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Section Name 1 1 1 1 Executive Summary EXECUTIVE SUMMARY In the recent ISG Index™ call (3Q20), we saw that the global 'as-a-service' market grew by 10.5% when compared to the same time last year, within which the IaaS market grew by 14% and SaaS by 2%. The major contributor to this increase was the growth of the hyperscalers, due to accelerated cloud adoption during the pandemic. ISG believes the IT spending will continue to grow and will be mainly driven by IaaS and cloud management providers. Although the traditional managed services business has remained flat across the globe in recent years, the as-a-service market has grown at 20% CAGR, and is more than 50% of the overall outsourcing market. With public cloud infrastructure getting commoditized, enterprises have been adopting cloud technology in their digital journeys, which corroborates the steady growth of IaaS since the last five years. In the last four quarters, public cloud adoption among the enterprise community in the U.S. has grown drastically. Enterprise demand has now shifted toward more of an as-a-service model, where the preference is for applications based on software as a service, pushing traditional providers and software vendors such as ERP companies to move their packaged applications to run in the cloud. One of the major reason enterprises accelerated their cloud adoption is the COVID-19 pandemic. The COVID-19 crisis has had a major impact in how everyone works. Many organizations wanted to rapidly move their employees to a work- from-home model, which required significant changes in their application and infrastructure landscapes. Traditional retail, travel and aviation are just a few of the industries that were severely impacted. Many U.S. workers have been following social distancing norms and working from home for an extended period that started in March and continued throughout September. This has led to a massive rise in online shopping for almost everything, which has changed the business requirements to support work from home, increasing the overall cloud services demand. In addition, most large events — including trade shows, sporting events and festivals — have gone virtual this year. Cloud infrastructure is an ideal ecosystem for this because it provides the agility and scalability required to provide a better customer experience. Virtual business meetings are the new norm, which has often led to deals getting closed much faster. Almost all service providers reported non-stop service delivery, and some have exceeded their planned revenues advance with record-breaking growth, especially IaaS and PaaS providers. © 2020 Information Services Group, Inc. All Rights Reserved. ISG Provider Lens™ Quadrant Report | November 2020 Source: 2020 SOURCING INDUSTRY CONFERENCE