Has the pandemic affected Cloud Adoption Rate?

Most organizations fashioned ‘specific businesses continuity strategies’, which assisted them in keeping their services uninterrupted while maintaining a smooth customer experience. The Cloud has been enabling businesses to move to the cloud with their applications, data, while also providing the tools necessary to face operational challenges efficiently and gain insights to address pressing issues. Industries like travel and hospitality had to cease their operations due to the world-wide travel ban and are now struggling to stay afloat. In short, many industries and businesses have been negatively affected by the pandemic – forcing them to pick up the pace of their digital transformation.

So, has the pandemic accelerated the rate of Cloud Adoption?

The CEO of Amazon Web Services, Andy Jassy, stated that, “the Covid-19 pandemic has accelerated cloud adoption by several years and that the rate of growth at AWS continues to accelerate at a phenomenal rate.” With Amazon being an e-commerce giant, its cloud arm, Amazon Web Services has been a world leader in driving the growth of cloud computing in the current IT space. “If you look at AWS, as an example, to grow to a $46 billion revenue run rate with 29% (year-over-year) growth meant we had to grow at an incremental $10 billion in the last 12 months to get there; that is much larger than you’ll see elsewhere in the cloud,” the AWS CEO informed.

According to Gartner’s recent market segment analysis, AWS continues to have a very significant Cloud market segment share at about 45 per cent — more than double that of the second-placed provider. Here are some mind-boggling numbers and latest trends.

• Worldwide end-user spending on public cloud services is forecast to grow 23.1% in 2021 to total $332.3 billion, up from $270 billion in 2020.
• Gartner predicts worldwide end-user spending on public cloud services will jump from $242.6B in 2019 to $692.1B in 2025, attaining a 16.1% Compound Annual Growth Rate (CAGR).
• Spending on SaaS cloud services is predicted to reach $122.6B this year, growing to $145.3B next year, attaining 19.3% growth between 2021 and 2022.

Now, let us take a look at some key reasons why there was an acceleration in cloud adoption.

A resilient IT infrastructure

When the cloud was still a new concept, it focused on innovation, faster time to market and cost optimization. Now organizations recognize other benefits like flexible computing power to meet requirements, disaster management/recovery, lower costs, always available, remote workforce management and many more features that can help businesses stay uninterrupted. According to a recent survey from Flexera, 27% of leaders mentioned a significant increase in cloud spend due to Covid-19.

Working from home

Everybody has experienced working from home during the past year, in some form or the other. Businesses were actively looking for solutions to ensure a smooth transition from working from premises to working remotely. The cloud has helped several organizations, small, medium to huge corporations keep their business alive remotely. The cloud has also positively impacted how teams collaborate on a daily basis.

Revamping the Healthcare Industry

The race for the vaccine was kicked off as soon as the pandemic impacted the daily lives of the common man, businesses, sports and various other industries. The cloud has assisted the health care sector by tracking the spread of the virus, online consultations to patients, sharing information seamlessly, issuing safety protocols and even facilitating vaccine drives. The virologists have also used AI-based research to handle and process huge amounts of data to conclusively create a vaccine.

Remote Education

Initially, schools and universities had to face a lot of operational challenges as they had never foreseen such a situation where they were shut down indefinitely. Now the whole educational system is dependent on the cloud to deliver courses, tuition, evaluations and examinations. The pandemic was also a catalyst for the Ed-tech sector, which saw new innovations that created a surge in demand for remote educational services and offerings.

The cloud has a ‘green’ lining.

Historically, businesses have been driving on key factors like finance, security and ability to scale efficiently. But now, organizations are taking a proactive approach to make their businesses sustainable and environmentally friendly. According to the latest UNGC-Accenture Strategy CEO Study, more than 99% CEOs from large companies agree that sustainability issues are important to the future success of their businesses. Cloud migrations can lead to an efficient 60%+ reduction in energy utilized and 80%+ reduction in the carbon footprint of the organization.