Microsoft Platforms Drive AI Modernization in Asia Pacific

Key Terms

data sovereignty regulatory

Data sovereignty is the principle that digital information is subject to the laws and control of the country or entity where it is stored or processed. For investors, it matters because where data lives affects a company's legal obligations, costs, ability to sell services across borders, and exposure to government access or restrictions — like owning a house that must follow the rules of the town it sits in.

hyperscale data center technical

A hyperscale data center is a very large, highly automated facility designed to house thousands of servers and networking devices that can quickly expand to handle massive computing and storage needs. For investors it matters because these centers support cloud services, streaming and AI workloads that drive steady, high-volume revenue; owning or serving hyperscale capacity signals scale, lower per-unit costs and exposure to fast-growing digital demand.

edge computing technical

Edge computing is a technology that processes data close to where it is generated, such as sensors or devices, rather than sending it all to a distant central location. This allows for faster decision-making and reduces delays, much like having a local office handle urgent matters instead of waiting for instructions from a main headquarters. For investors, it signifies improved efficiency and real-time insights, which can enhance the performance of technology-dependent industries.

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Organizations in the region are using Microsoft cloud and AI platforms to unify technologies for secure, resilient operations, ISG Provider Lens^® report says

SYDNEY--(BUSINESS WIRE)-- Enterprises across Asia Pacific are increasingly incorporating Microsoft cloud and AI platforms into integrated operating environments as they respond to economic uncertainty, evolving regulations and intensifying competition, 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 2026 ISG Provider Lens^® Microsoft AI and Cloud Ecosystem report for Asia Pacific finds that Microsoft platforms and services are playing key roles in a broad transition from infrastructure modernization to AI-enabled business transformation. Across Australia and New Zealand, Southeast Asia and India, organizations are integrating cloud, data and AI capabilities into business processes to improve operational efficiency, strengthen customer engagement and make better use of enterprise information.

“In Asia Pacific, AI has quickly matured from an experimental technology into the driving force of enterprise transformation,” said Michael Gale, partner and regional leader, ISG Asia Pacific. “Enterprises in this market increasingly view the Microsoft ecosystem as strategic to the next phase of modernization.”

Organizations throughout the region are bringing together Microsoft cloud, AI and productivity platforms to create more unified operating environments. Rather than treating AI adoption as a separate initiative, enterprises are embedding AI capabilities into existing business processes to improve everyday operations. This strategy helps to address continuing challenges around fragmented data, legacy infrastructure and growing pressure to demonstrate measurable returns on technology investments. Modern, integrated environments help employees automate routine work, gain access to information and generate insights that support faster, more informed decisions.

Changing enterprise priorities around security, regulation and operational resilience are also influencing Microsoft adoption in Asia Pacific. Organizations are adopting responsible AI practices and secure cloud architectures that comply with evolving data sovereignty requirements. Microsoft is making massive investments to support increased usage in the region, including a $3 billion expansion framework across Asia Pacific and the establishment of the company’s largest regional hyperscale data center in Hyderabad, India. Many enterprises are adapting Microsoft technologies to industry-specific operational needs, including digital public services, financial operations, manufacturing and customer engagement, ISG says.

"Organizations that integrate cloud, data and AI capabilities into a coherent modernization strategy, rather than pursuing them piecemeal, see measurably better outcomes," said Siddharth Idnani, lead author of the report. "Service providers play a critical role here, helping enterprises embed Microsoft technologies into secure, scalable environments built for the long term."

The report also explores other trends affecting Asia Pacific enterprises, including the growing use of edge computing with cloud environments and Microsoft’s significant investments in training to address a regional shortage of AI and data engineering talent.

For more insights into AI and cloud challenges in Asia Pacific that are relevant to the Microsoft ecosystem, along with ISG’s advice for overcoming them, see the ISG Provider Lens Focal Points briefing here.

The report evaluates the capabilities of 36 providers across three quadrants: Microsoft Productivity and Business Process Services, Azure Data Transformation and AI Services and Azure Managed Services.

It names Accenture & Avanade, DXC Technology, HCLTech, Infosys, Kyndryl, TCS and Wipro as Leaders in all three quadrants. Cognizant, Macquarie Cloud Services and Telstra are named as Leaders in two quadrants each. Fujitsu and NTT DATA are named as Leaders in one quadrant each.

In addition, Cognizant and LTM are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

A customized version of the report is available from Informotion.

In the area of customer experience, Wipro is named the global ISG CX Star Performer for 2026 among Microsoft ecosystem providers. Wipro 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 2026 ISG Provider Lens Microsoft AI and Cloud Ecosystem report for Asia Pacific is available to subscribers or for one-time purchase on 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 and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its 1,500 professionals worldwide working together to help clients maximize the value of their technology investments.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260720370741/en/

Laura Hupprich, ISG
+1 203-517-3132
laura.hupprich@isg-one.com

Erik Arvidson, Matter Communications for ISG
+1 978-518-4542
isg@matternow.com

Source: Information Services Group, Inc.