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In the Zone

Why companies are flocking to the cloud

Peter Krass's picture

by Peter Krass on 08/27/2020
Blog Category: cloud-and-data-centers

Every cloud has a silver lining. For businesses coping with the pandemic lockdown, that silver lining is, well, the cloud.

Cloud-based services have become essential for businesses coping with, and working to emerge from, the lockdown. These services include online collaboration and meeting tools, e-commerce, remote learning and content streaming.

“People are migrating their data to the cloud more now than they ever did before the pandemic,” David Friend, the founder and CEO of cloud storage supplier Wasabi, recently told CRN. “Our business has been booming.”

Indeed, Wasabi expects its revenue to triple this year. In part because the company competes with Amazon Web Services’ S3 service, yet offers storage at about a fifth of the giant’s price.

Another company benefiting from the cloud’s recent rise is Salesforce, which offers cloud-based products only. For its most recent quarter, Salesforce reported revenue of $5.15 billion, substantially better than the $4.9 billion expected by financial analysts. Looking ahead, Salesforce now expects revenue in the current quarter will be even higher.

Hewlett Packard Enterprise is riding the cloud wave, too. The company’s CEO, Antonio Neri, recently told CRN that in the most recent quarter, HPE’s Green Lake on-premises cloud service had a record-breaking 82% growth in service orders. Because fully 70% of enterprise apps are still on-prem, Neri added, customers seek a consumption-driven model. “Cloud is not a destination,” he added, “it’s an experience.”

Record quarterly growth

The overall cloud market looks strong, as well. For this year’s second quarter, cloud infrastructure services spending grew more than 30% year-on-year, hitting $34.6 billion. That’s according to Canalys, which also says this figure represents the largest quarterly expansion in cloud history.

“Cloud-based services were pivotal in enabling emergency continuity plans designed to maintain virtual operations during lockdown,” explained Canalys chief analyst Matthew Ball. “These will also prove to be critical in the next phase of the response to COVID-19, as economies gradually re-open.”

As companies recover from the lockdown, Ball expects, they’ll use cloud-based services in new digital workflows such as online booking and ordering systems. The cloud could also help these companies return to the office with services that include monitoring of occupancy levels and contract tracing.

One unintended consequence of the big uptake in demand for cloud services: market watchers have been forced to accelerate their predictions. “Enterprises had talked about cloud journeys of up to 10 years,” said Rick Villars, group VP of worldwide research at IDC. “Now they’re looking to complete the shift in less than half that time.”

As businesses recover from the pandemic lockdown, the cloud’s future looks like one bright silver lining.

 

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