Pandemic, Partners Drove Late-2020 Cloud Boom

End-of-2020 saw a dramatic increase in cloud infrastructure services spending, driven by pandemic-related business adjustments as well as the growing influence channel partners.
Globally, cloud services were used by 39.9 billion organizations in the fourth quarter. This is a more than $3 billion increase over Q3. This is based on new data from Canalys, a market researcher that characterized the jump in dollars as the industry’s largest quarterly expansion. Synergy, another market researcher, released its Q4 cloud market analysis separately and came up with similar numbers: $37 Billion in total Q4 spending, up $4 Billion from Q3.
According to Canalys, Amazon Web Services (AWS), the cloud market leader in the US was responsible for almost a third of all cloud spending in Q4. According to the company, AWS experienced a resurgence of customer investment after a difficult Q3. AWS reported $12.7 billion in revenue in Q4 – a 28 percent increase year-over-year. Microsoft Azure, the No. Microsoft Azure, the No. 2 cloud platform, has seen its market share increase by 50% year-over-year, bringing it to 20%.
Canalys found that much of the cloud market’s strength in late 2020 was due to adjustments that organizations made during the ongoing COVID-19 pandemic. Cloud-based collaboration tools were crucial to the long-term viability and viability of remote-work/remote-education models. Streaming media and gaming services were also in high demand as consumers spent more time at home.
IT modernization projects that were put on hold during the lockdowns also started to pick up steam towards the end of the year.
“The pace of digitalization, led primarily by cloud, is increasing. In a prepared statement, Blake Murray, a Canalys research analyst, stated that companies are more confident about releasing budgets to support business transformation. “Large projects that were delayed earlier in the year have been reprioritized, led primarily by application modernization, SAP migrations, and workplace transformation. The leading industries are healthcare, financial services, and pharmaceuticals. However, even those in the most difficult situations are shifting investments to cloud, opening new revenue streams and diversifying business models.
Canalys also identified another contributor to the cloud boom, channel partners. As many businesses begin to deploy cloud services, they are increasingly relying on technology partners to help them. Partners will still be needed to assist companies that are already in cloud computing for their 2021 digitization projects.
Alastair Edwards, chief analyst at Canalys, stated that organizations will begin to look at moving more mission-critical workloads into the cloud. He said that partners will help them to identify the right cloud platforms, strategies, and solve the most pressing issues around cost control, security, and hybrid IT integration.
Cloud providers that are the best in the business recognize the importance of their partners in driving customers, driving consumption, and providing support. They invest more in their channels. Canalys pointed out that while Microsoft holds the largest share of indirect channel with Azure, the number of partner channels for AWS or Google Cloud is also increasing. AWS recently announced enhancements to its AWS Partner Network offerings (APN), including more resources for independent software vendors, new competencies, and a broader marketplace.
As businesses increasingly seek to leverage multiple combinations of public, private, and edge clouds, partners with expertise in multiple platforms are becoming more popular.
“Customer digital transformation projects require advanced co-ordination.