Joel Martin — Executive Research Leader, HFS Research[00:05]
Hi, I’m Joel Martin, executive research leader at HFS Research. I’m joined here by Nikhil Kumar, who worked with me on our latest Horizons report, Data Modernization Services. Data Modernization Services is the third of a series of reports Nikhil and I have been working on, starting with Hyperscaler Services, moving to app modernization services, and now data modernization. It’s really the last mile of improving the overall digital transformation journey that many companies have been on. Data modernization is incredibly important because it’s moving from a lot of legacy investments in old on-premise databases and warehouses to modern lakehouses, modern cloud-based data warehouses, and analytics tools. We focused around a value stream methodology, looking at what is the journey service providers are working with their clients to get from where they are right now — their current data state, which is often siloed, decentralized, distributed, and often not trusted, with a lot of integration between applications, different data sources, web sources, and even customer-facing sources that make it hard for employees to trust the data. The value chain we focused on was the services across six different areas that companies were focused on. First, the discovery and assessment of existing data sources, whether they’re databases, storage, repositories, warehouses, etc., and how they assessed how those were integrated across their organization — and what they were going to do to modernize that to make them more cloud-ready, adopting hybrid and multi-cloud as well as on-premise services. Second, we looked at the platform architecture design, obviously focusing a lot on applications modernization and hyperscaler services. We looked at how companies are embracing the cloud. Data needs to embrace the cloud the same way. So looking at how tools and partnerships with companies like Snowflake and Databricks are coming in to support data modernization services. Then migrating, creating, and retiring old databases — what kind of tools, frameworks, and IP did the various companies that we surveyed bring to the table? Then integrating, automating, and orchestrating that data. Taking the data to the next level, making business and IT work closely together to use data from operational technologies, IoT technologies, IT technologies, and transactional technologies — integrating, ingesting, capturing, and analyzing data from multiple sources and making those useful for the companies, their employees, customers, and their ecosystem partners. And of course, step five, what are they doing around governance and security? Embedding governance and security and modernizing how they’re looking at data and distributing that data out to their teams. And then finally, operating, running, and delivering a modern data estate — being able to bring together their partnerships with ISVs, with cloud providers, and also emerging innovative new technologies to help companies differentiate and accelerate their overall data journey. So that’s the value stream that we focused on. Using that value stream, we interviewed 23 different service providers, from Accenture to Zensar — Cognizant, IBM, Infosys, Sonata Software, Upstarts — existing industry bellwether veterans. We captured a ton of insights, not only from our briefings with those service providers and advisory companies, but also by speaking to their partners as well as their customers. We spoke to over 60 partners and customers as part of this journey to collect the information. And Nikhil, tell me a little bit about some of the key insights that you picked up on from those partner and customer interviews.
Nikhil Kumar Bhaskar — HFS Research[03:54]
Thanks, Joel. So on the customer insights, from all the inputs that we received from the references that were provided by the service providers, more than 50% of them highlighted the need for service providers to deliver functional and technical outcomes, especially the optimized technical outcomes. When asked about the challenges that they faced during their data modernization journey, they cited limitations on talent and obviously the budget that they need to address the required changes to move to the modernized data state from the legacy data state. Some of the customers even went on to say that they would love to see their service providers help them address their regulatory requirements, which at the moment is explored by only a select few. On the partner references, partners seemed to applaud the service providers’ commitment to building a relevant talent pool, the knowledge of the customer data platforms and challenges, and their ability to bring business users into the conversation. However, the partners also felt that service providers should engage them early on in the sales cycle and should be doing more joint development of the software and services go-to-market. We will educate our audience more as we come up with some data viewpoints on it in the later segment of the report.
Joel Martin — Executive Research Leader, HFS Research[05:13]
Thank you, Nikhil. This report is available today. Please go to HFSResearch.com to download a copy of it. And please feel free to reach out to me, Joel Martin, or Nikhil Kumar with any questions or insights or engagements you’d like to have to find out more about our research, the companies we covered, and the journey that your company is probably on today. Thank you.
