Skip to main content

U.S. Firms Embrace AI, Cloud for Application Development

Companies adopt AI for efficiency and quality, study GenAI’s potential for automation and testing, ISG Provider Lens™ report says

Growing AI and cloud adoption have shaped U.S. enterprises’ application development and management (ADM) strategies over the past year, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens™ Next-Gen ADM Services report for the U.S. finds that companies continue to focus on cost optimization, which has helped to drive up the use of AI throughout application lifecycles and inspire early implementations of generative AI (GenAI).

“AI-driven ADM services are transforming the operations of U.S. enterprise IT departments,” said Shafqat Azim, ISG partner and Americas lead, Digital Transformation. “Service providers have enabled clients to modernize ADM through AI, with major operational benefits.”

AI tools are automating ADM tasks, improving software quality and reducing downtime, the report says. Benefits can include higher efficiency, increased developer productivity and reduced time to market, along with proactive maintenance.

Quality assurance is a high priority for many U.S. enterprises, and GenAI has strong potential in this area. By automating test creation and scenario simulation, it can speed up testing and uncover issues that manual inspections might miss. While U.S. companies are exploring this potential, they also want to apply quality assurance to GenAI to ensure it will operate correctly and ethically, ISG says.

A growing number of U.S. enterprises seek provider engagements that cover both applications and underlying IT infrastructure, such as servers, networks and cloud services, the report says. These deals ensure applications are optimized for performance, scalability and security, while also reducing costs and streamlining vendor management.

Companies are also increasingly shifting development to major public cloud platforms to create more scalable, resilient and flexible applications, ISG says. Orchestration tools like Kubernetes, along with microservices architectures, containerization and DevOps practices, have helped make this migration possible.

“As market trends and customer needs change, cloud-native development lets enterprises quickly respond,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Greater agility is a key reason companies move application development to the cloud.”

The growing integration of site reliability engineering (SRE) with AI for IT operations (AIOps) practices has led to a significant shift in ADM operations, the report says. This approach uses machine learning and advanced analytics to sift through huge volumes of operational data, giving companies comprehensive insights into system performance. With it, SRE teams can pre-emptively discover and resolve potential issues and ensure uninterrupted service delivery.

The report also explores other ADM trends in the U.S., including providers’ increasing ability to address industry-specific requirements and the rise of Agile and DevOps practices in continuous testing services.

For more insights into enterprise ADM challenges in the U.S., including the complexity of applying AI to specific use cases and the difficulty of determining GenAI’s potential ROI, plus ISG’s advice for addressing them, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ Next-Gen ADM Services report for the U.S. evaluates the capabilities of 51 providers across six quadrants: Agile Application Development Outsourcing, Agile Application Development Projects, Application Managed Services, Application Quality Assurance, Continuous Testing Specialists and AI-enabled Application Development and Maintenance (AI-ADM).

The report names Accenture, Capgemini, Cognizant, Deloitte, HCLTech, IBM, Infosys and TCS as Leaders in four quadrants each. It names LTIMindtree, Tech Mahindra and Wipro as Leaders in three quadrants each. Apexon, Hexaware and UST are named as Leaders in two quadrants each. Birlasoft, Cigniti, Coforge, DXC Technology, Eviden (Atos Group), HTC Global Services, Infinite Computer Systems, Persistent Systems and Qualitest are named as Leaders in one quadrant each.

In addition, Quinnox is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in three quadrants. Hitachi Digital Services is named as a Rising Star in two quadrants. Mphasis and TestingXperts are named as Rising Stars in one quadrant each.

In the area of customer experience, Persistent Systems is named the global ISG CX Star Performer for 2024 among next-gen ADM service providers. Persistent Systems earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

Customized versions of the report are available from Apexon, Capgemini, Persistent Systems, Qualitest and QA Consultants.

The 2024 ISG Provider Lens™ Next-Gen ADM Services report for the U.S. is 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., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 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 AI, 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 1,600 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.

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.