Cloud Market Immune To COVID-19: Synergy Research

The leaderboard didn’t change in Q2 as spending on cloud infrastructure and platform services surpassed $30 billion.


Recent quarterly earnings reports show a cloud market that is proving itself immune to COVID-19, according to an analysis by Synergy Research.

Second quarter spending on infrastructure and platform services blew past $30 billion, with the now familiar leaderboard, dominated by Amazon Web Services, remaining entirely intact, the market research firm tabulated after reviewing the latest financials.

While many industries are being devastated by the current pandemic, cloud is resilient because it’s helping organizations weather operational and financial challenges brought on by the crisis.

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“If anything, the pandemic has helped to highlight some of the main benefits of public cloud,” said John Dinsdale, Synergy’s chief analyst.

[Related: In Coronavirus Crisis, Public Cloud Computing Is ‘An Unsung Hero’]

Those benefits—flexibility, adaptability, speed, variable costs, enabling new ways of doing business, and avoiding onsite IT operations—are critical to enterprises looking to mitigate the disruptions caused by work-from-home orders, unpredictable demand and slashed capital budgets.

“As the pandemic bites and companies have to rapidly adapt and change, all of those benefits come into play even more,” Dinsdale told CRN.

Synergy’s last quarterly market evaluation found the pandemic was having “mildly positive impact” on cloud sales, and now the second quarter has borne out that trend.

The pace of growth slightly fell from the first quarter, from 37 percent in Q1 to 33 percent in Q2, but that’s only a reflection of the market’s scale.

“The growth rate percentage is now trending downwards, as it must for such a massive market, but in absolute dollar terms the incremental growth just keeps on getting bigger,” Dinsdale said in the report.

Q2 saw $30.5 billion in public and hosted private cloud spending—$7.5 billion more than the same quarter of the previous year. Over the trailing 12 months, the industry notched $111 billion in revenue.

The Big Three hyper-scalers remain far out ahead of the pack. AWS owns a third of the market, Microsoft maintained 18 percent share, and Google inched up a percentage point to 9 percent.

The rest of the pack also stayed in the same order: Alibaba, 6 percent; IBM, 5 percent; Salesforce, 3 percent; Tencent and Oracle each at 2 percent.

Together, the top eight companies own 77 percent market share.

Chinese providers are making a big mark on the industry. Alibaba, Tencent, Baidu and smaller rivals in that country combined to deliver 12 percent of global sales, Dinsdale also noted.

The Synergy analysis includes Infrastructure-as-a-Service, Platform-as-a-Service and hosted private clouds. Just breaking out the public cloud component of that mix shows the top five providers even more dominant, controlling 80 percent of the global market.

“As far as cloud market numbers go, it’s almost as if there were no COVID-19 pandemic raging around the world,” the Synergy report states.

Synergy expects growth to remain well above 30 percent this year.