Coronavirus Diary: the effects of Covid-19 on the cloud industry

The impact of Covid-19 on the cloud industry

“Cloud native” has been a widely adopted term to describe both a modern container-based, microservices-oriented development methodology as well as an overall organisational mindset, embraced by born-in-the-cloud companies such as Cloudreach.

We embrace concepts such as ‘cloud first’ as fundamental operating principles that drive business agility and ubiquitous access to applications from home, at a client site or at work.

Cloud adoption to accelerate

We expect the Covid-19 pandemic to accelerate cloud adoption not just as a technological shift, but also as an operating model as companies recognise the limitations of their current environments and struggle with the impact of the pandemic on their businesses today. We expect this shift to be dramatic and compress the adoption curve from decades to just a few years as a result.

The most immediate impact we have seen with our customers is the massive shift to remote working, and we are engaging clients across the board to support them through this transition driven by the global stay-at-home reality. For example, Microsoft Teams usage has surged to a record 44 million users daily last week and Zoom increased daily users to over 200 million in March. When the shift was made to working remotely in lockdown, Cloudreach was already operating in a cloud-native manner meaning we switched to remote working seamlessly to deliver 100% of our services.

We have seen significantly increased investment from customers in the public sector, financial services, web-based services, and global logistics companies as the demand for food and medical supplies has skyrocketed.

Just last week, one large financial services customer in the US has just taken down many of its existing internal barriers to cloud adoption, and accelerated its migration to go all in with the cloud. And the week before last we enabled a global logistics company to quickly enable 5,000 employees remote access from Asia.

But alongside tailwinds we have also seen headwinds. We have seen customers in the hospitality and retail sectors, for example, cut back their spending to preserve cash to try and ride out the crisis. In these situations, we provide support by helping them companies optimise their cloud environments to align their resource utilization and drive immediate cost savings.

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Managing a virtual team

A big challenge that businesses will face on the way to cloud native is learning to manage a virtual team and adapting to this way of operating.

Leaders will need to upskill in crisis management and employees are going to have to adjust to this new landscape with centralised workspaces being a thing of the past. This will involve a psychological shift to maintain a team mentality.

In spite of the necessary adjustments, Cloudreach is still operating effectively and adapting to deliver services that will support the efforts in tackling this crisis without dropping a single customer engagement.

As a wider economy and as a society, we are all facing significant challenges, but there is also opportunity for IT leaders to lead their organisations and to innovate as we all adjust to the new world of work.

Work will change

The changes we’re seeing emerge now in this crisis will fundamentally change the ways some organisations work. As the old saying goes; ‘necessity is the mother of invention’.

The necessity of the pandemic is forcing organisations to change the ways they think about their IT and applications.

In the short term, organisations have had to move fast to adapt to a new reality and adopt some ‘cloud native’ principles just to stay operational. But as we go forward, business continuity will go from being the meeting no one wants to attend to being a central part of every business’s IT strategy and we will see more continuity-driven transformations.

This makes it highly likely that we will see a new cloud-first model become the standard. This shift was always inevitable and in some sense the pandemic has only accelerated this change. The shift to public cloud and cloud native that we thought would occur over 20 years may now take place over the next two or three.

Written by Brooks Borcherding, president and CEO at Cloudreach

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