latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/pandemic-drives-more-enterprise-to-the-cloud-data-centers-58893293 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Pandemic drives more enterprise to the cloud, data centers

Pandemic To Propel Rise Of Mobile Payments In India's $781B Point-Of-Sale Market

Belarus: Pay TV, Broadband Market Overview

Global Operators Expand Integrated Access To OTT Services

European And U.S. Children Are Growing Up On SVOD TV Programming

Pandemic drives more enterprise to the cloud, data centers

Technology companies looking to the cloud for a silver lining have found a market that is growing faster during the pandemic.

Companies including Intel Corp., Micron Technology Inc. and Advanced Micro Devices Inc. opted not to issue financial guidance for the next quarter or two, but they indicated in recent earnings reports that the data-center market will help guide them through the coming headwinds. Central to that outlook is the accelerating migration of more enterprise to the cloud.

The cloud market grew rapidly following the financial collapse of 2008, industry analysts note, and all signs point to a similar acceleration as the pandemic forces even more dependence on technology to support a homebound global workforce. Since that growth can only happen by adding or changing the equipment in the data centers that support cloud services, companies that sell chips, data-storage units, networking equipment and other data-center-class hardware are benefiting from the movement.

"The 2008 financial collapse was when the cloud got its big shot and why you see it growing so quickly now," said Carl Brooks, cloud transformation analyst at 451 Research, an offering of S&P Global Market Intelligence. "People are a little bit desperate, their priorities are a little changed from where they were before, and suddenly the money they'd save and new functions they'd have available on a public cloud platform sound good as long as they can decide which bits are going to go there."

After the 2008 crisis, cloud computing continued to expand and to segment into specialty markets that ultimately helped millions of employees when demand for work-from-home capacity recently surged due to the pandemic. Revenue for cloud infrastructure services grew to $29 billion during the first quarter of 2020, a 39% increase compared to 2019, according to an April 30 report from Synergy Research.

"In uncertain times, the public cloud is providing flexibility and a safe haven for enterprises that are struggling to maintain normal operations," said John Dinsdale, chief analyst at market research firm Synergy Research Group.

The ability of internet providers, cloud computing platform providers, and cloud services to scale to meet the surge of people working from home has encouraged more companies to do the same, accelerating expansion of cloud and data-center facilities aimed at consumers and telecommuters.

SNL Image

Fifty-seven percent of large companies are expanding their options with a hybrid cloud approach that includes the use of both on-premise data center and private-cloud facilities and off-premise services, according to surveys included in the 451 Research report "Voice of the Enterprise: Cloud, Hosting and Managed Services, Workloads and Key Projects 2019."

The migration to the cloud represents both a source of growth for the cloud-computing business and a reason to expand data-center capacity. That expansion is likely to continue to grow even after demand created by pandemic-related work-from-home arrangements slows, said Melanie Posey, a research vice president at 451 Research.

"That is an interesting inflection point in terms of how the enterprises are thinking about their infrastructure because there is certainly a movement toward more cloud-based services," said Angelique Medina, director of product marketing at the network monitoring company ThousandEyes Inc., which was recently acquired by Cisco. "Having functions like VPN and video conferencing in the cloud means not having to have the enterprise as a choke point be in on the company's network. You can add capacity very easily without having to add anything to the network," she said.

Intel, for example, in its recent earnings announcement flagged data-center networks as the platform that will encourage the growth of $300 billion in demand for new chips and components for internet of things devices, 5G devices and the small-scale "edge" data-processing facilities that will support intelligent devices at the edge of the network, close to the user.

"Our network business is already an important part of our portfolio at roughly $5 billion in revenue," Intel CEO Robert Swan said during Intel's 2020 stockholders' meeting May 14. "The room for growth is tremendous."