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Coronavirus: Weighing up the responses of the public cloud giants to Covid-19

The Covid-19 coronavirus pandemic had a huge impact on the demand for cloud services from enterprises worldwide, but how have the cloud giants fared behind the scenes?

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As governments worldwide introduced lockdown measures to contain the spread of the Covid-19 coronavirus, Amazon Web Services (AWS), Microsoft, Google and Alibaba began readying their operations to ensure the millions of businesses that rely on their cloud services could continue to work as normal.

But even these four giants of the public cloud world could not have foreseen the surge in demand their respective platforms would have to endure as the stay-at-home lockdown mandates took hold across the globe.

“We saw unprecedented demand beyond what we would normally expect, so we had to do a lot of things to actively monitor the performance and usage trends to make sure we’re optimising services for customers to accommodate this new growth in demand, and then take proactive steps to manage the high usage periods during the unprecedented time,” Michael Wignall, Azure business lead at Microsoft UK, told Computer Weekly.

This included expediting additional server capacity in some datacentre regions and load balancing the architecture underpinning the Microsoft Teams collaboration platform as demand peaked.

While the hyperscalers appeared to have coped admirably with these demands, Nicholas McQuire, analyst at IT market watcher CCS Insight, says it remains unclear if any of them struggled with helping customers spin up new resources while balancing demand for their other products.

Particularly Microsoft, given that it has to set aside a large chunk of its datacentre capacity to run its remote collaboration, desktop virtualisation and video-conferencing tools, while hosting its customers own workloads.

“This is the big question for Microsoft, which has MS Teams, Dynamics and Office 365,” says McQuire.

On a recent Microsoft earnings call, questions along these lines were put to the firm, with the software giant moving to assure the analysts present that it had sufficient capacity to cope.

“I think they’re nervous [on this topic] because they don’t want to reveal their level of capacity to their competitors because...if they’re at maximum capacity, their competitors will exploit it,” McQuire suggests.

During his talk with Computer Weekly, Wignall keenly emphasises that Azure can rise to any scaling challenges – and, to date, that cannot be disputed.

Either way, Microsoft and its rivals may have already passed the peak in usage they can expect to experience during the pandemic, and have proved they are resilient enough to withstand the biggest pressure and fastest changes businesses have ever experienced.

“Providers proved to the world and their communities that they’re able to handle a situation like the Covid-19 pandemic with very little disruption, so the public cloud is going to be where the confidence is going to be, particularly as with private cloud or on-premise, you may have your own datacentres, but if your people can’t get to work because of a lockdown, that datacentre is useless,” says Gartner analyst Sid Nag.

Aside from having to weather these huge surges in demand, the big four cloud giants have continued to grow their global datacentre footprints, release new features and products, and announce new customer wins.

They have also been keen to show how their respective technologies has been used in the fight against Covid-19 – whether that is for the NHS, to support key workers, the pharmaceutical industry or in medical research.

They are all continuing to make big investments in their businesses. For example, Alibaba is investing $282m in its partner programme and Microsoft announced a $1bn investment in Poland that includes a new Azure region in the country, as well as a $1.5bn five-year investment plan in Italy to do the same.

But internally they have had to make changes. AWS had been coy about the processes it follows to ensure the safety of its staff through the pandemic, but AWS CEO Andy Jassy says the company made more than 150 process updates, including cleaning and social-distancing measures, to keep its cloud teams safe.

According to Amazon, any employee diagnosed with Covid-19 would receive up to two weeks’ paid time-off in addition to their other annual leave allowances.  

The cloud companies have had to adapt their marketing and sales strategies too. Remote cloud products and desktop virtualisation, for instance, are being pushed more – rather than the focus being on digital transformation, says McQuire.

“For example, AWS is ramping up on Chime and its desktop virtualisation products as well, which is interesting because in the past you wouldn’t really see those kind of remote productivity and collaboration products in the AWS portfolio emphasised, but in the last earnings they were front and centre in the announcements from [Amazon CEO Jeff] Bezos,” he says.

Change and adapt

This is nothing new for cloud companies which continually adapt to the latest trends. As Wignall suggests, Microsoft will continue to pivot based on customer demand. The first stage of that was in helping companies to react and respond, and next stage has seen more of an emphasis on supporting companies from a financial perspective.

“That could be through the rationalisation of the IT environment and how the set of cloud tools they’re bringing to market can add economic value or improve the economic picture for these organisations,” says McQuire.

For example, Selina Yuan, president of international business of Alibaba Cloud Intelligence, tells Computer Weekly the company launched a global SME-enablement programme in April, offering more than $30m in cloud-technology support to small firms affected by Covid-19.

“We are aiming to help both new and existing customers during this difficult time. For example, new customers can apply for coupon packages that cover 12 core products, ranging from an enterprise-grade cloud email solution and encrypted data storage service, to professional online training courses,” she says.

Gartner’s Nag suggests the public cloud community will also be focusing on areas of potential future growth. Such as new types of services and applications that will aid businesses that have decided to make their current remote-working practices permanent.

“Providers will have to think seriously about how they create new applications to run on the platforms themselves, or provide the necessary underlying infrastructure to support new applications developed by third-party SaaS [software-as-a-service] providers, as that’s where the real growth is,” he says, adding that they will continue to focus on emerging technologies such as machine learning, artificial intelligence (AI) and the internet of things (IoT).

But new services and applications may not get taken up immediately, as CIOs are tasked with cutting costs in the midst of a pandemic recession. So a key challenge facing the hyperscalers going forwards is to prove their new applications are worth investing in. And this will require them to work even more closely with their managed services partners (MSPs), Nag says.

“They have to nurture their managed service provider ecosystem to support the new world of applications,” Nag adds.

In terms of working on those new applications, customers may accept that they would have to wait longer than normal, as all of the suppliers are unable to work as efficiently as they would have been under normal conditions. However, according to Wignall, this hasn’t necessarily been the case.

“We’ve seen an increase in developer productivity during this time. For those developers who are building products – we track metrics on bug resolves, code check-ins and number of builds day, and since everyone moved out of the office and developed products remotely from home, we’ve seen an increase in the metrics,” he says.

“Whether that is sustainable in the long-term is yet to be seen, but in the short-term, the technology that we use to do remote development has actually increased productivity in the past couple of months.”

But even if there are new relevant services and CIOs are willing to invest, another issue is face-to-face time – the events and conferences that would have put many CIOs and sales executives in the same room are now proceeding virtually.

“We’ve flipped our face-to-face events to digital and we’ve seen an increased attendance and dwell time for some of those digital events compared to in-person, and we’re getting more registrations and less dropouts and more people spending time on these online events,” says Wignall.

However, only time will tell how much – if any – of a negative impact virtual events will have on lead generation and the ability to upsell to existing customers.

The reality is that while these companies are facing huge challenges, they are prepared to overcome them head on. Public cloud has now proven its capabilities in extraordinary circumstances, but the battle remains convincing customers that one supplier is better than the rest.

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