Cloud Infrastructure and the Pandemic- A shining light
Technology - June 1st, 2020
Even before the pandemic, there was a steady rush from companies to move to Cloud. Digital transformation and Cloud adoption had started to become mainstream and it was only a matter of time before every company adopted the necessary measures to operate completely with Cloud technologies and infrastructure.
Then the pandemic happened and companies who had already put a cloud infrastructure in place found themselves at an advantage over their on-premise counterparts. In spite of the limitations, these companies were able to ensure business continuity for their clients, partners and employees.
Synergy Research did a thorough study on Cloud infrastructure, covering areas such as key vendors, spending, growth factors etc. The research cited that Cloud Infrastructure market amassed a total revenue of $29 billion in Q12020. The revenue is almost comparable to Q42019 however as pandemic has put a firm brake on other industries, it is encouraging to see Cloud vendors posting a growth in these turbulent times. This also signifies a major shift in market trends as the pandemic is forcing companies to switch to Cloud. Companies are looking at Cloud to provide flexibility and a secure and consistent way to maintain their operations. The biggest worry for them are the restrictions and uncertainties which the pandemic has brought to the world of business. Cloud provides a sustainable solution to these core issues and this is the main reason of this unexpected growth.
Here are two key charts from the Synergy Research report.
As you can see from the graphs, the biggest beneficiaries are Amazon and Microsoft. Amazon Web Services (AWS) is leading the pack with more than $10 billion in quarterly revenue as it maintains its firm grip on the market. Microsoft posted around $5.2 Billion in Azure numbers and Google came in third with $2.78 Billion in Cloud revenue. In terms of run rate, AWS and Azure are firmly ahead with a combined run rate of over $60 Billion.
In terms of market share, it is 32% for AWS, 18% for Microsoft and Google stands at 8%. In terms of rate of growth, Synergy reported that Microsoft has outpaced AWS in terms of rate of adoption. This is a very encouraging sign for Microsoft as it has taken aggressive steps to expand its market share in the Cloud space and close the gap with AWS.
Beyond the Pandemic: Next steps for Cloud Infrastructure companies
Now that the companies are accustomed to remote functioning in light of the pandemic, the long-term approach of enterprises must be reimagined. The areas such as compliance, privacy and security must be expanded to accommodate these workplace changes. From now, employee safety is going to be the number one priority for businesses and everything will be adjusted to accommodate these priorities. Even Cloud datacenters will be maintained in such a way that the personnel operating these centers feel safe at their workplace. These priorities and this shift in organization and employee behaviour is going to be in place even after the pandemic. As one expert from AWS pointed out, "No one was prepared for this. In future, everyone would be prepared for anything".
Below are the predicted changes described in bullet points.
1. Companies are never going back to the old world as they will gradually realize that they can extract similar productivity from their employees. The location bound workplace confined in specific cities or regions is soon going to be a thing of the past.
2. With this shift in mindset, companies will realize that they can mitigate the risks and increase their flexibilities by leveraging the benefits of Cloud infrastructure. The long-term plan includes Public Cloud, Mobile computing, 5G connectivity etc. Gone are the days, when companies used to purchase laptops and desktops in bulk. The companies will now endeavour to provide cloud infrastructure and security to employees own individual systems.
3.Before the pandemic, companies had only moved 30-40% of their infrastructure to cloud. This would be going to drastically change as more and more businesses may become 100% Cloud based.
4. Enterprises who were all cloud didn't have to worry about protecting their employees from Coronavirus. They swiftly moved to remote and business continuity sustained. This is the biggest takeaway for companies who haven't embraced the Cloud completely.
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Private cloud is popular with companies whose priority is privacy and security. They do not want to share datacentres and are strongly concerned about loss and breach of data. Virtualization on the other hand is the most popular technology concerned with enabling cloud computing. There is widespread confusion in the cloud computing about the two being the same. In fact, virtualization is not Cloud computing it is just a stepping stone for enabling cloud computing which requires more components to work together to provide scalability, elasticity, agility and other features .
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