Channel playing 'increasingly important' role in cloud adoption - Canalys
Cloud infrastructure services spend grew to $142bn in 2020
The channel helped fuel a 33 per cent increase in cloud spend in 2020, according to new data from Canalys.
Cloud infrastructure services spend hit $142bn last year, up from $107bn in 2019. This was attributed to the higher-than-expected demand generated by global lockdown restrictions and the gradual recovery in economic confidence that propelled organisations' digital transformation.
Public cloud providers are also investing more in their channel partners in order to maintain these high demand rates, the analyst firm stated, adding that demand for cloud services remained strong across all enterprise segments, even industries that have been hit hard by the pandemic, such as retail and manufacturing.
"The rate of digitalisation, led by cloud, is gathering pace. Companies are now more confident about releasing budgets for business transformation," explained Blake Murray, research analyst at Canalys.
"Large projects that were postponed earlier in the year are being re-prioritized, led by application modernisation, SAP migrations and workplace transformation. Healthcare, financial services and pharmaceuticals are among the industries leading the way, but even those under most pressure are diverting investments to cloud, opening up new revenue streams and diversifying business models."
Cloud spend in the fourth quarter of 2020 grew 32 per cent quarter-on-quarter to $39.9bn, which was nearly $10bn more that the equivalent period in 2019.
Amazon Web Services (AWS) was the leading hyperscaler in the fourth quarter, taking up 31 per cent of cloud spend, noted Canalys, adding that it is investing deeper in its partner ecosystem, including greater support for ISVs, launching new partner competencies and expanding into distribution to boost SMB adoption.
Microsoft took up 20 per cent of the cloud spend in the fourth quarter, seeing demand for Teams, Windows Virtual Desktop and Azure services surge as lockdowns tightened in the last three months of 2020.
Google Cloud and Alibaba Cloud respectively rounded up the top four cloud providers in the quarter.
Canalys noted that this increased investment from the hyperscalers is reflective of the "increasingly important" role the channel is playing in driving cloud adoption.
"Organisations are turning to trusted business partners to advise, implement, support and manage their cloud journeys, and articulate the real business value of cloud migration," said Alastair Edwards, chief analyst at Canalys.
"Customer digital transformation projects are highly complex, requiring advanced consulting skills, combining deep technical skills with vertical expertise, which the cloud service providers are relying on partners to provide at scale.
"They are also turning to their partners to drive cloud consumption, and deliver full customer lifecycle support. As organizations start to consider moving more mission-critical workloads to the cloud, they will look to partners to define the right cloud platforms and strategies, as well as solve the most pressing issues around cost management, security, sovereignty and hybrid IT integration."