COVID-19 Is Driving a Cloud Computing Surge That Will Only Continue | Opinion

Tech companies are booming. In earnings reports from the end of July, Amazon, Apple, Alphabet and Microsoft all beat expectations and posted rising revenues in a variety of their different products and services. Amazon had the most impressive showing, with an explosive $10.30 per share against the $1.50 predicted by analysts. The COVID-19 pandemic is reshaping every industry on the planet, and for Big Tech, that appears to be a positive for profit.

One of the fastest-growing services many of these companies offer is enterprise cloud computing, and coronavirus restrictions may be pushing demand for these products even higher. Overall revenue for the top cloud platforms is through the roof over the last two quarters in 2020. Amazon Web Services, the leading cloud computing provider in the world, saw 33 percent and 29 percent growth in their first and second earnings reports of 2020. Microsoft Azure and Google Cloud had even greater increases of around 50 percent each quarter.

The increase in cloud revenue for Big Tech is an amplification of a decade-long trend. Companies are spending more on outsourcing their computing needs, and in the last 10 years, enterprise spending on cloud services have increased by over 8,500 percent, going from $1.1 billion in 2009 to $96.4 billion in 2019. Overall spending on cloud storage and IT infrastructure is quickly replacing non-cloud solutions in the form of physical servers and computers owned by a company.

Corporate Cloud Spending

COVID-19 is proving to be the ultimate test for cloud providers and business cloud users. Employees from companies across many industries are now spread throughout the world due to office closures and restrictions, and remote work is expected to be on par with normal productivity. So far, cloud computing is meeting the challenge and giving companies easy-to-access storage, tools, IT and other services now almost essential for a modern business.

Cloud computing for businesses can be broken down into three main services: infrastructure (IaaS), software (SaaS) and platform (PaaS). Salesforce, a company founded with cloud enterprise services at the core of its business, specializes in SaaS by providing software and productivity tools over the cloud. Slack has a similar business model, housing its software and productivity tools on their servers for users to access anywhere. IaaS is another popular form of cloud computing, where companies like Amazon, Microsoft, Google and IBM own and manage servers for clients to use primarily for storage and complex networking. This is the most common solution for companies looking to save on costs associated with buying and maintaining their own servers and networking on a broad scale. PaaS is a step up from IaaS, giving clients access to complete hardware over the cloud to use on intensive projects like application development. From a broad perspective, large, expensive in-house hardware and software is replaced with similar specifications via the internet.

Cloud Computing Demand

Look for the dominant services (SaaS and IaaS) to continue charting new territory for businesses looking to further digitize and stabilize their presence online. Whether it's for more effective communication with employees, access to essential applications and storage databases, or to expand business from physical sources to digital, cloud computing will play a key role in reshaping businesses and industries during a long COVID-19 economic recovery.

Manuel Moerbach is president and CEO of Statista Inc.

The views expressed in this article are the writer's own.