COVID-19 is not a match for cloud growth

Amazon Web Services (AWS), and Microsoft, the cloud giants, are flourishing despite the ongoing COVID-19 pandemic that has halted other industries around the globe.
After the top vendors released their earnings reports, market research groups Synergy & Canalys published their quarterly cloud market share analyses. Matthew Ball, Chief Analyst at Canalys, summarized the results in a succinct manner: “This has been an aide for most if it not all of the major players.”
Researchers from both firms explained that the dramatic rise in cloud service demand was due to the widespread shelter-in place ordinances, which were designed to slow the spread virus. Microsoft, for example, reported a 70% increase in daily users of its Teams collaboration tool in March. According to reports, the same month saw a 155 percent increase in spending on Amazon WorkSpaces desktop as-a-service solution.
John Dinsdale, chief analyst at Synergy, stated that while COVID-19 has a devastating effect on economies and communities around the globe, there are indications that it is having a mildly beneficial impact on the market for cloud infrastructure services. While the pandemic is certain to cause some problems for cloud providers, the public cloud provides flexibility and a safe haven for businesses that are struggling with normal operations in uncertain times.
AWS and Microsoft were the market share leaders in this quarter’s latest quarter, not surprising. According to Synergy and Canalys data, the two vendors accounted for approximately half of the global cloud infrastructure services market. According to both research firms AWS accounted to 32 percent of the market while Microsoft accounted to either 18 percent (according Synergy), or 17 percent (according Canalys). Google and Alibaba are distantly behind, with shares in the single figures.
According to Synergy’s latest quarter report, cloud infrastructure services spending rose by 37 percent year-over-year to $29 billion.
However, the quarter was not without its challenges, especially in terms of cloud vendors’ ability to handle sudden demand spikes. A recent outage in Microsoft Azure was attributed to pandemic-related traffic. Microsoft eventually had to temporarily throttle some Azure features in order to ensure service continuity.
Cloud vendors also suffered significant losses in this quarter due to hard-hit industries such as hospitality, aviation, and travel. Many cloud projects in these industries are being canceled, scaled back, or delayed as consumers plan to stay close to their homes for the foreseeable future.
In anticipation of a downturn in IT spending, large-scale cloud projects such as enterprise migrations are being put on hold. These projects are often major revenue-generators to cloud providers. IT departments are currently focusing their cloud spending only on the essentials.

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