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German Firms Adopt Hybrid Clouds for Compliance, Control

Enterprises seek new infrastructure solutions amid economic worries, increasing regulation, rising interest in GenAI applications, ISG Provider Lens^庐 report says

FRANKFURT, Germany--(BUSINESS WIRE)-- German enterprises are rapidly shifting from public cloud services to private and hybrid cloud solutions, driven by regulation, data security concerns and the desire for greater control over IT resources, according to a new research report published today by Information Services Group () (Nasdaq: ), a global AI-centered technology research and advisory firm.

The 2025 ISG Provider Lens^庐 Private/Hybrid Cloud 鈥� Data Center Services report for Germany finds that organizations are implementing private and hybrid cloud environments to better address operational, compliance and data protection requirements. These environments offer the flexibility, scalability and agility enterprises need while controlling costs and ensuring data residency. As German organizations rationalize budgets and optimize IT costs amid persistent economic uncertainty, chief technology officers (CTOs) face increasing challenges in justifying expenditures and managing the complexities of hybrid models.

鈥淥rganizations in Germany are re-examining their existing IT infrastructures,鈥� said Dr. Matthias Paletta, director and technology modernization lead for ISG in Europe. 鈥淢any are concluding they can benefit from implementing hybrid cloud computing, along with automation and outsourcing.鈥�

As German enterprises review their data center management strategies, many are reducing the physical space of their owned facilities and increasing reliance on colocation services, the report says. This move is intended to minimize costs, improve scalability and optimize operational efficiency with assistance from external expertise and infrastructure.

Organizations in Germany are also increasingly exploring the potential of generative AI to transform their business processes and drive innovation, ISG says. Many enterprises are carefully evaluating the costs and benefits of GenAI to distinguish between inflated expectations and practical business outcomes. As interest in GenAI grows, companies are making targeted investments in infrastructure and tools that can deliver predictive analytics, actionable insights and intelligent automation. These efforts are intended to unlock new revenue streams and enable companies to harness the transformative potential of AI.

At the same time, enterprises in Germany are responding to the proliferation of IoT devices and the need for low-latency applications by deploying data center solutions that support edge computing, the report says. They are engaging with colocation and data center providers that can position edge facilities close to end users, enabling faster data processing and real-time insights for critical sectors such as manufacturing, healthcare and smart cities.

鈥淲hile new cloud models and AI-powered tools offer clear benefits, they also introduce complex integration and compliance risks,鈥� said Wolfgang Heinhaus, senior analyst, ISG Provider Lens Research, and lead author of the report. 鈥淟eading service providers enable German enterprises to implement standardized infrastructure that meets the requirements of AI and emerging technologies.鈥�

The report also explores other trends in the private/hybrid cloud and data center services market in Germany, including the expansion of partnerships and alliances among data center outsourcing providers and the impact of evolving VMware licensing on enterprise cloud strategies.

For more insights into the private/hybrid cloud and data center services challenges that enterprises in Germany face, plus ISG鈥檚 advice for overcoming them, see the ISG Provider Lens^庐 Focal Points briefing .

The 2025 ISG Provider Lens^庐 Private/Hybrid Cloud 鈥� Data Center Services report for Germany evaluates the capabilities of 101 providers across seven quadrants: Managed Services 鈥� Large Accounts, Managed Services 鈥� Midmarket, Managed Hosting 鈥� Large Accounts, Managed Hosting 鈥� Midmarket, Colocation Services 鈥� Large Accounts, Colocation Services 鈥� Midmarket and AI-Ready Infrastructure Consulting.

The report names Arvato Systems, Deutsche Telekom (T Business), Kyndryl and q.beyond as Leaders in three quadrants each. It names Accenture, Atos, Axians, CANCOM, Capgemini, Claranet, DATAGROUP, HCLTech, Infosys, NTT DATA, plusserver, Rackspace Technology, Syntax and T-Systems as Leaders in two quadrants each. All for One Group, AtlasEdge, akquinet, Cognizant, CyrusOne, Digital AG真人官方ty, Equinix, IONOS, ITENOS, KAMP, maincubes, Materna, noris network, PFALZKOM, STACKIT, TCS, Telehouse, TelemaxX, WIIT and Wipro as Leaders in one quadrant each.

In addition, CONVOTIS is named as a Rising Star 鈥� a company with a 鈥減romising portfolio鈥� and 鈥渉igh future potential鈥� by ISG鈥檚 definition 鈥� in two quadrants. Grass-Merkur, LTIMindtree and NorthC Datacenters are recognized as Rising Stars in one quadrant each.

In the area of customer experience, Persistent Systems is named the global ISG CX Star Performer for 2025 among private/hybrid cloud and data center service providers. Persistent Systems earned the highest customer satisfaction scores in ISG鈥檚 Voice of the Customer survey, part of the ISG Star of Excellence鈩� program, the premier quality recognition for the technology and business services industry.

Customized versions of the report are available from , , , , , , and .

The 2025 ISG Provider Lens^庐 Private/Hybrid Cloud 鈥� Data Center Services report for Germany is available to subscribers or for one-time purchase on this .

About ISG Provider Lens^庐 Research

The ISG Provider Lens^庐 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鈥檚 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鈥檚 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

(Nasdaq: ) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world鈥檚 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.

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Philipp Jaensch, ISG

+49 151 730 365 76

[email protected]



Matthias Longo, for ISG

+49 152 341 464 63

[email protected]

Source: Information Services Group, Inc.