Third-wave cloud consultants take on larger scope of services

Cloud consultancies have grown from boutiques to firms with global ambitions. The latest iteration of these consultancies will push the business in new directions.

Cloud consultants have entered the third wave of their rapidly evolving existence, departing significantly from their predecessors in scale, scope and service delivery approaches.

Long-time cloud executives signaled this third phase with the very names of their latest ventures. In January 2021, Chris Barbin, who co-founded Appirio in 2006, launched Tercera (Spanish for "third") as an investment and business advisory firm focused on cloud professional services partners. The next month, Jason Wojahn, a former executive at Cloud Sherpas, unveiled Thirdera, a ServiceNow cloud consultancy. The executives said they arrived at their companies' names independently.

"We weren't comparing any notes," Wojahn said. "But we're making the same observation."

The latest crop of cloud consultants -- whether you call them third wave, third era or new generation -- are moving in innovative directions compared with companies that launched a dozen or more years ago. Cloud consultants have grown global in scale. Skills sets have deepened and broadened to keep pace with the sophistication of cloud deployments. And there's an increased emphasis on repeatable offerings and intellectual property.

Third-wave cloud consultants are poised to help enterprises short on cloud expertise fill the immediate skills gap and, looking to the future, deploy emerging technologies on the cloud foundation.

Chris BarbinChris Barbin

"Service firms that are completely cloud native and really focused on the cloud and building on cloud platforms are aware they have a unique advantage," Barbin said.

Evolutionary path of cloud consultants

The advent of professional services-oriented cloud specialists followed the arrival of cloud platform providers and their offerings. The initial group of cloud consultants included Bluewolf, founded in 2000, and Model Metrics, founded in 2003. Both companies focused on implementing Salesforce, which launched in 1999. Similarly, Cloud Sherpas set up shop in 2008, originally concentrating on Google Apps, which debuted in 2006.

The first-wave companies had a boutique vibe. They stood out just for building their businesses on cloud when the longevity of the technology was still in question. Characteristics of these companies included technical proficiencies in SaaS and waterfall development methodologies, as well as delivery models that revolved around horizontal expertise and a project orientation, according to Barbin's cloud evolution schema (see graphic).

Cloud consulting third wave chart
The emerging generation of cloud consultants adds a raft of new technologies and delivery approaches.

Second-wave companies, meanwhile, cultivated technical skills in cloud platforms such as AWS and Google Cloud and adopted agile methodologies. They also adopted a broader, programmatic approach to service delivery. Additionally, vertical sales and expertise became more important, according to Barbin.

The second generation also marked the transition from boutiques and regional firms to national and global providers -- often via acquisition. Notable deals included Accenture's purchase of Cloud Sherpas, Wipro's acquisition of Appirio, and Hewlett Packard Enterprise's acquisition of Cloud Technology Partners.

The third wave, now underway, also emphasizes geographic reach. In addition, cloud consultants must offer a wider scope of services and expertise than ever before to match the growing complexity of customer deployments.

Brendan WalshBrendan Walsh

Cloud consultants 'broaden the aperture'

Cloud consultancies, amid high demand for their services, are moving into implementation and operations, said Brendan Walsh, senior vice president of partner programs at 1901 Group, an MSP and wholly owned subsidiary of Leidos. 1901 Group is an AWS Consulting Partner and also works with other firms as a prime contractor or subcontractor.

This move to offer a full range of lifecycle services marks a shift for consultants, which traditionally pursued strategy, planning and design services.

Sandra LopezSandra Lopez

"[Cloud consultants] have to broaden the aperture," noted Sandra Lopez, operations CTO for the Enterprise and Cyber Solutions Division at Leidos, an IT and engineering services company based in Reston, Va.

The expanding services lineup arrives as third-era consultants aim to address new customer objectives.

"The last era was about getting to the cloud, adopting the cloud … and ensuring agility," Wojahn said. Now, the goal is to get the most out of the cloud, he said.

Indeed, organizations have deployed digital footprints consisting of multiple SaaS offerings and cloud platforms. Costs can easily spiral out of control as cloud use continues to accelerate.

KC SreeramKC Sreeram

"The pace of innovation is moving at a speed that we have never experienced before," said KC Sreeram, vice president for cloud infrastructure services at Trianz, a global digital transformation strategy company based in Santa Clara, Calif.

The accelerated tempo of innovation makes it critical to have a well-thought-out cloud migration strategy, Sreeram noted. That's why Trianz taps its strategy and digital transformation practice for all its cloud engagements, "with the objectives of optimizing a client's digital footprint and total cost of ownership," he added.

The cloud optimization challenge also involves continuously updating a customer's deployment to meet their evolving needs.

"After the initial wave of adopting the cloud, you also have to work with clients to continually right-size and resize their implementations as a result of the changes in their businesses," Wojahn said.

Third-wave firms focus on AI, ML

The third wave of cloud consultancies also stands out for its cultivation of AI and machine learning (ML) skills.

Jason WojahnJason Wojahn

Thirdera, for example, aims to help customers become "future ready" so they can quickly adopt AI/ML, Wojahn said.

Accordingly, cloud consulting firms are building out their expertise and developing specialized practices. Mission Inc., a Los Angeles-based managed cloud services provider, illustrates this trend: In February, 2021, Mission launched its data, analytics and machine learning consulting practice.

Ryan RiesRyan Ries

Ryan Ries, practice lead of data science and engineering at Mission, cited businesses' need for "trusted partners," given the difficulty of identifying emerging technology experts. "As more and more companies are trying to utilize AI/ML, it is harder to find talented data scientists that can solve problems and really dig into understanding the business," he said.

Emerging cloud services intend to address the talent deficit. Mission provides a data-lake-as-a-service offering, which houses data that customers can access and process for AI/ML. The service lets customers outsource data infrastructure and management, rather than "trying to grow and scale out an internal team," Ries said. Smaller businesses or startups can find it difficult or expensive to hire experienced personnel for building such infrastructure, he added.

Rapid delivery has become another characteristic of the new generation of cloud consultants, given the acceleration of cloud and related technology developments.

Trianz helps clients use DevSecOps, AI and ML in cloud operations, Sreeram said. But security must accompany speed on the cloud journey.

"As organizations continue to move their [on-premises] workloads to cloud, it becomes highly imperative to not only … deliver services faster, but also be able to do so securely," Sreeram said. "Compliance, threat intelligence, code analysis and vulnerability management need to be part of the [software development lifecycle] to ensure a secure codebase right from inception."

Cloud advisors move toward 'productized' offerings

Third-wave cloud consultants also gravitate toward repeatable offerings built on their own intellectual property.

Service firms that are completely cloud native and really focused on the cloud and building on cloud platforms are aware they have a unique advantage.
Chris BarbinCEO, Tercera

"A very common pattern across all of the firms we talked to is the desire to have more revenue that is [intellectual property-driven] or productized," said Barbin, who has spoken with more than 200 cloud consultancies over the last 18 months.

The level of intellectual property sophistication varies among consultants. In some cases, cloud consultants have created frameworks, methodologies or accelerators. Such offerings can help consultants deliver better services but aren't true products, Barbin noted. He views fully fledged products as "solutions" a consultant develops, typically with a vertical orientation, on top of a cloud platform.

Cloud consultants may find the high degree of product development, coupled with the continuous demand for updates and maintenance, difficult to achieve. A consultant would need to have a dedicated product team with a separate organizational structure and a focus on product management, Barbin noted.

Companies under the $10 million to $20 million revenue range may lack the excess margin needed to fund a product business, he said.

A different market

Another key difference for the latest group of cloud consultants: The market in which they offer services has significantly matured.

The market is in a very different place than when Appirio launched 15 years ago, Barbin said. At the time, Appirio's task was to evangelize the cloud and persuade customers it was real. Today, customers don't need assurance of the cloud's viability, he said.

Customers' confidence in cloud has grown, compared with the early days when some observers considered the technology merely a fad, Leidos' Lopez added.

"It's not the shiny object anymore," she said.

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