Indeed, the pandemic has accelerated the growth of the cloud computing market. During the Covid-19 pandemic, many corporates shifted their investments toward cloud computing. Against this backdrop, within a few months into the pandemic in 2020, companies involved in offering cloud computing services were able to generate two years’ worth of revenue in just two months, as quoted by Satya Nadella, CEO of Microsoft.
And some companies even reported seven years of growth in revenue during the pandemic. With the pandemic showing a way to run the business even remotely through implementing the right cloud computing technology. Many companies unquestionably turned towards this technology for thriving, opening avenues for the new era of digitalization. This acceleration was quoted as “The Great Acceleration” by McKinsey & Company.
During this acceleration period, the benefits of cloud computing, especially for digital businesses, were at the forefront, enabling market growth. Against this backdrop, let us examine the following reasons for spurring the market growth. Furthermore, as of 2022, only 15% of data was assigned on the cloud from various enterprises, needing 85% to upload. With much room left out, the market is expected to witness continuous growth in the imminent future, with several businesses adopting cloud technologies across various business processes.
Cloud Computing Technologies have Witnessed Unprecedented Growth during the Past Few Years due to the Following Factors.
Socio-economic Realities
In short, the best explanation would be that during the pandemic, several governments across the globe-imposed restrictions to cut all physical interactions. To minimize physical contact between individuals. The answer is broken down into several pieces to understand the business implications of this sudden societal change.
Implementation of Strict Lockdowns
As the reports emerged, they identified around 100 nations across the globe imposing either partial or complete lockdowns. In response to the outbreak of the COVID-19 pandemic as of March 2020. In addition, some economic giants in Europe, such as Italy, Germany, and France, have nationalized lockdowns. However, this was earlier to the breakdown of the second wave, which was deadlier than the earlier one. As a result, businesses shut down overnight, fracturing the old computing technique as the continuous operation of on-premise servers was almost impossible.
Furthermore, with the non-availability of technicians, there was difficulty in maintaining the servers, making organizations vulnerable to severe security challenges. At one point, businesses were exposed to vulnerable breaches due to the non-availability of engineering staff responsible for maintaining those servers. Also, the cost of maintaining that available handful of engineers was very high. Under these circumstances, several organizations were forced to ditch the old and traditional technique, on-premises servers, for cloud computing technologies. During the initial days of the lockdown, some companies, such as Moderna and Zoom, proved to the business world the power of artificial intelligence and data.
Resilience in Business Operations
With the hindering of economic activities during the lockdown, there was a direct impact on several business operations. As a result, businesses had no choice but to minimize costs to stay ahead of the competition. While some took the aggressive path of laying off employees, some took a constructive path of implementing cloud technologies to stay ahead of the competition and reduce costs.
The Emergence of ‘E-Business Model, a new one
Here emergence of the ‘E’ model implies the rise of business models such as E-commerce (though this model existed before the pandemic, the pitch was conspicuous, especially during the pandemic); E-learning, E-food ordering, E-health, E-entertainment, and E-education.
With the spearheading of all these E-based sectors, the amount of data generated increased. Requiring higher quantities of containers for collecting and storing the data.
Remote Work
Though the pandemic has subsided, remote working may remain a significant trend through 2023 and beyond. Therefore, the hybridized and remote workforce must continue to augment abilities in all such situations. For instance, amidst the pandemic outbreak, the Zoom app witnessed a heavy rush, with thousands of users signing up in a single night.
While the lockdown struck, powered by the cloud-enabled agility, several businesses, mainly running digitally, could switch to remote working culture. Thus, companies maintained or increased productivity using cloud computing technology.
With cloud computing technologies having proven business performance, we will go through the list of benefits associated with this technology.
Cloud Proved to Be Saviour of Businesses, Particularly to Tide Over Tough Business Situations
During the pandemic, with increased demand for certain products and services, there was a need for companies to deliver them quickly. This type of demand was more pronounced across the healthcare industry. During such times, AI proved to be a boon for companies. Particularly, in displaying incredible agility to respond to the unexpected demand posed by the pandemic.
For instance, some examples include Moderna, which produced and delivered Covid-19 vaccines. It took only 45 days for the company to complete the Phase I trial of its covid-19 vaccine or drug. The company was able to fulfill the unachievable target due to the adoption of AI and cloud computing in the drug manufacturing process.
In the same manner, Frito-Lay introduced an e-commerce platform, a direct-to-consumer, ‘Snacks.com,’ within a timeline of one month.
Increased Opportunities for Businesses
Businesses, including startups and established enterprises, witnessed tremendous opportunities with the introduction of cloud computing technologies into their process. Although, the type of opportunities varied for different-sized companies. While startups could bank on the advantages of a data-driven approach utilizing the cloud, established companies stayed in the competition leading from the front. They also had an opportunity to quickly iterate any product while identifying avenues to implement high-potential business models from the existing ones.
Enabled Better Transition towards the Remote Work
Before the pandemic outbreak, there was a puzzle in implementing the remote work culture due to a need for more awareness about cloud computing technology. However, with improved understanding, several companies started implementing this technology to tide over untoward incidences during the pandemic. During such time, cloud computing came as a boon in filling the technological gap while executing the ‘work from anywhere culture’ prevalent during the pandemic.
In particular, Zoom witnessed a higher number of users running into thousands each night signing in to the app as people were getting more detached due to the closure of all physical office spaces. During such time, Zoom helped companies connect teams while enhancing employee satisfaction and increasing collaboration with the ecosystem and among team members. All these helped in improving employee engagement as well.
To Improve Customer Experiences
In September 2021, Wells Fargo partnered with Microsoft and Google to empower and transform the digital business. Using AI-powered tools, Wells Fargo aimed to enhance its digital transformation. The company also tried to achieve enhanced customer experience and increase employee collaboration in parallel. Also, it seeks to drive a personalized experience for its customers and clients by adapting complicated AI & Data solutions into the business process.
Along the same lines, Verizon signed a partnership agreement with Microsoft to deliver cloud solutions by building it on their current platform. Taking advantage of the 5G capabilities of Verizon, through the partnership, they aim to offer their customers a wide range of offerings. Those capabilities include higher security levels, increased efficiency, and higher bandwidth. Along with low lag for applications that involve machine learning, augmented and virtual reality, and computer vision.
Enhanced Efficiency and Standardization
Currently, artificial intelligence is increasingly finding use across various companies to accomplish multiple tasks that were thought to be highly difficult earlier. By integrating machine learning with AI, companies are training machines to perform various tasks, especially repetitive work, multiple times without any hitch.
This kind of implementation allows companies to attain standardization at higher levels while minimizing or erasing possible errors. Moreover, by implementing AI into the process, companies can achieve efficiency to unthinkable levels, particularly in performing tasks requiring repetitive actions with no mistakes each time.
To Accelerate the Innovative Cycle
With cloud technologies enabling companies to speed up things tremendously, the innovation cycle reached another level in speed, giving birth to entirely new revenue streams. Also, before deploying the new product at full scale on a hybrid cloud, companies are given a chance to test the latest product and service on a public cloud platform. At the same time, it is allowing companies to transform the innovation process at unimaginable speed.
Minimization of Hardware Costs
The cost of operating the business through cloud computing technology is comparatively much lower than the hardware devices. Also, companies can implement cloud computing technologies without the need for initial investment. As a result, the amount incurred on the fixed cost can be brought down to a minimal level. For instance, to implement cloud computing technology, there is no need for companies to maintain data centers and computer clusters. With this advantage, several companies thrived through the pandemic despite minimal resources.
Though many advantages are associated with cloud computing technologies, several companies need to catch up in adopting this technology due to some barriers. Unfortunately, these reasons may prove to be the barriers to implementing this technology soon.
To Attain Environment Sustainability
Another reason companies are ready to adopt cloud technologies into their process is to pledge support for environmental sustainability. With many companies showing increasing interest in attaining sustainability, the adoption of cloud technologies is expected to increase shortly.
As a Service
Organizations can use cloud technologies in several ways, especially ‘as a service model,’ considered one of the most accessible entry points. With cloud technology as a service offering various advantages, including flexibility and ease along with a choice of applications, employment of this cloud technology can undoubtedly impact the organization in terms of its goals. Moreover, companies can widen their service offerings and develop applications faster by enabling cloud computing services. This feature helps companies stay ahead of the competition as they can keep pace with customer demand.
Remarkably, after the pandemic, the market witnessed tremendous growth across the ‘as a service offering, and a few new applications emerged. Such new applications are expected to expand in the near future, with businesses increasingly transforming from physical to hybrid work environments, which was more conspicuous after the pandemic outbreak.
Some of the Existing Barriers Slowing Down the Momentum
Perceived Security Challenges
About 67% of software professionals consider security is the major challenge associated with cloud adoption. However, public cloud service providers invest more heavily in security than any other private company or government organization. As a result, moving towards the cloud will not decrease the security but rather increase it. For instance, Microsoft, which is involved in offering the Azure cloud platform, spends around $1 billion yearly on cybersecurity. Similarly, Google and Amazon invest heavily to ensure security for their product offerings, including corporate and personal data.
Considering this, it can be best observed that the security challenge is just a perception rather than a reality. Hence, overcoming this challenge is less about the security infrastructure.
Vendor-Based Cost Considerations
The cost incurred in implementing cloud technologies varies depending on the provider. Hence, companies should be cautious when choosing a cloud provider, with reports emerging that there are chances of uncompetitive cloud providers creating nightmares. But in general, there will be a reduction in the cost incurred on cloud computing by 50% every 18 months. So, with the cost halving every 18 months, companies should choose a cloud provider that charges similarly. Or else, there will be the chance for companies to turn the cloud adapting process into a nightmare. Though the upfront cost associated with adopting a cloud strategy seems higher, the real value depends on the returns from the investments.
The Lack of Skilled Talent
The construction of a cloud strategy demands highly skilled professionals perform various functionalities across different capabilities. Some of the combinations would be like combining technical knowledge with business experience.
