Some 1Q20 COVID-19 tailwinds for cloud infrastructure services: Synergy Research

May 1, 2020

There is what Synergy Research called “anecdotal evidence” that the need to support employees working from home may have improved the quarter’s performance.

Stephen Hardy

Cloud infrastructure services spending continued to rise in the first quarter of this year despite (or, perhaps, because of) the coronavirus pandemic.

Spending on cloud infrastructure services grew 37% year-on-year, to $29 billion, during the first quarter of 2020, says Synergy Research Group. The revenue jump was at the size expected, according to the market research firm, despite the COVID-19 virus spread reaching pandemic proportions during the quarter. In fact, there is what Synergy Research called “anecdotal evidence” that the need to support employees working from home may have improved the quarter’s performance.

“While COVID-19 is having a devastating impact on communities and economies around the world, indications are that it is having a mildly positive impact on the cloud infrastructure services market,” said John Dinsdale, a chief analyst at Synergy Research. “For sure the pandemic is causing some issues for cloud providers, but in uncertain times the public cloud is providing flexibility and a safe haven for enterprises that are struggling to maintain normal operations. Cloud provider revenues continue to grow at truly impressive rates, with AWS and Azure in aggregate now having an annual revenue run rate of well over $60 billion.”

Amazon Web Services was the quarter’s worldwide market share leader, with a 32% slice. Microsoft, meanwhile, saw growth in demand for its Azure services exceed that of the overall market by more than 20% during the quarter; its market share has increased by almost 3% over the last four quarters, reaching 18%, says Synergy Research. Google, Alibaba, and Tencent also are seeing overall market growth better than the industry average; each of the three saw revenues spike by 45% or more year-on-year in 1Q20. IBM, Salesforce, Oracle, and Rackspace have what Synergy Research terms “substantial market share” but are somewhat niche players in the market research firm’s estimation.

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About the Author

Stephen Hardy | Editorial Director and Associate Publisher, Lightwave

Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.

Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.

He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.

You can connect with Stephen on LinkedIn as well as Twitter.