Cloud Service Providers Experiencing Mixed Results Due to COVID-19

The impact of COVID-19 this year and next will cause off-premises cloud service providers (CSPs) to shift their priorities to help end users, customers and partners adapt to new norms.

The impact of COVID-19 this year and next will cause off-premises cloud service providers (CSPs) to shift their priorities to help end users, customers and partners adapt to new norms.

The COVID-19 pandemic is significantly affecting the business world, with impact felt from the data center compute, storage and networking markets all the way up to the applications running in the cloud, as reported by the Omdia Cloud & Colocation Services for IT Infrastructure & Applications Market Tracker.

“On one hand, data-center operators are experiencing massive surges in consumer usage of compute resources due to school closures, social distancing and government work-at-home mandates. This is making it increasingly imperative to provide a reliable, scalable and secure cloud,” said Devan Adams, principal analyst at Omdia. “The new rules for society have created new norms, resulting in increased demand for e-learning, remote working, binge television watching and other at-home activities. On the other hand, IT infrastructure services—i.e., IaaS, CaaS, PaaS—are experiencing equally negative effects as many small-and-medium businesses (SMBs) either temporarily shut down or prepare to close their doors permanently as they are unable to remain financially viable.”

Accounting for the two contradictory effects COVID-19 is having on the cloud services market, Omdia has forecast the impact of the pandemic on 2020 and 2021 cloud service revenue:

It should be noted that COVID-19 only has a partial impact on Omdia’s overall 2020–2021 forecast updates. Other important aspects have been factored as well, including prior 2019 actual results, new and updated cloud services, and data center footprint expansions.

Cloud service providers push their focus to the edge 

Edge service delivery is the latest trend in the cloud services market as businesses prioritize lower latency, higher bandwidth solutions that are closer to their end-users. Some of the most notable telco and enterprise use cases where edge services are deemed the most critical include IoT, 5G/ LTE, smart cities, retail shopping, surveillance and security and autonomous vehicles. To address the latest customer needs, communications service providers (CSPs) are upgrading their portfolios accordingly, including:

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