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Post-Covid Cloud Software Growth Rate Still Remains High
The cloud market which skyrocketed last year due to COVID-19 is still leading in revenue growth
Cloud stocks have reported a stunning growth in their Q1 earnings report. It has totally broken the narrative that value stocks are the safer choice. In this article for Forbes, Beth Kindig has written about the state of Cloud after Covid and the earning report that proves Cloud has become stronger than ever.
This is what he has written:
The decision-makers were under massive pressure to stay afloat in a sudden, recessionary environment last year.
62% of CFOs surveyed by Gartner were planning expense reductions to their budgets
Despite the budget cuts in IT, cloud software remained resilient last year.
In 2020, IT spending was reduced, yet cloud software grew at historic levels. This is because cloud software and also infrastructure migrations help to lower costs and meanwhile increase productivity.
However, during times of expansion, the increase in productivity and ability to scale is also welcomed.
This shift in mindset from last year was misunderstood as a one-time event instead of a permanent change.
Zoom reported 8.7% YoY growth with higher than predicted revenue in the latest quarter and has confirmed 42% YoY growth for this year.
With the US economy almost fully opened, Shopify reported triple-digit YoY revenue growth, the highest in their history.
Cloud has a long runway and is projected to make up 14.2% of total global enterprise IT spend in 2024 compared to 9.1% in 2020.
According to analysts, mobility, remote working, and hybrid workforces will lead to more market growth over the foreseeable future.
The analyst firm also predicts that companies will grow at 35% to $120 billion in 2021. This is an increase from its original prediction that Cloud IaaS would grow by 28%. In addition, the firm predicts that Alibaba, instead of Google Cloud, will take the third spot.
What Zluri Thinks?
The cloud is here to stay. The pandemic was just one of the reasons for the growth of cloud software and not the sole one. With clearly tangible advantages like productivity, cost, and ease of use, it was only a matter of time before the boom happened.
You can read the full article here.