Cloud Computing Outlook 2021: Why 2020 will be marked as the golden age of cloud computing

Why 2020 will be marked as the golden age of cloud computing

Eleven months ago, when technology enthusiasts did some crystal gazing, the world of the cloud computing market was on standard growth trajectory  . Things were going well– enterprises were investing on cloud technologies, more workloads were moving to cloud and a few conventional industries were opening up to the inevitability of cloud. Nonetheless, there was nothing extraordinary –till COVID-19 happened.

In many ways, the global pandemic has been a watershed moment for the technology industry. Technology and tech leaders were pushed right into the middle of action, where workforce distribution models were enabled, digital agendas were accelerated and some of the biggest shifts were facilitated almost overnight.

The role of cloud computing has never been more important in this context. According to Gartner research, cloud system infrastructure services spending is expected to grow from $44 billion in 2019 to $63 billion in 2020, to $81 billion by 2022—marking a solid exceptional growth.

“The proportion of IT spending that is being allocated to cloud will accelerate even further in the aftermath of the COVID-19 crisis”, said Ed Anderson, Distinguished VP Analyst, Gartner.

Digital emerges as the biggest cloud catalyst

A recent survey conducted by Mckinsey brings out some surprising numbers. A large majority of the companies that took part in the survey said that they have accelerated the digitization of their customers, supply-chain interactions and their internal operations by three to four years, while the share of their digital or digitally enabled products has accelerated by seven years! This is a clear indication of how dramatically the pre-crisis pace of change has been disrupted in a matter of few months.

Digital has been at the core of global disruption that industries are undergoing. If we analyse progress in the last 6 to 10 months, the global pandemic compelled two biggest paradigm shifts in the way enterprises operated—one, the massive shift to work from home models and the second, the rapid adoption of digital channels and digital customer engagement models. Both these changes required technology leaders to rapidly acquire digital skills at organizational level.

In many ways, right from the nimble organizations to some of the most conventional firms, the need to leverage cloud to stay agile, flexible and scalable came through far more clearly at this stage. To embrace digital, it was imperative to embrace cloud as the foundational platform.

Reorienting to the new normal with cloud

Last few months have been a great learning experience for business and technology leaders. Well past the initial ‘response’ phase, organizations now need to plan and prepare for recovery and subsequently for business growth. Technology leaders’ new mandate include building new capabilities that will help their organizations thrive beyond the crisis. They must also reduce costs significantly while at it. This balancing act, as a CIO catapults into a highly strategic role, requires them to look at a more stable, reliable and secure platform like cloud.

Cloud is thus very much at the center of organizations’ rebound strategies. Organizations that are higher up in the cloud adoption curve have already experienced the benefits of the platform while the pandemic necessitated radical changes. These organizations are directing their IT investments further towards cloud to protect and grow revenues in the new normal.

At the same time, some organizations were literally ‘forced’ into adopting cloud models during the pandemic to stay afloat. Having seen how lack of an agile cloud platform can put a spoke in the wheel during adversities, these organizations are now heavily focusing on cloud. Both these categories of organizations are driving cloud investments in unprecedented ways in 2020 and well into 2021.

Is Cloud Computing Adoption and Investment a fad?

Cynics are warning us that the spike in cloud investment is owing to the sudden shift to WFH and that it might fizzle out eventually. But the fact is, many of the COVID-induced shifts are rather permanent in nature—be it WFH, remote learning, or digital.

The market realities in the next normal is likely a far cry from what businesses are so far accustomed to. There is, in all possibility, no return to the old normal. In the new world order, organizations must develop capabilities that help them respond to the unknown and embrace change with agility. 2020 has taught us that being ‘Cloud-first’ or ‘Cloud-smart’ is a prerequisite, and not really a choice.