Looking Back: Cloud Computing in 2020 Experienced Massive Growth

2020 was an unprecedented year – for cloud computing.

With hundreds of millions of people working from home for most of the year, demand for cloud computing reached all-time highs. The concept of digital transformation, which basically means that companies are converting analog processes to digital or online ones, has been a driving factor for organizations of all sizes moving to cloud computing in 2020.

By the Numbers: Cloud Computing in 2020

At the end of April, it was already clear that the public cloud providers were going to grow. Amazon, Microsoft and Google all reported their first quarter earnings and Google cloud revenue was up by 52% year-over-year, Amazon cloud revenue was up 33% and Microsoft saw its cloud revenues grow by 27%

As the COVID-19 pandemic raged on, cloud computing vendors continued to show growth. The second quarter of the year included the months of April, May and June, which were all heavily impacted by COVID-19-related shutdowns. During that period double digit cloud growth continued. At the time Google CEO Sundar Pichai stated that during the first half of 2020, technology and innovation proved to be a significant recovery mechanism for businesses.

By the end of October the same trends first seen in April were still clearly apparent as the public cloud vendors disclosed their final set of financial results for the calendar year. For the third quarter Amazon reported year-over-year cloud revenue growth of 29%, Microsoft's cloud was up by 31%, while Google reported a 45% gain.

While the overall growth of the cloud computing in 2020 was strong, Amazon's CFO Brian Olsavsky noted that some industries, like travel and hospitality, were struggling and as a result were cutting back on their cloud usage.

"Overall, cloud is a mixed bag right now because we're very happy with the cloud performance and we're seeing a lot of customers who are now moving to the cloud at a faster pace," Olsavsky said.

Hybrid and Multi-Cloud

While the revenue growth in the public cloud during 2020 is undeniable, there is a parallel trend that also advanced during the year – hybrid computing.

Hybrid computing can involve both public and private cloud deployments as well as deployment of cloud assets on premises. Among the big moves in the hybrid space during 2020 was the advancement of the AWS Outposts effort which puts AWS managed hardware into a customer environment.

Outposts were first announced back in 2018, but took a major step forward in 2020 with the announcement at the re:invent conference of new form factors. Previously AWS Outposts and the Amazon hybrid strategy was largely about putting a full rack of hardware on-premises, but now that vision has become much more expansive with smaller options.

"These two smaller Outposts formats have the same functionality of Outposts, but just for a small space," AWS CEO Andy Jassy said. "That means that restaurants or hospitals or retail stores or factories can use Outposts that AWS distributes to that edge."

Hybrid cloud adoption has become such a large trend in cloud computing in 2020 that IBM is betting its business future on it. In April, IBM named Arvind Krishna as the new CEO of the company and he promptly declared his intentions about the future of the business.

"Hybrid cloud and AI are two dominant forces driving change for our clients and must have the maniacal focus of the entire company," Krishna wrote in an open letter to IBM employees.

OpenStack Opens Up

2020 was also a transformational year for the open source OpenStack cloud project, both in terms of technology and governance.

Though OpenStack does not power any of the big three public cloud providers, it has found a home enabling alternative cloud providers like OVHcloud and VEXXHOST among others. There were two major releases of the OpenStack platform in 2020 with the Ussuri milestone out in May and Victoria update released in October. The OpenStack Victoria release benefitted from 790 developers from 160 organizations contributing a total of over 20,000 code changes.

As an open source effort, the OpenStack platform is governed by the OpenStack Foundation, which was rebranded in 2020 as the Open Infrastructure Foundation to reflect a broader vision. While OpenStack is still at the core, the Open Infrastructure Foundation also includes other projects including the Zuul continuous integration platform, the Airship lifecycle management project, the StarlingX edge computing project and Kata containers.

What is clear from looking back at cloud computing in 2020 is that if there was any doubt before, there shouldn't be any now – cloud computing is here to stay. With growth in the public cloud, adoption of hybrid cloud approaches and open source options there is no reason to expect that cloud won't continue to be the engine of digital transformation for years to come.