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Remote working drove a massive increase in cloud spend last year

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(Image credit: Shutterstock / vs148)

When the pandemic drove the global economy into the ground, businesses turned to cloud infrastructure for salvation. As the economy is slowly pieced back together, companies are investing even more in cloud.

This is the conclusion of the latest report from analyst firm Canalys, which provides an analysis of the global cloud market for Q4 2020.

In the final quarter of last year, cloud infrastructure services spending rose by almost a third (32 percent) compared to Q3,  reaching $39.9 billion. Year-on-year, on the other hand, spending rose by almost $10 billion.

In dollar terms, Canalys claims, this is the largest ever quarterly expansion for the cloud industry, fuelled by the effects of the pandemic.

Total cloud infrastructure services spending grew by exactly a third (33 percent) for the entirety of 2020, rising from $107bn in 2019, to $142bn in 2020. The report says demand was “higher than expected”, despite an initial slowdown in large consultative projects.

The so-called "Big Three" benefitted greatly from the pandemic and the demand for cloud. Amazon Web Services accounted for 31 percent of total spend, while Microsoft Azure grew its market share by 50 percent. Google Cloud reported a 58 percent growth for the fourth quarter of the year and holds a seven percent market share.

“The rate of digitalization, led by cloud, is gathering pace. Companies are now more confident about releasing budgets for business transformation,” said Canalys Research Analyst Blake Murray.

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