New report illustrates cloud as a technology and a domain will continue to grow through COVID-19
2020 has been an extraordinary year, redefining ‘normal life’ and, following significant growth in cloud consumption across many vertical sectors in 2019, the report highlights a shift in consumption across some industries this year due to COVID-19.
However, while for some industries growth has retracted, a push towards digital and working from home has resulted in sectors including tech, media and telecoms seeing an increase in cloud consumption, with consistent QOQ growth through the first half of 2020.
Looking at trends across vertical sectors, while COVID-19 led to an increase in the adoption of cloud services among the tech, media and telecoms industries, manufacturing and retail saw a drop of over 40% for cloud usage in the first quarter of 2020. However, these sectors did experience growth on cloud spending at a searing pace in 2019, with a 363% increase in the third quarter of 2019. In the health sector, the report shows that cloud consumption has been volatile, highlighting the elasticity of cloud technology in turbulent times. For financial services, spend hit a low in the early part of 2020, but quickly bounced back with growth as high as 34% for the month of April.
Regarding cloud consumption by services, compute continues to represent the largest service spend across all segments. Seventy percent of cloud spend comes from IaaS consisting of compute, network and storage. Another observation from the report showed that enterprise customers are spending the most on analytics and emerging services, with the majority of that spend in Azure.
The COVID-19 effect on cloud spending in the technology sector saw spending trends continue to enjoy unabated growth, along with media and telecoms, in 2020. The growth rates were calculated as 135% in the last quarter of 2019, and compared to the second quarter of the year, 56% growth was achieved. It was also observed that a 29% growth was achieved between the months of February 2020 and May 2020. After the last few years of growth, in 2019, cloud spending in financial services is defined as stable, but after the emergence of the COVID-19 pandemic, a period of uncertainty occurred and it affected all months in 2020. Because of COVID-19, cloud usage in finance services dropped by 10% in February 2020, but in April we observed a positive growth of 34%.
“In times of crisis, the value in adopting cloud technologies is evident,” stated Tarık Ertuğrul, Senior Country Sales Manager, Nutanix. “As this report shows, while the ever-changing landscape of 2020 was always likely to cause uncertainty in cloud spending, it is very encouraging to see growth and stability across a number of sectors and we expect this resilience to continue.”
Additional findings include:
- Relational DBaaS on cloud is accelerating: Relational databases as a service is showing accelerated adoption and becoming a top used service across AWS and Azure.
- Cloud maturity: Most customers are using more than 15 cloud services as part of their cloud consumption strategy, reflecting high maturity and adoption of cloud.
- Cloud cost savings actions: Rightsizing and eliminating unused resources can save 10%-15% of spend.
The Nutanix cloud usage report is based on analysis of customer cloud spend data for the year 2019 and 2020 and is only representative of customers that used Xi Beam, a multi-cloud cost governance service by Nutanix, to manage their cloud infrastructure. The data in this report may not be representative of the cloud usage of non-Beam customers.
To read more about the findings, you can access the full report here.