Cloud computing has been increasingly adopted by startups and large companies alike over the last decade. The business of renting computing power has transformed into an enormous industry with Amazon and Microsoft leading the way. Now, in the time of the coronavirus pandemic and with fears of a recession looming, cloud services may repeat the pattern of growth it experienced last time a recession hit. In addition to the adoption of the cloud, the shift to working from home has also given cloud-based services/applications a significant boost.
How Remote Working Has Helped Cloud Computing
Working from home in the wake of the pandemic has highlighted the benefits of using cloud computing, with companies increasingly adopting it. During this time, there has been an unexpected spike in cloud usage, and cloud computing has made it less expensive and more comfortable for companies to manage their internet infrastructures and make an adjustment to computing needs on the go.
Companies like Microsoft, Amazon and Google – which are the three major players when it comes to cloud computing platforms – may be benefiting from the recent shift to work from home across the globe. They have been offering deep discounts to their clients. These companies have also been discounting their services, whereby they offer underlying infrastructure on rent to corporate networks. Microsoft, for example, has been pushing its messaging and collaboration tool Microsoft Teams, which is a direct competitor to Slack. Last month Microsoft said that the number of users on the tool has increased by 37%, with at least 900 million meetings and call minutes every day.
How Cloud Will Prevail With The Oncoming Recession
Amid fears of a global recession, one of the spaces that could be able to weather it is cloud computing. During the last downturn, cloud computing was still a new technology, but it managed to hold its ground. Cloud services companies offer customers the option of renting remote computing power, and scaling up and down usage as needed. In practice, many businesses rarely scale down on cloud usage to not constrict capacity.
However, going forward, cloud-dependent businesses are likely to take measures to cut costs. This might look like a loss to the cloud computing sector, but it is actually not. While customer-facing applications fluctuate (scale up and down) with demand and projects are put on hold, other cloud applications, which are more towards the business’ basic operations side, will not change much. Hence the cloud services will not be adversely affected. The extensive usage of cloud by companies will allow it to grow during this time. When recession hit the world last time, cloud services were used by many organizations, but this was only for a few applications, or for small teams within larger organizations. Now, with everything seemingly working on the cloud, losing a small chunk of services will not make any difference as other cloud-based software will see increased usage.
When talking about cloud-based software, we also have to take into account the cloud-based applications for telecommuting and entertainment. With people maintaining social distance and being in self-quarantine, services like Netflix and Zoom have seen increased usage, even though applications like Netflix are distributed through private content delivery networks.
The one area where cloud can take a hit is spending on hardware, as the supply chain is already experiencing a hit, especially semiconductor production where Wuhan holds massive production.
