Public Cloud Demand Surges in Asia Pacific Amid AI and Modernization Trends

Demand for public cloud services is accelerating across Asia Pacific as enterprises increasingly recognize the strategic importance of investing in advanced technologies like artificial intelligence (AI) to compete globally, according to a new report from Information Services Group (ISG). The 2024 ISG Provider Lens™ Multi Public Cloud Services report highlights how rapid economic growth, government incentives, and modernization of legacy infrastructure are driving cloud adoption in the region, which has become a hub of global innovation.

Cloud Adoption and Regional Growth

The report finds that Asia Pacific enterprises are rapidly advancing in cloud-native technologies, often surpassing international peers. Government support and a strong ecosystem of local and global system integrators have facilitated this transformation, enabling companies to implement cloud environments more efficiently. Michael Gale, a partner and regional leader at ISG Asia Pacific, observed that enterprises in the region are boosting both the cloud ecosystem and the broader economy as they mature technologically and expand AI applications.

Emerging Trends: GenAI and Hyperscalers

The expansion of hyperscale infrastructure has been a significant driver of growth in the public cloud sector. Established hyperscalers such as AWS have long operated in countries like Australia, Japan, and Singapore, with new deployments expected in Indonesia, Thailand, and New Zealand by 2025.

Generative AI (GenAI) adoption is emerging as a major catalyst for cloud service demand, with companies in China, India, and beyond increasingly relying on hyperscalers for the computational power and storage necessary to develop AI applications. Scalable, on-demand cloud infrastructure has become an attractive option for enterprises planning large-scale AI initiatives.

Modernization and Managed Services

As organizations across the region prioritize application modernization and cloud-native technologies, they are turning to managed services providers for support. These providers offer expertise in areas such as lift-and-shift migrations, container management, and DevOps strategies, which help enterprises streamline development pipelines through Continuous Integration/Continuous Deployment (CI/CD) methods. Financial operations (FinOps) services are also in demand as enterprises seek to optimize cloud costs, enhance performance, and ensure regulatory compliance. Many FinOps providers are leveraging AI to identify anomalies in cloud usage and spending.

Key Service Providers and Market Leaders

ISG’s evaluation of 37 providers across five market segments identified several leaders. Companies such as Accenture, Capgemini, HCLTech, and Infosys were recognized as leaders in three categories, while AWS, Deloitte, Google, IBM, Microsoft, and others achieved leadership in two categories. Rising Stars, defined as providers with strong growth potential, included Hitachi Digital Services, LTIMindtree, and Rackspace Technology.

Customer Satisfaction and Industry Recognition

Persistent Systems received the ISG CX Star Performer for 2024 designation for achieving the highest customer satisfaction scores in ISG’s “Voice of the Customer” survey. This recognition underscores the company’s commitment to delivering exceptional customer experiences in multi-cloud services.

Looking Ahead

The report emphasizes the transformative role of public cloud services in Asia Pacific, particularly as enterprises embrace AI and digital transformation. ISG predicts continued growth in demand for SAP cloud migration, localized hyperscale alternatives, and cost-optimization services. These trends highlight the region’s dynamic cloud landscape and the opportunities for enterprises to enhance competitiveness and innovation.

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