Cloud Computing, or the ability to use software and data storage over the internet rather than on a local physical device, has greatly increased over the past several years, skyrocketed during the pandemic, and is predicted to continue growing into 2022. The increase in streaming, ecommerce, remote working and distance learning during the last year and a half has forced companies to change the way they do business in order to account for new consumer behavior. “Cloud computing” or “cloud services” can refer to several different types of services ranging from basic cloud infrastructure, to specific programs and operating systems, to cloud data protection and other remote storage services.
Today: Cloud spending increased by 12.5% in Q1 0f 2021
According to market intelligence firm International Data Corporation, cloud spending increased to a record of $15.1 billion in Q1 of 2021, a 12.5% year-over-year increase, and is expected to grow to $74.3 billion for all of 2021 (there was a decrease for the first time in six quarters in Q2 of 2021, however end of year expectations have not significantly changed). Meanwhile, non-cloud spending continues to decline, another sign of the digital transformation that businesses are undergoing today.
According to Canalys, the U.S. is the largest consumer of cloud services with 44% of worldwide spending, with China in second place at 15%. The three leading cloud infrastructure providers in terms of market share are Amazon (32%), Google (8%), and Microsoft (21%), who’s Azure cloud services grew 50% in Q1 of 2021, with a 22% increase in revenues. Riding the success of Azure, Microsoft has topped analyst estimates for 11 straight quarters.
Beyond: Service Specialization and Government Regulation
What lies ahead for the cloud? Analysts predict over $482 billion in global cloud spending in 2022 (there was approx. $313 billion in global cloud spending in 2020), and an increase in specialization and industry specific cloud services that can help cloud providers differentiate their place in the market. Additionally, as countries legislate and implement various privacy and other regulations, cloud providers will have to adapt or risk limiting their market share.