The majority of infrastructure service providers typically serve clients in their home markets. Therefore, service providers have traditionally operated their own infrastructure environments to host server, storage and network capacities or even full application stacks. However, as part of their digital business initiatives and growth strategies, enterprise clients want to pursue digital touchpoint strategies, but these inherently require global expansion and reach. Hence, infrastructure service providers need to develop expansion strategies to support their clients in other countries in terms of global scalability. These service providers must be able to extend their infrastructure environments quickly, cost-effectively and with reasonable risks.
By 2023, 90% of infrastructure service providers must leverage the infrastructure capabilities of global public cloud providers to support the geographic expansion strategies of their clients.
However, geographic expansion is the highest risk of an expansion strategy; 40% of tech CEOs lack confidence in their company’s ability to solve this challenge in the next six to 12 months, according to a Gartner survey of tech CEOs. But a cloud strategy combined specifically with the infrastructure business model significantly reduces investment requirements. Extending through existing clients reduces time to revenue, and the geographic coverage of cloud and connectivity partners provides the flexibility and agility to pivot into other regions as the opportunities present themselves.
While many infrastructure service providers are successful champions in their home market, digital business transformation provides opportunity by removing boundaries. Enterprises need to be able to address a global customer base through digital touchpoint solutions as part of their expansion strategy (see It’s a Matter of Proximity: Go Beyond the Edge Directly to the Digital Touchpoint in Support of Digital Business). In doing so, enterprises must:
- Overcome latency issues using local data centers.
- Establish proximity leveraging edge locations and services.
- Deliver services where their clients run their businesses — without boundaries.
However, to support a client’s expansion strategies, it is expensive, risky and takes too much time for service providers to set up their own infrastructure environments in other countries and regions. But by leveraging public cloud infrastructure environments, service providers can quickly and flexibly expand their geographical footprint. This enables them to serve the interests and digital initiatives of their clients on a wide and global basis.
Gartner has identified an approach, which tech CEOs and technology product managers of infrastructure service providers can use to seize the opportunity and address the expansion strategies of their clients.
- Tech CEO: Leveraging the Cloud: Addressing the Geographic Expansion Challenges Inherent to Your Client’s Digital Ambitions
- Technology Product Managers: Leverage Public Cloud Infrastructure to Address Your Clients’ Global Digital Touchpoint Expansion Initiatives
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