Companies

Global cloud services market grew 35% reaching $42 billion in Q1 2021: Report

Our Bureau Mumbai | Updated on May 03, 2021

Among the key players, Amazon Web Services topped the list in Q1 2021

Cloud infrastructure services spending grew 35 per cent globally to $41.8 billion in the first quarter of 2021, according to Canalys data.

“The trend of using cloud services for data analytics and machine learning, data centre consolidation, application migration, cloud-native development and service delivery continued at pace,” Canalys said in an official release.

Overall, customer spending exceeded $40 billion a quarter for the first time in Q1, with total expenditure increasing by nearly $11 billion as compared to Q1 2020 and nearly$2 billion compared to Q4 2020, as per the report.

“Cloud emerged as a winner across all sectors over the last year, basically since the start of the Covid-19 pandemic and the implementation of lockdowns. Organisations depended on digital services and being online to maintain operations and adapt to the unfolding situation,” said Canalys Research Analyst Blake Murray.

“Though 2020 saw large-scale cloud infrastructure spending, most enterprise workloads have not yet transitioned to the cloud. Migration and cloud spend will continue as customer confidence rises during 2021. Large projects that were postponed last year will resurface, while new use cases will expand the addressable market.” Investment at the edge, including 5G, is a key area, especially for the development of ultra-low latency applications and use cases, such as autonomous vehicles, industrial robotics and augmented or virtual reality,” added Murray.

Leading cloud service providers

Among the key players, Amazon Web Services (AWS) topped the list in Q1 2021, with a 32 per cent share of the total spend. The service provider witnessed 32 per cent growth during the quarter.

“In the last quarter it announced new CloudFront edge locations in Croatia and Indonesia and extended its Wavelength Zones for 5G networks to Japan and across the United States. It launched its new EX2 X2gd instances based on the AWS-designed Graviton2 CPU for memory-intensive workloads and improved price-performance,” Canalys said.

Microsoft Azure witnessed a 50 per cent growth for the third consecutive quarter, accounting for 19 per cent of the market share in Q1 2021.

Google Cloud grew 56 per cent in the quarter to account for a 7 per cent market share. It continued to gain momentum, benefiting from its Google One approach “driving cross-sell and integration opportunities across its portfolio,” as per Canalys.

Competition among the leading cloud service providers to capitalise on new opportunities will continue to intensify, as per the report.

“Geographic expansion for data sovereignty and to improve latency, either via full-region deployment or a local city point of presence, is one area of focus for the cloud service providers,” said Canalys Chief Analyst Matthew Ball.

“But differentiation through custom hardware development for optimized compute instances, industry-specific clouds, hybrid-IT management, analytics, databases and AI-driven services is increasing. But it is not just a contest between the cloud service providers, but also a race with the on-premises infrastructure vendors, such as Dell Technologies, HPE and Lenovo, which have established competitive as-a-service offerings. The challenge will be demonstrating a differentiated value proposition for each,” added Ball.

Published on May 03, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.