Thursday, 04 February 2021 10:36

Cloud services market surged by US$10b in final quarter of 2020

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Cloud services market surged by US$10b in final quarter of 2020 Image by Nikin from Pixabay

Global spending on cloud infrastructure services increased by 32% year-on-year to US$39.9 billion (A$52 billion) in the final quarter of 2020, the technology research firm Canalys says.

In US dollar terms, this figure was nearly US$10 billion more than the final quarter of 2019 and more than US$3 billion than 3Q 2020.

For the full year, spending grew to US$142 billion, up from US$107 billion in 2019.

The company said the quarterly expansion in expenditure was the biggest in dollar terms as the pandemic continued to drive demand for the cloud to support remote working and learning, ecommerce, content streaming, online gaming and collaboration.

Amazon Web Services was the leading cloud service provider, accounting for 31% of the total 4Q spend. The company recovered from a mixed third quarter to record 28% growth year-on-year for the final quarter.

cloud infra2 2020

Microsoft's Azure grew by more than 50% to take 20% of the global market.

Making up the top three was Google Cloud which took a 7% share. However, while AWS and Azure recorded big profits, Google Cloud suffered a loss of US$5.6 billion for the year.

“The rate of digitisation, led by cloud, is gathering pace," said Canalys research analyst Blake Murray. "Companies are now more confident about releasing budgets for business transformation.

“Large projects that were postponed earlier in the year are being re-prioritised, led by application modernisation, SAP migrations and workplace transformation.

cloud infra 2020

"Healthcare, financial services and pharmaceuticals are among the industries leading the way, but even those under most pressure are diverting investments to cloud, opening up new revenue streams and diversifying business models.”

Canalys said as customers deployed different workloads across public, private and edge cloud infrastructure, they were seeking independent partners with capabilities across multiple cloud providers.

“Organisations are turning to trusted business partners to advise, implement, support and manage their cloud journeys, and articulate the real business value of cloud migration,” said Canalys chief analyst Alastair Edwards.

“Customer digital transformation projects are highly complex, requiring advanced consulting skills, combining deep technical skills with vertical expertise, which the cloud service providers are relying on partners to provide at scale.

"They are also turning to their partners to drive cloud consumption, and deliver full customer lifecycle support. As organisations start to consider moving more mission-critical workloads to the cloud, they will look to partners to define the right cloud platforms and strategies, as well as solve the most pressing issues around cost management, security, sovereignty and hybrid IT integration.”


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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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