Here’s Who Made Gartner’s Magic Quadrant For Data Center And Hybrid Managed Services

Accenture, Cognizant, DXC Technology, Dell Technologies and TCS and are just some of the leaders in Gartner’s new 2019 Magic Quadrant for Data Center Outsourcing and Hybrid Infrastructure Managed Services in North America.

Gartner’s Magic Quadrant For Data Center And Hybrid Managed Services

CIOs are reconsidering data center build-out and expansion projects in favor of cloud computing and hybrid infrastructure which is leading to massive services opportunities, according to Gartner’s new 2019 Magic Quadrant for Data Center Outsourcing and Hybrid Infrastructure Managed Services in North America.

More businesses are migrating to private, public and hybrid cloud services to increase their competitiveness, accelerate agility and time to market, and lower their IT costs. Garter said by 2021, many CIOs will fail to capitalize on innovation that can reduce the cost of data center outsourcing services up to 50 percent. Additionally, by 2020, more than 50 percent of current manual operational tasks in infrastructure managed services will be replaced by intelligent automation services.

North American businesses are targeting a hybrid IT environment consisting of around 52 percent legacy, 26 percent public cloud, 18 percent private cloud and the remainder being made up of Internet of Things (IoT).

Total revenue from the 20 top data center outsourcing and hybrid infrastructure managed services providers (DCO/HIMS) in North America hit $22 billion, up 9 percent year over year. In this fast-growing market, over half of the companies witnessed double-digit growth year over year, while 25 percent saw single-digit growth.

Data Center Outsourcing And Hybrid Infrastructure Managed Services Methodology

Gartner evaluated the 20 leading companies who are delivering the best data center managed services in North America providing data center outsourcing (DCO), hybrid infrastructure managed services (HIMS), private cloud managed services, mainframe services, ERP hosting managed services, cloud migration services, remote infrastructure management, data center transformation services and edge data center services.

The research firm collected more than 500 data points per provider and received over 150 references from North American customers to create this Magic Quadrant.

Gartner's Magic Quadrant ranks vendors on their ability to execute and completeness of vision and places them in four categories: Niche Players (low on vision and execution), Visionaries (good vision but low execution), Challengers (good execution but low vision) and Leaders (excelling in both vision and execution). For this particular quadrant, there were no companies listed in the 'Visionaries' category.

Here are the 20 vendors that made Gartner's 2018 Data Center Outsourcing and Hybrid Infrastructure Managed Magic Quadrant in North America, along with assessments of each company's strengths and weaknesses in the space.

Leader: IBM

Global DCO/HIMS 2018 Revenue: $10.2 Billion

North America DCO/HIMS 2018 Revenue: $4.5 Billion

Average Annual Deal Size In North America: $2.2 Million

IBM is the winner in Gartner’s Magic Quadrant for execution and placed in second for vision. The Armonk, N.Y.-based technology and services giant is leading its customers to hybrid cloud, artificial intelligence and analytics with a focus on developing open-source platforms. In North America, IBM manages 57,500 physical servers, 173,000 VMs -- down 20 percent year over year – and 148,000 instances in public cloud which has doubled over the last year. For its ERP operations, IBM hosts Oracle systems supporting 445,000 users and 891,000 SAP users – both up 3 percent year over year.

Strength: IBM is accelerating customers cloud journey by providing a purpose-built approach to deploy workloads of any type. The company achieved this by restructuring its market approach, launching project-based services that leverage IBM’s Cloud Private, Multicloud Manager, security, automation and data protection.

Weakness: IBM -- which recently acquired Red Hat -- focuses on large deals, with an average deal length of five years for around $76 million, making it not attractive for smaller clients looking for a flexible relationship.

Leader: Accenture

Global DCO/HIMS 2018 Revenue: $3.6 Billion

North America DCO/HIMS 2018 Revenue: $1.7 Billion

Average Annual Deal Size In North America: $4.2 Million

Gartner’s winner for vision on the Magic Quadrant is Dublin-based Accenture. The company, who is on a major acquisition spree this year, takes an application-centric approach to address client’s cloud journey by isolating legacy environments and developing new functions on cloud-natives apps. Accenture placed among the middle of the pack for execution on the Magic Quadrant. The company manages 94,600 physical servers, 116,000 VMs – up 24 percent year over year – and supports 44,200 instances in public cloud in North America. Within ERP, Accenture hosts Oracle systems supporting 324,000 users and 260,000 SAP users.

Strength: Accenture differentiates its service offerings by focusing on the application layer to push infrastructure transformation by creating an API later to provide microservices from its legacy applications. The company also continuously invests in automation and analytics.

Weakness: The company scored below average in the quality of services delivered from low-cost geographies. Some clients reported Accenture’s cost structure can be challenging over a long-term contract.

Leader: TCS

Global DCO/HIMS 2018 Revenue: $2.9 Billion

North America DCO/HIMS 2018 Revenue: $1.4 Billion

Average Annual Deal Size In North America: $4.7 Million

Tata Consultancy Services (TCS) ranks second place in execution and four in vision on the Magic Quadrant. The Mumbai-based services powerhouse manages 154,000 physical servers, more than 1 million VMs and supports 43,600 OS instances in public cloud in North America, up 35 percent over last year. TCS supports 855,000 Oracle systems and 2.32 million SAP systems, an increase of nearly 50 percent year over year. The company’s TCS Cognitive Business Operations strategy focuses on business outcomes and is moving towards integrating application, consulting and transformation services.

Strength: Client rated TCS very high in value for money, its attention to customer needs and success at standardizing processes to meet SLA requirements. The company uses agile methodology for DevOps and has created a co-innovation network dubbed TCS Pace.

Weakness: Although TCS is business-outcome oriented, customers must actively collaborate with the company to make sure they have the correct combination of skills, customization, key partners and performances they need. TCS’ IoT business is still small and in its early stages.

Leader: HCL Technologies

Global DCO/HIMS 2018 Revenue: $2.5 Billion

North America DCO/HIMS 2018 Revenue: $1.3 Billion

Average Annual Deal Size In North America: $7.5 Million

The India-based company ranks third in vision and fourth in execution on the Magic Quadrant. In North America, HCL Technologies manages 54,600 physical servers, 636,000 VMs and supports 104,000 instances of public cloud, up 44 percent year over year. For ERP operations, HCL hosts Oracles systems supporting 558,000 users, up 15 percent year over year, and 720,000 users on SAP systems. The company is deploying a three-mode strategy where solutions are built across three areas: legacy maintain and automate, sustain and migrate, and cloud-native explore.

Strength: HCL is moving to more vertical offerings which account for about 30 percent of its DCO/HIMS business, while accelerating growth in cloud-native capabilities and containers. The company is focuses more on the user experience to drive business-level objectives.

Weakness: As HCL increases its focus on strategic clients whose areas fit its portfolio, clients who do not match HCL’s sales profile may find that HCL will not bid for the work.

Leader: DXC Technology

Global DCO/HIMS 2018 Revenue: $8.2 Billion

North America DCO/HIMS 2018 Revenue: $3.5 Billion

Average Annual Deal Size In North America: $4.4 Million

The Tysons, Va.-based solution provider powerhouse ranks amongst the leaders for both vision and execution on the Magic Quadrant. DXC Technology, who just hired a new CEO in Mike Salvino, provides a launch, adapt and run strategy that leverages its automation platform Bionix to reduce its time-to-market for customers. In North America, DXC Technology supports 61,700 physical servers, 116,000 VMs and grew almost five times in the number of public cloud instances to 22,000 in 2018 compared to 2017. DXC provides ERP hosting that supports 1.5 million SAP users and 70,300 Oracle users, down 11 percent annually.

Strength: DXC Technology has built its advisory services to assist clients in the move to hybrid and digital. The company is seeing significant growth in its private and public cloud managed services business, while reducing its managed data centers.

Weakness: DXC’s edge computing and IoT offerings are still in their early stages with limited customers benefitting from these technologies. A few clients said the company is still siloed in its solution approach.

Leader: Wipro

Global DCO/HIMS 2018 Revenue: $2.2 Billion

North America DCO/HIMS 2018 Revenue: $1.1 Billion

Average Annual Deal Size In North America: $3.9 Million

Wipro won third place in execution on the Magic Quadrant and ranks among the top group in vision. Wipro’s business-first strategy and investment in hybrid, blockchain, IoT and DCO are driving big revenue increases in North America. The Bengaluru, India-based solution provider manages 120,000 physical servers and 764,000 VMs in North America. Wipro supports 33,000 instances in public cloud, an increase of more than 100 percent year over year. Wipro ERP operations host Oracle systems supporting 3.41 million users and 1.05 million SAP system users, up 33 percent year over year.

Strength: The divestiture of its North American physical data centers to Ensono has allowed the company to detangle itself from its legacy DCO business. Wipro focuses on digital investments, accelerating its partner ecosystem and streamlining legacy offerings.

Weakness: A large percentage of Wipro’s revenue is being generated on non-recurring revenue streams associated with cloud migration and transformational efforts. The company may not be ideal for customers who are not ready for complete digital transformation.

Leader: Atos

Global DCO/HIMS 2018 Revenue: $4.7 Billion

North America DCO/HIMS 2018 Revenue: $1.3 Billion

Average Annual Deal Size In North America: $4.7 Million

Atos ranks No. 5 in vision and among the middle of the pack in execution on the Magic Quadrant. Atos sees the future as requiring DCO to be extended to the IoT device with ubiquitous connectivity and end-to-end services. The France-based service specialist supports 79,500 physical servers, 103,000 VMs and 3,600 instances in public cloud, up 11 percent year over year, in North America. Within ERP, Atos hosts 584,000 users on Oracle systems, up 4 percent year over year, and 267,000 SAP users, down 12 percent year over year.

Strength: Atos market position was boosts with its two recent acquisitions of SIX Payment Services and Syntel. The company has a strong focus on IoT, edge computing and automation capabilities and has completed several proof-of-concepts and rollouts.

Weakness: Atos North American DCO/HIMS revenue declined 6 percent in 2018 year over year. The company is behind other leaders on this Magic Quadrant in using consulting as either a key route to market or to benefit business.

Challenger: Infosys

Global DCO/HIMS 2018 Revenue: $1.5 Billion

North America DCO/HIMS 2018 Revenue: $851 Million

Average Annual Deal Size In North America: $4.9 Million

Winning fifth place in execution on the Magic Quadrant, Infosys is leveraging its significant applications and consulting capabilities to drive revenues in DCO/HIMS. The India-based company manages 80,200 physical servers, 168,000 VMs and its public cloud footprint covers 9,000 instances, up 50 percent year over year. Within ERP, Infosys – which ranks among the middle of the pack for vision on the Magic Quadrant -- hosts Oracle systems supporting 959,000 users and 474,000 users on SAP, up 14 percent year over year.

Strength: Infosys has many OEM partnerships to offer flexible consumption as-a-service models that allows it to place servers in client locations to provide compute in a private cloud model while application remediation is performed. The company can support the full IoT stack through an ecosystem of providers.

Weakness: The company has a low number of next-generation solutions under management, with a very small amount of containers, IoT gateways and edge data centers. Some clients cited source constraints and turnover as key weaknesses.

Challenger: NTT Data

Global DCO/HIMS 2018 Revenue: Not Provided

North America DCO/HIMS 2018 Revenue: $824 Million

Average Annual Deal Size In North America: $300,000

NTT Data ranks among the top group in execution and among the middle of the pack for vision on the Magic Quadrant. The Tokyo-based company leverages complementary capabilities of its NTT Group family of brands to allow outcome-based solutions focusing on key industry verticals of financials and insurance, healthcare and life sciences, manufacturing, and commercial and public sector. NTT Data manages 33,600 physical servers, 87,300 VMs and 4,930 instances of public cloud, a threefold increase. Within ERP, the company supports 363,000 SAP users and 159,000 Oracle users.

Strength: Reference clients praised the company for its operational excellence in delivering data center infrastructure services. NTT DATA leverages NTT Group to invest in automation and innovation in DCO and HIMS environments, including $2 billion in R&D in fiscal year 2018.

Weakness: NTT DATA didn’t score well among reference customers in thought leadership or continuous improvement. The company’s public cloud practice is small and the number of public cloud managed VMs is well below its competitors.

Challenger: Cognizant

Global DCO/HIMS 2018 Revenue: $1.3 Billion

North America DCO/HIMS 2018 Revenue: $1.1 Billion

Average Annual Deal Size In North America: $4.9 Million

Cognizant aims to unify and offer end-to-end services across infrastructure to applications based on its automation, security and compliance offerings. The Teaneck, N.J.-based solution provider, who recently appointed a new CEO, ranks among the top group in execution and among the middle of the pack for vision on the Magic Quadrant. Cognizant manages 79,000 physical servers, 409,000 VMs and 73,100 instances in public cloud, up nearly 300 percent year over year. In ERP, the company hosts Oracle systems supporting 565,000 users as well as 397,000 SAP users, up 60 percent year over year.

Strength: Cognizant’s DMO/HIMS revenue us up more than 20 percent year over year both in North America and globally. Customer site the company for its excellent customer service, depth of services, expertise and attention to detail, as well as its ability to be a strategic partner that focuses on technology innovation.

Weakness: The company is primarily focused on technical delivery and sometimes places a reliance on the customer to defined the overall business outcomes. Some clients cite a lack of thought leadership with offshore teams.

Challenger: Unisys

Global DCO/HIMS 2018 Revenue: $575 Million

North America DCO/HIMS 2018 Revenue: $401 Million

Average Annual Deal Size In North America: $4.4 Million

The Blue Bell, Pa. -based company provides a comprehensive set of hybrid offerings, underpinned with structured migration approaches and a strong security approach, to help clients with modernizing their legacy hosting solutions. Unisys, who is doubling down on security, ranks amongst the top group in execution and among the middle of the pack for vision on the Magic Quadrant. The company manages 9,900 physical servers, 30,600 VMs and 53,400 instances of public cloud, representing a tenfold increase year over year. Within ERP, Unisys supports 153,000 SAP users and 525,000 Oracle users.

Strength: Unisys is expanding its cloud consulting and advisory services to include application modernization with Kubernetes and containers, while partnering with major hyperscale cloud service providers. The company uses a set of cloud, infrastructure and application tools and services, dubbed CloudForte, to help clients various environments.

Weakness: The company has limited transformational consultancy service offerings and provided limited hosting of SAP and IBM mainframes. Unisys must make sure all its clients have adapted to the CloudForte platform.

Challenger: Capgemini

Global DCO/HIMS 2018 Revenue: $2.6 Billion

North America DCO/HIMS 2018 Revenue: $546 Million

Average Annual Deal Size In North America: $1.6 Million

Capgemini focuses on migrating clients to the Capgemini Cloud Platform (CCP) through a journey that includes migration, operations and innovation. The Paris-based solution provider – who recently acquired Altran for $4.1 billion -- ranks among the middle of the pack for both vision and execution on the Magic Quadrant. Capgemini manages 7,160 physical servers, 69,200 VMs and doubled its support for public cloud instances year over year to 13,200. Within North American ERP, the company supports 16,500 Oracle users and 505,000 SAP users.

Strength: The company takes a cloud-first approach to DCO/HIMS, with its CCP cloud integration and management platform that connects legacy, private cloud and public cloud environments. Capgemini is investing in hybrid cloud migration and management as well as in automation and application optimization.

Weakness: Capgemini only witnessed 1 percent growing in North America DCO/HIMS revenues, indicating low penetration of new services. The company’s vision is limited due to a technical view on how to utilize cloud.

Niche Player: Sungard AS

Global DCO/HIMS 2018 Revenue: $984 Million

North America DCO/HIMS 2018 Revenue: $768 Million

Average Annual Deal Size In North America: $200,000

Sungard AS combines colocation, hosting, private cloud and public cloud to provide unique resiliency-focused infrastructure solutions to customers. The Wayne, Pa.-based company ranks among the middle of the pack for both vision and execution on the Magic Quadrant. Sungard AS manages 2,880 physical servers, 9,910 VMs and 500 instances of public cloud, up 41 percent annually. Within ERP hosting, the company supports 6,950 SAP users and 1,200 Oracle users. In May, Sungard AS emerged from a prepacked Chapter 11 reorganization bankruptcy.

Strength: The company’s differentiation in the market is provisioning IT infrastructure focused on business resiliency. Sungard AS updated its commercial model to allow more flexibility to migrate from colocation to hosted private cloud and managed AWS.

Weakness: Both global and North American DCO/HIMS revenue was down 11 percent year over year for the company. Sungard AS’ has not had DCO/HIMS revenue growth over the last year years and lacks services such as intelligent automation and cloud-native services.

Niche Player: CenturyLink

Global DCO/HIMS 2018 Revenue: $1.1 Billion

North America DCO/HIMS 2018 Revenue: $792 Million

Average Annual Deal Size In North America: $200,000

CenturyLink grew global DCO/HIMS revenue 65 percent in 2018 year over year to $1.1 billion. The Monroe, LA.-based company ranks among the middle of the pack for both vision and execution on the Magic Quadrant. CenturyLink manages 5,390 physical servers, 13,500 VMs and 63,000 instances in public cloud. Within ERP, the company supports 350,000 SAP users, up 25 percent year over year, and 400,000 Oracle users in North America.

Strength: CenturyLink is leveraging its secure network and telco heritage to enable DCO/HIMS through CenturyLink Cloud Connect Dynamic Connections that allows it to link its private cloud offerings with the hyperscale public cloud providers and with the client’s premises in a secure pay-as-you-go manner.

Weakness: The company is rooted in cloud and has limited capabilities in traditional legacy workloads of mainframe and on-premise data centers. CenturyLink did not score well among reference customers with value of money.

Niche Player: Dell Technologies

Global DCO/HIMS 2018 Revenue: Not Provided

North America DCO/HIMS 2018 Revenue: $700 Million

Average Annual Deal Size In North America: $1 Million

The $91 billion infrastructure giant offers a consulting-led transformational service mainly centered on VMware Cloud as Dell Technologies seeks to further establish itself as a multi-cloud infrastructure player. The Round Rock, Texas-based company ranks among the middle of the pack for both vision and execution on the Magic Quadrant. Dell Technologies manages 50,400 VMs, down 13 percent year over year, and 53,400 public cloud VMs. Dell did not provide Gartner insight into the number of supported SAP and Oracle users.

Strength: Dell focuses on driving cloud transformation and takes a consulting-led approach to delver data center blueprinting and application assessment. It also offers SAP ERP built on Virtustream Enterprise Cloud and integrated planning, migration, backup, replication and disaster recovery for its cloud services.

Weakness: Customers with large legacy footprints that aren’t looking for replacement in the short term will not benefit from Dell’s managed services strength. Dell doesn’t have service offerings for IoT and data analytics aligned to the managed services space.

Niche Player: Ensono

Global DCO/HIMS 2018 Revenue: $574 Million

North America DCO/HIMS 2018 Revenue: $445 Million

Average Annual Deal Size In North America: $2.3 Million

Ensono is expanding its focus on cloud and has placed customer success as its centerpiece strategy. The Downers Grove, Ill.-based company ranks among the middle of the pack for both vision and execution on the Magic Quadrant. Ensono manages 7,270 physical servers, 8,520 VMs – up 15 percent year over year -- and 375 instances of public cloud. The company does not provider SAP or Oracle hosting services, but does support some Microsoft Office 365 users.

Strength: The company grew North American DCO/HIMS revenue by 113 percent year over year, and 98 percent globally. Ensono continues to invest in automation with its service management platform, Ensono Envision, where standards of service and cost-efficiency are improving.

Weakness: Ensono has a gap in terms of ERP delivery capabilities. Support for Microsoft Office 365 and other SaaS capabilities is limited with the company needing to make gains outside of legacy spend and develop a better distribution of revenue.

Niche Player: Zensar Technologies

Global DCO/HIMS 2018 Revenue: Not Provided

North America DCO/HIMS 2018 Revenue: $313 Million

Average Annual Deal Size In North America: $600,000

Zensar Technologies takes an application-centric approach to cloud migrations that is tailored to the individual client’s needs. The India-based company ranks in last place in vision on the Magic Quadrant and among the middle of the pack for execution. Zensar manages 142,000 physical servers, 65,800 VMs and 2,570 instances of public cloud. Within ERP, the company supports a limited number of SAP users and 21,500 Oracle users, up 15 percent year over year.

Strength: Zensar has a very high success rate in closing new business which means its message is resonating with nearly 20 percent DCO/HIMS revenue growth year over year in North America. The company has migrated a significant number of applications to public or private cloud.

Weakness: The company’s focus on small opportunities means that cost of sales will remain high. Zensar has an overall small deal size that it has been unable to grow into additional support services.

Niche Player: T-Systems

Global DCO/HIMS 2018 Revenue: $3 Billion

North America DCO/HIMS 2018 Revenue: $211 Million

Average Annual Deal Size In North America: Not Provided

T-Systems centers its offerings on secure transmission and analysis of the client’s data to provide insight and process redesign. The Germany-based company ranks near the bottom of the pack in execution and among the middle for vision on the Magic Quadrant. T-Systems manages 2,800 physical servers, 7,920 VMs and 2,370 public cloud instances, which is new for the North American region this year. Within ERP, the company supports 635,000 SAP users, down seven percent year over year, and does not support Oracle users.

Strength: With one of the largest managed SAP user bases in the world, T-Systems global DCO/HIMS revenue is up 31 percent year over year. The company will cater to individual customer needs and adjust its delivery model on a deal by deal basis.

Weakness: In North America, T-Systems has no mainframe support and its public cloud support is limited. The company doesn’t have a focus on providing business outcomes for customers which constrains its innovation for clients.

Niche Player: Tech Mahindra

Global DCO/HIMS 2018 Revenue: $629 Million

North America DCO/HIMS 2018 Revenue: $296 Million

Average Annual Deal Size In North America: $1.8 Million

Tech Mahindra is driving customer data center and application modernization with a hybrid cloud focus across five specific industries: communications, financial services, heathcare, manufacturing and retail. The India-based company ranks among the bottom of the pack for both vision and execution on the Magic Quadrant. Tech Mahindra manages 97,700 physical servers, 218,000 VMs – up 51 percent year over year – and 12,200 instances of public cloud. Within ERP, the company supports 142,000 SAP users and 120,000 Oracle users.

Strength: The company demonstrates its faith in its ability to executive with contractual obligations to cost reductions that place the risk of performance on Tech Mahindra. Reference clients noted that the company provided good value for money and takes a client-centric approach.

Weakness: Growth is limited around ERP and public cloud managed service, while the company has de-emphasized mainframe managed services. Customers rated Tech Mahindra low in transformation capabilities such as innovation, migration to cloud and private cloud capabilities.

Niche Player: Fujitsu

Global DCO/HIMS 2018 Revenue: $2.1 Billion

North America DCO/HIMS 2018 Revenue: $223 Million

Average Annual Deal Size In North America: $4 Million

Fujitsu strategy is centered on application transformation, multi-cloud and cloud-native applications and seeks to apply technology for human and societal impact. The Tokyo-based company ranks last place for execution on the Magic Quadrant and among the middle of the pack in vision. Fujitsu manages 1,250 physical servers, 2,060 VMs – down 57 percent year over year – and 34 instances in public cloud. Within ERP, the company hosts Oracle systems supporting 15,300 users, down 90 percent year over year, and 50,200 SAP users.

Strength: The company has invested in supporting cloud-native capabilities and has install bases of containers, IoT endpoints and IoT gateways under management. Fujitsu offers the VMware Cloud Foundation stack and VMware Cloud on AWS.

Weakness: Fujitsu’s DCO/HIMS revenue in North America was down 21 percent year over year with limited legacy capabilities. The company doesn’t have a mainframe presence and a limited presence of most of the hybrid infrastructure environment.