Categories Analysis, Technology

For most businesses, cloud is more than just a digital transformation engine

It is estimated that all businesses would be using at least one cloud service in the near future, creating new opportunities for service providers

The majority of enterprises that managed to stay unaffected by the pandemic owe their resilience mainly to the development of public cloud platforms in the last few years. While there is uncertainty about how the situation is going to evolve and how long the current restrictions would continue, it is almost certain that cloud technology will play a crucial role in helping the economy recover.

Also read: Microsoft set to leverage cloud demand

The leading cloud service providers might need to scale up their capabilities to meet the spike in demand. So, the cloud market is on the threshold of a major expansion and busy days are awaiting the leading players amid high demand for new technologies like managed services and hybrid cloud. According to a recent study, the global public cloud infrastructure market will expand by 35% to $120 billion in 2021. Next year is going to be crucial for the companies as the future of the pandemic will likely be determined then.

The COVID Effect

A key component of the business world’s shift to the new normal has been digital transformation – something that cannot be achieved without the support of cloud technology. In the changed scenario, most organizations do not have a choice when it comes to shifting their operations to digital platforms and that bodes well for cloud firms. Also, disaster recovery is moving from on-premises to cloud amid concerns about data safety.

Amazon reports Q3 2020 earnings results

AWS Dominates

Amazon, Inc. (NASDAQ: AMZN), the online marketplace with a strong footprint in the cloud space, saw the revenues of Amazon Web Services (AWS) surging by a third in the September-quarter — almost matching the growth registered by its core e-commerce business that continues to thrive on the shopping boom set off by the pandemic. In what could be a sign that the infrastructure is stressed, AWS suffered a major outage last month that threw its services across the world out of gear. Realizing the need to expand, the company is planning to open a second infrastructure region – AWS Asia Pacific Region – in Australia in a year.

Going Extra Mile

Azure, the cloud service offered by Microsoft Corp. (NASDAQ: MSFT) that shares the top spot with AWS, is probably going the extra mile to tap the unfolding opportunity. In a first in the sector, the Azure Digital Twins was launched recently to allow customers to track both past and present events, simulate possibilities, and predict future events. Earlier, the tech giant reported impressive first-quarter results partly on the strength of its cloud business. The company continues to expand the presence of Azure data-centers globally, with the latest move being the launch of a new region in Denmark.

Microsoft Q1 2021 earnings infographic

Another tech firm vying for a big slice of the cloud pie is Alibaba (NYSE: BABA). The e-commerce firm’s relatively smaller presence in the cloud market makes it a surprise contender. With the business rapidly expanding beyond the Asia Pacific, Alibaba Cloud is currently competing with Google Cloud for third place, after AWS and Azure.

Catching Up

Google Cloud, from Alphabet, Inc. (NASDAQ: GOOG, GOOGL), is busy expanding its clout in the market, after lagging behind its bigger rivals for a long time. The growth strategy involves differentiating the offerings through innovations like packages designed for specific sectors. Indicating that the company is on target to achieve its growth goals, revenues of Google Cloud expanded about 45% in the most recent quarter, exceeding the growth rate of the other business segments.

Related: Q3 2020 Earnings Call Transcript

While the variables differ for each service provider, there is something that is common for them — focus on multi-cloud and hybrid technology. It is estimated that currently, almost every business uses at least one cloud service, which justifies the rapid evolution of the sector from software services to new concepts like everything-as-a-service.

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Read the full conference call transcript here. It’s free!

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