A confluence of existing factors driving cloud transition has been further accelerated by the COVID-19 crisis. As a result, cloud spending rose another 33% year on year to $32.8 billion during the third quarter of 2020.

Enterprise spending on cloud infrastructure services (including IaaS, PaaS and hosted private cloud services) has maintained momentum since the previous quarter, which saw 32 percent growth in cloud adoption.

New data from Synergy Research revealed that public IaaS and PaaS services continued to account for the bulk of the spending, growing by 35 percent in Q3, with the top five public cloud providers consolidating their dominance to control almost 80 percent of the market. 

This trend is likely to persist, as the exodus to remote work underscores the urgency for scalable, secure, reliable, cost-effective off-premises technology services. In fact, despite the inevitable economic downturn in the wake of the pandemic, cloud spending is estimated to continue rising for the full year and into 2021.

In these trying economic times, businesses have an increased focus on improving the bottom line, and switching to cloud services solutions is one way to accomplish that goal. By switching to a subscription-based cloud services model, companies are able to spend less cash upfront when compared to costs of setting up on-premises capabilities.

The report said the cloud market was positively impacted by COVID-19 and expanded strongly in all regions of the world. Amazon maintained its grip on the sector, remaining at 33 percent of the worldwide market, followed by Microsoft on 18 percent. Google, Alibaba and IBM rounded out the top five with shares of 9 percent, 5 percent and 5 percent respectively, followed by Salesforce (3%), Tencent (2%), Oracle (2%), NTT (1%) and SAP (1%). 

“While we were fully expecting continued strong growth in the market, the scale of the growth in Q3 was a little surprising. Total revenues were up by $2.5 billion from the previous quarter causing the year-on-year growth rate to nudge upwards, which is unusual for such a large market. It is quite clear that COVID-19 has provided an added boost to a market that was already developing rapidly,” said John Dinsdale, a Chief Analyst at Synergy Research Group.

“Meanwhile, the companies competing for a share of the market have settled into three camps. Amazon and Microsoft are in a league of their own, while others are either aggressively seeking to grow their position in the market or are more focused on specific services, geographies or customer groupings.”

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