Oct 15, 2020
COVID–19 Impact on Cloud Computing in the Semiconductors and Electronics Industry
- Semiconductors and Electronics
- Sep 28, 2020
COVID–19 Impact on Cloud Computing in the Semiconductors and Electronics Industry
An outbreak of the most dangerous epidemics called Corona Virus disease also known as COVID-19 has galloped the whole world with its worst effects and made world standstill in terms of movements of population, markets, cash flows, and economies. This outburst of virus forced various governments to launch lockdowns and commuting restrictions in the hope to contain this virus from spreading rapidly until the vaccine is invented. Lockdowns indicate temporary shutting of marketplaces, plants, workplaces except for essential services such as medics, doctors, and food markets. Lockdowns have negatively impacted several economies and sectors such as manufacturing, automotive, oil & gas, tourism, hospitality; on the other hand, it has also impacted positively on several sectors such as healthcare, cloud computing industry, and such others. The cloud computing adoption rate has massively increased due to companies offering work from home policies to its employees.
Earlier cloud meant, collection of vaporized water in the sky; but now when someone utters cloud corporates think about cloud computing; that’s’ how cloud computing made a corner space in the minds of computer technology students, aspirants, corporates and industry leaders. Cloud computing was growing at a healthy CAGR even before COVID–19 pandemic due to its features of low costs, application-specific cost and hassle-free storage facilities, since pandemic erupted adoption rate has seen sharp rise in the cloud computing industry. This scenario is mainly due to work from policies, businesses have gone digital, booming e-commerce industry, and other such sectors which require IT services to operate their entities. For instance, Director of ITU, Doreen Bogdan-Martin told, “Cloud computing represents the catalyst and the enabler of the important technological shift that was already well underway before COVID-19”.
Due to lockdown situations, various IT companies started offering work from home to its employees permanently or temporarily, which requires to cloud platform access to its employees in order to get the work done and provide required information portal access. Logically, the majority of the employees worldwide is working from home adoption of cloud platforms and is going to experience a sharp rise. For instance, managing director of Google Cloud India, Karan Bajwa in an interview said, “The one thing we have seen from this unexpected outbreak is the rapid adoption of digital tools as more agile organizations turn to technology to stay connected and productive, as more and more businesses rely on connecting an at-home workforce to maintain productivity, we have seen surges in the use of Google Meet, our video conferencing product, at a rate we’ve never witnessed before”.
Apart from the IT sector, other sectors have also started adopting cloud computing to ensure smooth workflow, such other sectors are e-commerce, healthcare, media and entertainment.
Impact on Demand & Supply Chain:
As described in the overview demand for cloud computing or cloud applications has seen major growth spike majorly due to remote workforce operating for different organizations. The companies that were earlier using the software are now shifting their operations on software as a service platform which makes way for cloud applications. All of the business sectors worldwide have experienced this pandemic effect somewhat negatively; however few technologies such as cloud computing could bring businesses back on track as it offers remote work facilities at low cost and being safe from this disease spreading. IT can bring back the organizations which are experiencing losses to no loss situation of low loss situation or marginal profit situation. According to MIT Technology Review, major companies are shifting to the cloud, “We needed to downgrade our servers to save costs, and we also want to increase capacity once the lockdown is over. We used the elastic capacity expansion utility in Alibaba Cloud for our product clusters, which automatically downgrades and upgrades resources according to traffic volume. As our business grows, customers will have new expectations, requiring more features, a smoother experience, and greater service availability”.
With pandemic continuing its havoc for about 8 months as of now, companies cannot be shut for long as economies are being affected; decreasing per capita income rate, companies increasing debt is forcing organizations to opt for a cloud application, which is generating very high demand for cloud solutions, according to Mirae Asset, Korean Investment firm suggested that growth rate would be around 58% for cloud computing adoption in Asia region. President of international business at Alibaba Cloud Intelligence, Selina Yuan also explained about how small & medium enterprises (SMEs) are rapidly adopting cloud solutions, further explained, “As enterprises and SMEs move more of their critical businesses online, they will increasingly look for trusted cloud vendors to support their online footprint in an efficient, resilient, and secure way”.
Cloud applications are cost effective as it provides specific features according to requirement at reduced cost which is ideal small & medium enterprises (SMEs) technology in this pandemic situation. Selina Yuan expressed views on cost saving by SMEs, “When businesses can purchase cloud products on demand, and scale cloud resource consumption up and down based on their actual needs, going onto the cloud actually helps them with easier access to digital tools and best-in-class technologies in a cost-effective way—and access insight and intelligence that could see them emerge from the crisis even stronger. This is especially true for SMEs, who can capture the opportunities arising from cloud intelligence without heavy upfront IT investment.”
Supply chain is not impacted due to this pandemic as deployment virtually done and no physical means are used, which ensures smooth supply chain.
Steps Taken by Cloud Computing Solutions & Service Providers:
With organizations scaling up their operations by shifting to digital technology and adopting cloud services; solution and service providers of cloud computing are providing cloud services to SMEs also at higher pace. Apart from cloud computing giants such as Google, Amazon, Microsoft and Alibaba smaller providers are gearing up to grab the opportunity. Even the small chunk of this big pie would generate large amount of revenues. Cloud providers are offering clouds with unlimited storage, features to send confidential documents safely and online communication for meetings can be done through cloud services.
From the overview, impact on demand & supply chain, and steps were taken by service providers it is evident that the cloud computing industry which was already growing with a healthy CAGR has achieved boosting growth rate since the outburst of COVID–19 pandemic. Since the pandemic situation in the coming times looks blur and unpredictable and safety norms implied by government bodies are in regulation; work from the home policy by companies is not getting lifted cloud computing industry will surely experience the boom. Many of the giant companies such as Quora, Twitter, OYO have opted for permanent work from home of long term work from home policies which indicates that cloud computing is the futuristic technology and will stay for the longest of the time. Cloud platforms help companies to get connected on cloud platforms such as Google meet where meetings can take place and cloud offers secured storage of meeting material. And these cloud platforms are generating heavy revenues in this pandemic situation. For instance, Google meet achieved a 60% day-on-day growth rate in recent times and is generating more than 30 times the revenue as in January 2020. Goggle meet secures daily 3,800 years size of meetings.
Working from home, online business meets, online teaching at schools & universities, online examinations; all of these require strong and efficient online network which is wisely feasible with cloud computing technology. Even if pandemic situations are evaded cloud technology looks inevitable with ease of operations in which virtual things will ensure smooth workflows such as online meets, task monitoring, unlimited storage, and secured data. Digital transformation is the biggest step to future growth and adoption of cloud services is a vital step in the digital transformation of an organization.
According to IBM CEO Arvind Krishna, ““With this crisis, the importance of hybrid cloud and AI has accelerated. IT transformation journeys that would have lasted a few years are being packed into months”. He iterated a fact that digital transformation would have taken several years if pandemic situation did not occur. IBM launched several AI-powered services and hybrid cloud computing initiatives for its clients.
According to Managing Director of Arrow PC Network, Gurpreet Singh in an interview said, “Customers will consume technology in all forms depending upon their workloads and hybrid cloud platforms will reap utmost benefit from it as this has opened up a myriad of possibilities in terms of technological advancement”, he further described in brief, “In simple terms, hybrid cloud is the future of IT in the post COVID-19 world”.
Above statements from industry experts, it can infer that the market for cloud computing is looking bright in terms of demand as of now and is expected to grow at greater growth in the coming times. In the coming half-decade cloud computing industry looks optimistic and can be seen as an opportunity.