Industry Snapshot: Cloud’s Winning Proposition



Published23 April 2020at08:52, updated on10 October 2022at16:22

Industry Snapshot: Cloud’s Winning Proposition cover

Some businesses are thriving amid the global turmoil caused by the spread of COVID-19. Whereas whole economic sectors are falling victim to the effects of a quarantined population and the fall in demand, others find themselves in a privileged position to face this once-in-a-century crisis. This competitive advantage is particularly noticeable in areas like technology.

U.S. oil prices have turned negative for the first time in history. Traditional retailers are struggling to stay afloat, drastically cutting down expected profits for the second half of the year while delivering disappointing first-quarter results. At the same time, online retail moguls like Amazon’s Jeff Bezos have seen their net worth skyrocket since the lockdown began.

With the surge in remote work and internet traffic, businesses need IT now more than ever. Videoconferencing services and other collaboration tools are booming, while the rise in digital operations has multiplied the number of cyber threats and accentuated the cybersecurity skills shortage.

But that’s not all.

Facing a new reality

Many organisations were not ready for the sudden shift to digital and decentralised ways of working. For some, digital transformation went overnight from being a mid-term goal to a bare necessity. They were either relying too much on on-premise storage and computing, or perhaps they were simply not ready to have most of their employees working from home at the same time. This change in demand has propelled cloud services forward, with more and more clients signing up for access to IaaS and PaaS solutions.

The big winners

There are no clearer signs of the cloud’s buoyant momentum that the good results the top industry players have achieved during the first quarter. Even if overall company performance is not as strong.

IBM has seen the pandemic thwart what otherwise would have been a solid quarter of growth. However, the company claims hybrid cloud adoption has spiked as a direct result of the pandemic. IBM’s (and by extension Red Hat’s) platform and containerization offerings allow companies to quickly deploy and easily escalate business-critical applications – a major advantage in today’s everchanging situation.

German ERP powerhouse SAP has also managed to maintain strong cloud bookings. The company even managed to increase overall revenue. SAP S/4HANA gained an additional 300 customers in Q1, bringing the total up to 14,100 accounts. That’s a 23% increase from the same time last year. The results further demonstrate S/4HANA’s growing momentum and as the deadline to migrate to the newer ERP system approaches.

Additionally, and in what is another tell-tale sign of the health of the industry, Alibaba announced it will be investing $28 billion to expand its cloud infrastructure and semiconductor business. That’s over half of its revenue for the past fiscal year.  

Cloud providers and their customers are betting big on the cloud’s potential to protect company operations and speed up the recovery process once the crisis is over.

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