, Verizon did not directly mention collaborations with traditional SI partners at the event, potentially indicating that Verizon aims to work with clients more directly in this area to maximize revenue opportunities. An increased focused on SI services will also strengthen Verizon Business’ existing bonds with its large client base, enabling Verizon to more successfully upsell customers to advanced 5G solutions in areas such as MEC and PCN while helping the operator differentiate and counter hyperscalers and network equipment providers seeking to attract customers in these areas, independent of telecom operators. Verizon Business would face challenges in growing its SI personnel, however, as Verizon will need to compete against leading SI firms to attract talent.

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Verizon and Nokia benefit from each other’s strengths

Nokia and Verizon work together across several domains, and Nokia places a high value on its partnership with Verizon, which owns relationships with enterprises to which Nokia can sell its MEC and PCN solutions, particularly the Nokia Digital Automation Cloud (NDAC). Verizon is also bringing to bear its SI capabilities in MEC and PCN engagements with enterprises, enabling Nokia to minimize investment in selling and service delivery while remaining true to its core competency of selling communications networking hardware and software.

Nokia’s NDAC solution is a part of a robust set of private cellular network deployment options Verizon has for its international private 5G platform for enterprises across the globe. The quickly deployable solution includes Nokia radios, switches, mobile core, and either a Hewlett Packard Enterprise (HPE) (NYSE: HPE) or Dell Technologies (NYSE: DELL) server. The switch, mobile core and server stack is highly compact and can support up to 100 Nokia radios. Nokia demonstrated a hologram use case at the Innovation Session leveraging only a Nokia small cell, switch and evolved packet core (EPC) in combination with an HPE server. Nokia and Verizon have a significant reference deployment of NDAC with Associated British Ports’ (APB) Port of Southampton, for which the companies have rolled out a 5G PCN and greatly consolidated the port’s wireless infrastructure. A Nokia representative told TBR the ABP deployment consisted of seven macro radios running over the aforementioned NDAC stack, condensed from 250 Wi-Fi access points.

Nokia’s long-term revenue growth depends in large part on diversifying its customer base to include more enterprises. 5G and enterprise go-to-market partnerships with operators such as Verizon are essential to Nokia achieving its goal.


The Verizon 5G Innovation Session showcased compelling use cases highlighting the potential of technologies including MEC, PCN, IoT, robotics and video analytics to improve business outcomes for enterprises. TBR believes large customers such as manufacturing companies, arenas and stadiums, and national retailers will account for the bulk of Verizon’s MEC and PCN initial target customers as they have a more tangible business case and path to ROI for deploying these technologies and also have higher budgets to support costly accompanying solutions such as robotics.

TBR expects Verizon Business will continue to focus on serving its smaller clients with mainly traditional network solutions, such as through its 5G Business Internet fixed wireless service and unified communications solutions including BlueJeans while targeting specific industries through existing portfolio offerings leveraging 5G such as transportation and fleet management companies via Verizon Connect and first responders through Verizon Frontline. The expanding availability of Verizon’s 5G Business Internet service also enables the company to serve new broadband customers outside of its FiOS footprint and target clients seeking cost savings over rival broadband companies, including cable and fiber providers.

Verizon Business will face formidable competition in the MEC and PCN markets as AT&T (NYSE: T) and T-Mobile (Nasdaq: TMUS) are likewise evolving their portfolios and partner ecosystems to capture market share, though Verizon will benefit from being the first U.S. operator to form partnerships with all three leading hyperscalers (Amazon Web Services [Nasdaq: AMZN], Google Cloud [Nasdaq: GOOGL] and Microsoft Azure [Nasdaq: MSFT]) to enhance its position in these segments. Verizon Business will also be challenged by hyperscalers and network equipment vendors positioning to serve clients independently of telecom operators. Fostering relationships with partners such as Nokia and existing clients will be paramount for Verizon Business in countering these pressures, while equipping its sales and SI teams to ensure clients realize the full ROI potential of 5G MEC and PCN will be vital for Verizon Business to compete as a leading player in these segments long-term.

A select group of industry analysts, media representatives and customers gathered at the Verizon Innovation Center in Boston to learn about Verizon Business’ 5G customer strategies and developing use cases leveraging emerging technologies including MEC and 5G PCN. The event was co-hosted by Nokia (NYSE: NOK), which is providing underlying infrastructure to support many of Verizon’s (NYSE: VZ) 5G enterprise solutions, and included use case demonstrations, speaker segments and panel discussions featuring leadership from several Verizon Business customers. Verizon is hosting a half-dozen similar events across the country. Key representatives who participated in the event included:

• Aparna Khurjekar, SVP and chief revenue officer, Business Markets and SaaS, Verizon Business
• Jennifer Artley, SVP, 5G Acceleration, Verizon Business
• Andy Brady, VP, Enterprise Sales, Verizon Business
• Mark Tina, VP, Business Sales, Verizon Business
• Danny Johnson, director of Product Marketing, Verizon Business
• David De Lancellotti, VP, Global Sales, Nokia
• Jason Elliott, head of Cross Portfolio Solutions and Partners, Nokia
• Michael Israel, chief information officer, the Kraft Group
• Samia Mahjub, VP of Business Strategy for TD Garden and Boston Bruins













Native PaaS services delivered via hybrid architectures shape the cloud market in 2022

Vendors innovate in PaaS, a cornerstone of investment for more mature enterprise customers looking to control costs, build client-facing solutions and generally drive business outcomes, post-migration. Throughout 2022, cloud service providers (CSPs) have continued to recognize that PaaS services are only as effective as the architecture they run on, which for many customers, includes multiple different clouds, edge locations and data centers.


Despite the negative impacts that inflation and unfavorable currency translation are having on vendor financials, the pace of PaaS investment will progress through 2023 as vendors look to compete in a saturating market and address what customers so clearly demand: choice, flexibility and freedom from vendor lock-in.

Prediction No. 1: Hybrid remains the new norm

Senior Analyst Catie Merrill: It is no secret that hybrid cloud is emerging as the preferred IT delivery method for enterprises, with scalability, choice, and diversification of assets among the leading benefits. Over the past several months, we have had conversations with customers across industry verticals highlighting this trend, and according to TBR’s 1H22 Cloud Infrastructure & Platforms Customer Research, 24% of respondents plan to move toward an entirely hybrid cloud environment in the coming years.


Throughout 2022, global economies have been grappling with heavy inflation and a strong U.S. dollar, and ongoing uncertainty around the economy may stall some hybrid implementations through the remainder of the year. However, our findings also indicate that unlike in the early days of cloud, cost is becoming less of a determining factor when choosing to move workloads off premises. As a result, many enterprises will progress with migrations, despite high prices, to supplement their data center investments and get the right solution tailored to their specific business goals.


In today’s market, hybrid cloud has largely come to encompass multicloud, another factor that has impacted adoption through 2022 is the tight labor market, including the ongoing skills shortage in IT. While the labor market does appear to be softening slightly, customers will still have to weigh hybrid cloud adoption and migrations on a workload-by-workload basis to make sure they have the necessary skills and expertise to address their requirements once in the cloud, which for many customers will mean having resources trained across at least three cloud platforms.


This trend bodes well for some of the large systems integrators (SIs) that have a pool of certified resources to help customers migrate and spin up workloads across disparate architectures. As a result, we can expect demand for cloud professional services, particularly at the advisory and implementation layers, to increase.

Prediction No. 2: Bringing cloud to the customer — distributed cloud moves from experiment to niche delivery method

Catie: Vendors’ pace of innovation in so-called distributed cloud solutions — those that extend public cloud services to customers in data center, private cloud and/or edge locations — has ramped up faster than initially expected. In particular, our assessment of Oracle is holding true, as in the past two quarters the vendor has taken significant steps to adapt its infrastructure portfolio to different delivery methods, including competing clouds, evidenced by recent launches like Compute Cloud@Customer and Oracle database services on both Amazon Web Services (AWS) and Microsoft Azure.


Meanwhile, it is largely business as usual for more established hybrid vendors like IBM, Microsoft and Google Cloud, with these companies investing in additional feature sets and applicable architectures for their solutions in a race for the control plane layer with offerings like Red Hat OpenShift, Azure Arc and Google Anthos. As we noted in our first prediction — rising demand for hybrid cloud — we expect vendors will continue to make investments like these and release offerings that address a leading pain point, infrastructure lock-in.



Prediction No. 3: IaaS is about scale; PaaS is about differentiation

Catie: IaaS saturation persists, forcing vendors to build out capabilities at the PaaS layer to increase client share of wallet. Such capabilities include low-code and no-code development, integration, data management, cloud brokerage tools, marketplaces, and databases, among others. As leading hyperscalers uniquely draw on their infrastructure establishments to cross-sell PaaS solutions, competitive friction with pure play PaaS vendors may increase.


However, in conversations with enterprise buyers, we continue to find that customers generally favor some of the more feature-rich, vendor-neutral offerings on the market from players like Red Hat, Informatica and Snowflake; through the remainder of the year and into 2023 we will be closely tracking how the hyperscalers invest in their PaaS portfolios and how buyer perceptions of hyperscale PaaS and pure play PaaS shifts.





Predictions is an annual TBR series examining market trends and business changes in key markets. 2022 covered segments included cloud, telecom, devices, data center, and services & digital.