Cloud Spending Hits Record Amid Economic Fallout From Covid-19
04 Agosto 2020 - 1:19AM
Dow Jones News
By Angus Loten
Spending on cloud services is surging, as companies shift more
business applications online to cope with extended Covid-19
lockdowns, social distancing and other restrictions.
Companies world-wide spent a record $34.6 billion on cloud
services in the second quarter, up roughly 11% from the previous
quarter and 30% from the same period last year, according to
research firm Canalys.
Led by Amazon.com Inc.'s Amazon Web Services and Microsoft
Corp.'s Azure cloud unit, the spending gains were fueled by soaring
corporate demand for cloud-based collaboration and remote working
tools, e-commerce, remote learning, and content streaming, the firm
said.
Jones Lang LaSalle Inc., one of the world's largest commercial
real estate services firms, said it shifted roughly 90% of its
employees to remote work when the coronavirus struck, representing
about 90,000 workers.
The company, known as JLL, had been expanding its use of cloud
services in recent years, as it shut down costly in-house data
centers and increased adoption of cloud-based collaboration and
productivity tools, said Yishai Lerner, co-CEO of JLL Technologies,
a division of the company that oversees enterprise information
technology.
"When the world moved to remote work at the start of the
pandemic, this cloud investment really paid off," Mr. Yishai said.
"We plan to continue investing in cloud," he added, citing benefits
such as faster time-to-market for new real estate technology tools,
flexibility and lower costs.
Across all sectors, strong spending on cloud services comes amid
the economic fallout sparked by the crisis, which saw the pace of
U.S. annual growth decline by a seasonally adjusted rate of 32.9%
in the second quarter -- the sharpest decline in more than 70 years
of record-keeping, the Commerce Department reported last week.
"Organizations that had applications running in on-premises
environments were compelled to move them to the cloud, because if
people couldn't get to work, that data center was useless," said
Sid Nagy, a vice president at IT consulting firm Gartner Inc.
Cloud-service providers essentially rent computer capacity and
business applications to companies online on an as-needed basis,
often charged through a negotiated subscription rate.
Mr. Nagy said cloud services enable chief information officers
to spend less cash upfront, rather than scaling up on-premises
data-center capability or acquiring traditional licensed
software.
Matthew Ball, a chief analyst at Canalys, said cloud services
that have supported emergency business-continuity efforts will
prove equally important when businesses reopen, by underpinning
workplace safety tools, such as occupancy monitoring and contract
tracing.
A June report by technology-research firm International Data
Corp. estimated that more than two thirds of global organizations
in every industry are using cloud-based systems or applications in
some form, including high adoption rates in manufacturing, health
care and financial services.
"Companies already living in the cloud are doubling down, while
those late to the game are eagerly trying to catch up, to both save
their business and remain competitive," said Erik Newmark, program
vice president at International Data Corp.
Mr. Newmark, who oversees the firm's coverage of
Software-as-a-Service, enterprise apps, industry cloud and digital
commerce, said companies with a head start in deploying cloud
systems are proving to be much more resilient in weathering the
crisis, compared with slower adopters.
"Growing demand for cloud services has followed suit," he
said.
Write to Angus Loten at angus.loten@wsj.com
(END) Dow Jones Newswires
August 03, 2020 19:04 ET (23:04 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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