The spread of the COVID-19 pandemic has left its mark on various business sectors all over the world. However, things have been quite positive for the cloud application market as it has registered a considerable growth in the past few months. The sudden outbreak of the pandemic has led to a huge opportunity for the cloud applications in the first quarter of this year. As the work from home concept was widely adopted by the organizations across the globe, cloud gave the organizations varied applications for remotely accessing the data, building and running crucial applications, and allowing to work with the employees and partners all over the world. Keeping this unique situation in mind, we have brought to you our in-depth analysis to help you understand the impact of the pandemic on the clouds applications market. So, without further ado, let’s find out COVID-19 Impact on Cloud Computing market in detail.
The dominant share of small and medium enterprises
When you think in terms of organization size, the cloud application market is divided into large enterprises and SMEs (small and medium enterprises). The small and medium enterprises used to account for about $57.0 billion in revenue in 2018, and now, they are projected to increase at nearly 19% by the year 2026. This growth has been widely credited to the considerable growth in the use of cloud-based applications by the Small and Medium Enterprises.
The lucrativeness of the supply chain management
Depending on the solutions, the market for cloud applications is divided into a number of segments. The following are the solution-based cloud applications market divisions:
- Supply chain management
- Business analytics and intelligence
- Content management
- Human capital management
- Enterprise resource management
- Customer relationship management
Though all of these segments have been influenced to some degree by the cloud computing market, the supply chain management deserves a special mention in terms of its projected growth.
The market size for supply chain management stood at around $17 billion in 2018. However, it is estimated to register the highest CAGR of more than 18% by 2026. The growth has been credited to the rapid increase in embracing cloud-based supply chain management systems among the small and medium enterprises in the recent time. The cloud supply chain management system helps the SME’s by offering real-time access to enterprise data, which helps in improving business processes and making faster decisions.
The profitability of consumer goods and retail
In terms of verticals, the cloud application market is segregated into sections, such as:
- Healthcare and life sciences
- Retail and consumer goods
- Energy and utilities
- Transportation and logistics
- Travel and hospitality
Out of all these sections, the two that need special mention are healthcare and retail and consumer goods. The healthcare sector, in terms of its importance in the ongoing pandemic situation, and the retail and consumer goods segment, for its share in the cloud applications market, have taken greater significance in this division. The retail and consumer goods sector is expected to dominate the global market for cloud applications. This vertical has accounted for $8.9 billion earlier and is expected to showcase a growth with a CAGR of over 19% in 2026.
This growth is mostly owed to the rapid growth in the implementation of cloud applications by online retailing. Besides, cloud technologies have considerably disrupted this particular segment because of the widespread adoption of cloud computing for security, storage, and backup services.
The healthcare sector leading the cloud investments
The healthcare sector requires secured and scalable cloud infrastructure for managing and maintaining patient information with a high degree of flexibility and speed. With the pandemic situation going from bad to worse, there is an immediate requirement for advanced technologies, such as cloud computing to analyze crucial patient data. As the amount of electronic health records held by the organization is on the rise, the healthcare providers are increasing their use of highly secure and scalable cloud solutions to cater to a considerable high number of cases. Healthcare institutes and private doctors are offering online consultation amongst country-wide lockdowns. The virus outbreak has also increased the demand for mobile ambulance services. All of these services and facilities require cloud-based collaboration and communication platforms for improving employee productivity and operational efficiency. Many healthcare providers have hired Cloud Computing Companies to develop applications that help in estimating resource requirements, such as ventilators and ICU beds, by gaining clinical insights on the pandemic. So, we can sum up the increased demand of cloud applications in the healthcare segment in two simple facts:
- Growing requirements for clinical insights and data analytics
- Increased spending on ERP solutions and cloud-based applications
In the middle of the COVID-19 pandemic, both of these factors have come together to create revenue opportunities for the cloud service provider.
A geographical analysis of the major players in the market
Depending on the region, if we take the regions as Asia Pacific, Europe, North America, Latin America, Middle East and Africa, the rate of disaster recovery has not been the same all over. However, the adoption of cloud applications have uniformly increased across the world.
The Asia-Pacific market for cloud applications has to be especially mentioned here because of its huge growth in the user base for cloud computing. This growth mainly stems from an increased awareness about the benefit of cloud applications in the countries like South Korea, India, and China. The top players in each of these countries have realized the potential of cloud applications. Speaking of top players, some of the top names that have had an increased adoption of cloud computing technologies include Google, Microsoft Corporation, Oracle, Salesforce, Adobe, IBM, and SAP.
SaaS solutions to hold a considerable size of the market
In terms of technology, SaaS (software as a service) solution part of the market is expected to have a larger market size in this period. Cloud software solutions faced a major hit with the spread of the COVID-19 pandemic. Multiple verticals of cloud exist, such as retail, consumer goods, and manufacturing, where the operations were put on hold. But, the organizations changed their focus and started relying more on cloud automation. They strengthened their online existence by developing ecommerce sites on cloud platforms for decreasing the impact of the pandemic on operational efficiency and productivity. Such cases for the use of cloud applications are rising in the pandemic. Several new use cases also have been garnered, with application areas that demand for cloud-based software solutions having witnessed a huge increase. The growth in SaaS software solutions have been impacted heavily by verticals like retail, healthcare, and logistics. As the adoption of cloud was already on the rise in major verticals, the COVID-19 disruption has had a major impact.
The bottom line
With an increasing number of businesses considering to shift permanently to remote working facilities and the customers being more dependent on the online solutions, the rise in the demand for cloud applications is a given. As mentioned previously, the growth has been seen in all the sectors, with the only difference being in the percentage of growth. It can be summed up without a doubt that the cloud applications market has been positively impacted by the COVID-19 pandemic.