Enterprise investments in cloud, AI, security expected to increase demand for Microsoft-related solutions and services, ISG Provider Lens™ report says
SYDNEY, April 29, 2025--(BUSINESS WIRE)--An expected upswing in Australian enterprise IT spending in 2025 is likely to generate more demand for solutions and services from the Microsoft AI and cloud ecosystem, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.
The 2025 ISG Provider Lens™ Microsoft AI and Cloud Ecosystem report for Australia finds that technology spending in the country is poised for faster growth after several years of caution amid macroeconomic uncertainty. Enterprises are expected to invest mainly in cybersecurity, cloud-enabled digital transformation and infrastructure modernization, including replacement of Windows 10 hardware. At the same time, Australian enterprises are turning to Microsoft-aligned solutions to address cyber risks and aging infrastructure and realize greater return on digital investments.
"Enterprises in Australia aren’t just adopting cloud, they’re demanding strategic outcomes from it," said Ben Rossiter, lead, tech modernization, for ISG in Australia. "They are constantly looking for ways to improve cloud visibility, predictability and cost control."
These efforts are driving demand for solutions and services that can enhance cloud utilization, cost optimization, governance, security and other capabilities, the report says. Ultimately, companies want the cloud to deliver more measurable business outcomes, especially with ongoing concerns about economic trends and the threat of inflation.
With the rise of remote and hybrid work modes, Australian enterprises are stepping up efforts to improve employee experience, retention and productivity, ISG says. Companies are looking for ways to use Microsoft Teams, SharePoint and OneDrive to enhance collaboration. While still focused on AI, employers are now exploring how to use it to augment human productivity rather than replace workers. Providers are introducing services to help clients create better workplace experiences by tapping into existing data.
Demand for FinOps and related services is growing in Australia as margin pressures lead organizations to increase oversight of IT projects and cloud services, the report says. While cloud-based pay-as-you-go models let companies reduce infrastructure spending, maximizing their value requires cost optimization and predictability. Enterprises are working with providers to better manage Microsoft 365 and Copilot licensing costs, and demand is growing for tailored solutions based on industry-focused blueprints and accelerators.
As Australian companies deploy hybrid clouds, they are aligning technology investments with rising regulatory expectations, including data privacy, cybersecurity standards and AI ethics. Unified security management, compliance and risk mitigation are business imperatives.
"Cyber threats continue to escalate, and Australian enterprises are responding with a sharper focus on prevention, detection and resilience," said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. "AI is becoming a critical enabler for improving response speed, decision quality and control of IT environments."
The report also examines other Microsoft AI and cloud trends affecting enterprises in Australia, including the evolution of Microsoft’s AI tools from pilots to production and the growing demand for Microsoft solutions to manage and reduce carbon footprints.
For more insights into the Microsoft-related challenges facing enterprises in Australia, along with ISG’s advice for overcoming them, see the ISG Provider Lens™ Focal Points briefing here.
The 2025 ISG Provider Lens™ Microsoft AI and Cloud Ecosystem report for Australia evaluates the capabilities of 39 providers across four quadrants: Managed Services for Azure, Microsoft 365 Services, Power Platform Services and AI Services for Microsoft Clouds.
The report names Accenture & Avanade, DXC Technology, Fujitsu, Kyndryl, TCS and Wipro as Leaders in all four quadrants. It names Capgemini, HCLTech and Telstra as Leaders in three quadrants each. IBM, Infosys, Logicalis, Unisys and Velrada are named as Leaders in two quadrants each. Barhead Solutions, an Akkodis company; Macquarie Cloud Services and NTT DATA are named as Leaders in one quadrant each.
In addition, NTT DATA is named as a Rising Star — a company with a "promising portfolio" and "high future potential" by ISG’s definition — in two quadrants. Tech Mahindra is named as a Rising Star in one quadrant.
In the area of customer experience, HCLTech is named the global ISG CX Star Performer for 2025 among Microsoft Cloud Ecosystem Providers. HCLTech 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.
The 2025 ISG Provider Lens™ Microsoft AI and Cloud Ecosystem report for Australia 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 (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.
