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Covid-19 lockdowns drive global Q2 surge in cloud infrastructure spending

bluebay2014 – stock.adobe.com Latest market tracker data from IT analyst house Canalys reveals the impact the coronavirus crisis is having on cloud spending habits worldwide By Caroline Donnelly, Senior Editor, UK Published: 31 Jul 2020 15:51 The onset of Covid-19 lockdowns by governments around the world has led to a 31% surge in spending on…

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Latest market tracker info from IT analyst home Canalys reveals the impact the coronavirus crisis is having on cloud spending habits worldwide

Caroline Donnelly

By

Published: 31 Jul 2020 15: 51

The onset of Covid-19 lockdowns by governments across the world has resulted in some 31% increase in spending cloud infrastructure services worldwide during the next quarter of 2020, Canalys research reveals.

According to the market watcher’s quarterly global cloud infrastructure servicer tracker information, spending in this segment hit $34.6bn through Q2, fuelled by the surge in demand for online collaboration, content streaming, remote learning and e-commerce tools resulting from the pandemic.

In precisely the same time, in response to the financial fallout caused by Covid-19, some CIOs have moved to pause or decelerate their transfer to the cloud, which has constrained spending growth within this area throughout Q2, said Canalyssaid

This fad is one which cloud infrastructure marketplace pioneer Amazon Web Services (AWS) acknowledged when reporting its Q2 financial results. According to Computer Weekly, the firm pointed to the fact that by trying to speed up their electronic transformation plans while some businesses have responded, others have had to scale back their IT spending.

But in the long run, the analyst house said spending growth rates are likely to rally as lockdown restrictions are lifted in certain countries and more of the economy begins to reopen.

“Cloud-based services were pivotal in enabling emergency continuity plans made to maintain virtual surgeries during lockdown,” explained Matthew Ball, chief analyst at Canalys. “These will even prove to be crucial in the next phase of the answer to Covid-19, as savings gradually reopen.

“In addition to supporting continuing distant working and distance education, cloud-based providers will underpin the deployment of new digital workflows, such as online booking and ordering systems, as well as other contactless service engagements.”

Cloud will also have a role to play from the technology that appear to make sure workplaces could be reopened and created”Covid-secure”, said Ball.

“Tracking occupancy levels and footfalls as well as contact-tracing can help reopen large offices and education facilities with assurance,” he added. “requirement for cloud-based services will remain strong as businesses accelerate their electronic transformation projects within the next 12 months to capitalise on new emerging opportunities.”

Canalys’ data further shows that AWS accounts for 31% of the total sum spent on cloud infrastructure services during Q2 across the globe, while Microsoft’s share of this industry hit 20percent for the first time during the 3 months to the end of July. Google remains in third position with a share.

According to Canalys, it appears possible as time goes by that enterprises will attempt to source cloud services from a mixture of suppliers, based on the strengths and capabilities they exhibit, as they move more of their IT off-premise within the coming years.

“Differentiation among the leading providers will be crucial as competition for clients’ spending on digital transformation projects intensifies,” said Canalys research analyst Blake Murray.

“Security, code migration and development tools, support for multi-cloud and hybrid-IT deployments, in addition to enabling more predictable expenses, will be key regions of focus as businesses look to move as speedily as possible, minimise disruption and keep within more constrained budgets”

Murray added:”The best four cloud providers have claimed the rate of innovation over the previous six months and will look to add further abilities to help win new business. But competition from additional cloud service providers will intensify.”

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