German Enterprises Focus Public Cloud Strategies on AI

Enterprises in Germany are adopting cloud services designed for AI workloads as they seek the features, computing power and storage capacity to support growing AI deployments, according to a new research report published today by Information Services Group (ISG) a global AI-centered technology research and advisory firm.

The 2025 ISG Provider Lens^® Multi Public Cloud Services report for Germany finds that growth in public cloud services is no longer driven primarily by faster time to market or enhanced customer experience. Growth is increasingly shaped by the integration of AI technologies, with enterprises prioritizing scalable infrastructure, security controls and support for sustainability and sovereign cloud requirements.

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“As enterprises move AI from pilots into core operations, they are reassessing the role of cloud platforms in supporting their business,” said Matthias Paletta, director at ISG. “They demand cost optimization, data protection and use cases aligned to their specific industries. These expectations are leading providers to deliver greater efficiency and sustained value.”

Sovereign cloud capabilities have shifted from a provider-led initiative to a core enterprise expectation. German enterprises are seeking stronger control over data, compliance and legal certainty, ISG says. This shift has increased demand for cloud solutions that ensure local data residency without sacrificing scalability. Hyperscalers are responding by expanding regional data centers, aligning their offerings with local regulations and strengthening security controls. With these advances, they are allowing enterprises to adopt sovereign cloud models while still enjoying the flexibility, scale and innovation of public cloud infrastructures.

Facing increasing competition, German companies are sharpening their focus on cloud cost optimization, the report says. While scalability and performance remain essential, budget constraints and economic uncertainty are driving demand for greater financial transparency and near-term savings. In response, providers are supporting enterprises with structured cost-management approaches and optimization frameworks. Advisory services help align cloud investments with business priorities, improve return on investment and maintain operational efficiency throughout digital transformations.

Small and midsize German enterprises increasingly seek end-to-end cloud and IT solutions that include strategy, transformation and ongoing operations, ISG says. Organizations in Germany prefer integrated offerings from a single provider that combine advisory capabilities with reliable managed services. To meet these expectations, leading providers are strengthening their industry-specific expertise and realigning their organizations around the needs of specific verticals. These providers are best positioned to address evolving small and midsize business requirements and build long-term customer relationships.

“Enterprises in Germany are increasingly focused on cybersecurity and sustainability as risk exposure and regulatory expectations rise,” said Ulrich Meister, lead author of the report. “Many are partnering with providers on strategies to protect assets, including IoT infrastructure, and meet climate goals.”

The report also explores other trends in German cloud adoption, including the growing demand for interoperable data and AI services across multiple cloud platforms and enterprise efforts to consolidate cloud management partners.

The 2025 ISG Provider Lens^® Multi Public Cloud Services report for Germany evaluates the capabilities of 100 unique providers across eight quadrants: Consulting and Transformation Services — Large Accounts; Consulting and Transformation Services — Midmarket, Managed Services — Large Accounts; Managed Services — Midmarket, FinOps Services and AI-driven Optimization, Hyperscale Infrastructure and Platform Services, SAP HANA Infrastructure Services, and Secure Enterprise Filesharing Services.

The report names Deutsche Telekom/T-Systems as a Leader in seven quadrants. It names Accenture, Arvato Systems, Atos, CANCOM, Capgemini, DATAGROUP, HCLTech and Microsoft as Leaders in three quadrants each. It names AWS, Claranet, Google, Infosys, Kyndryl, NTT DATA, Rackspace Technology, Skaylink, Syntax, TCS and Wipro as Leaders in two quadrants each. All for One Group, Axians, Box, Brainloop, DRACOON, Dropbox, FTAPI, IBM, idgard, IONOS Cloud, noris network, OVHcloud, plusserver, Reply and STACKIT are named as Leaders in one quadrant each.

In addition, DATAGROUP, Exoscale, GRASS-MERKUR, IBM, LTIMindtree, msg services, NTT DATA and Syntax are recognized as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

In the area of customer experience, LTIMindtree is named the global ISG CX Star Performer for 2025 among multi public cloud service providers. LTIMindtree 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.

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