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Global Growth, Tight IT Labor Market Boost Nordics Demand for Outsourcing, Hybrid Cloud

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Demand for IT outsourcing in the Nordics is growing as enterprises there expand globally and the region matures as a global technology center, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2021 ISG Provider LensNext-Gen Private/Hybrid Cloud – Data Center Services & Solutions report for the Nordics finds the number of IT outsourcing deals in the region is expected to increase over the next two to three years, with enterprises seeking partners for scalability, cost reduction and hybrid cloud adoption. Outsourcing is growing fastest in Sweden, followed by Denmark, Finland, Norway and Iceland.

“The Nordic countries have emerged as global centers of technology,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “The region’s cloud-native mindset and high demand for advanced skills make it a growing market for a wide range of IT outsourcing and cloud services.”

As enterprises expand operations and increase their use of artificial intelligence (AI), machine learning (ML), big data and automation, highly skilled IT workers in the Nordics are in short supply and command high salaries, the report says. Partly as a result of this, most large and midmarket enterprises are looking to outsource IT functions to managed services providers.

The COVID-19 pandemic provided the push for Nordic companies in many industries to implement hybrid cloud and multi-cloud strategies to remain competitive, ISG says. These plans are aimed at future-proofing operations for higher productivity, data-center security, a better customer experience and lower costs. In some cases, companies have seen their hybrid IT plans stall due to a lack of in-house expertise and subsequently have looked to service providers for assistance.

Outdated data centers with complex management requirements are holding some of the region’s enterprises back from achieving digital maturity, the report finds. Automation using AI and ML can eliminate routine IT tasks that take time away from IT departments’ core competencies, increasing efficiency and improving business agility.

The Nordic region continues to attract global investments in colocation centers thanks to lower energy costs relative to other parts of Europe, ISG says. The skilled workforce, high rate of cloud adoption and a cloud-native mindset at many enterprises also make the area attractive for colocation centers. Other strengths include low average temperatures and less climatic risk, satisfactory connectivity, stable political environments and high availability of renewable energy sources, especially hydro and wind energy in northern Sweden.

The 2021 ISG Provider LensNext-Gen Private/Hybrid Cloud – Data Center Services & Solutions report for the Nordics evaluates the capabilities of 56 providers across five quadrants: Managed Services for Large Accounts, Managed Services for Midmarket, Managed Hosting for Large Accounts, Managed Hosting for Midmarket and Colocation Services.

The report names BaseFarm (OBS) as a Leader in all five quadrants. It names TietoEVRY as a Leader in four quadrants and ATEA as a Leader in three quadrants. CGI, Fujitsu, IBM and T-Systems are named as Leaders in two quadrants each. The report names Accenture, Bulk Infrastructure, Capgemini, DigiPlex, Equinix, Ficolo, Green Mountain, HCL, Interxion (Digital Realty), LTI, TCS, Tech Mahindra and Wipro as Leaders in one quadrant each.

In addition, T-Systems and Visolit are named as Rising Stars—companies with a “promising portfolio” and “high future potential” by ISG’s definition—in two quadrants each. EcoDataCenter, LTI and Sopra Steria are named as Rising Stars in one quadrant each.

Customized versions of the report are available from CGI, Fujitsu, TietoEVRY and T-Systems.

The 2021 ISG Provider LensNext-Gen Private/Hybrid Cloud – Data Center Services & Solutions report for the Nordicsis available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Germany, Switzerland, the U.K., France, the Nordics, Brazil and Australia/New Zealand, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

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Contact information

Will Thoretz, ISG
+1 203 517 3119
will.thoretz@isg-one.com

Erik Arvidson, Matter Communications for ISG
+1 617 874 5214
isg@matternow.com

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