With the coronavirus pandemic further fueling the growth of cloud computing, startups working in the space have an opportunity to accelerate adoption of their cloud services.

Worldwide public cloud spending by end-user businesses and organizations is expected to grow 18 percent next year to $304.9 billion, up from $257.5 billion this year, according to research and advisory firm Gartner, leaving plenty of room for cloud startups to grab some market share.

As the United States enters what’s expected to be an economic recovery period in 2021, cloud is expected to continue to be a foundational area of the technology food chain, according to Wedbush Securities analyst Daniel Ives.

“The fundamental growth drivers for tech remain robust…especially around cloud and cyber security names, as more enterprises and governments accelerate their applications/data workloads to a cloud-driven environment, which has been markedly accelerated in this COVID backdrop,” Ives said in a Nov. 15 report.

The Coronavirus pandemic has catapulted digital transformation to the top of the must-haves in the minds of CIOs. It has been a go-to enabler for organizations to enhance their customer experience and generate higher ROI. Businesses with brick-and-mortar presence were shifting their approach towards building a digital presence to stay relevant and ahead of their competition.

Many have already begun their digital transformation journey, while some are in the designing phase. Technology landscape is dynamic in nature. While the pandemic forced businesses to adopt digital drivers such as automation, big data, digital workforce, etc., they were soon replaced with the next big wave of digital transformation. This new wave has brought in new trends that will shape up the next normal. Let’s look at 5 such trends that will soon become the next must-haves.

Customer Experience Reimagined
It’s not just about having best products anymore. The new wave of millennials prefers convenience over loyalty. Create digital experiences that support modern web in the form of progressive web apps, true native mobile apps with best-in class UX, intelligent chat-bots, conversational apps, wearables, and immersive experiences that leverage augmented reality. Organizations are trying to maximize the use of components and backend integration that leads to a unified and seamless experience across channels.

The next big thing in Customer experience (CX) is to design amazing applications for any audience across any device with no limits on user experience taking full advantage of the underlying device OS for native and full power of modern browsers for web. Omni-channel tools eliminate data siloes and bring all the data at one place. Be it a web presence, a physical store visit, or a mobile application click, omni-channel binds all customer-facing interfaces together, integrated at the back-end, and helps in better CX and data visibility across the board.

Data and User Privacy
In the wake of privacy concerns amongst digital users, we will be seeing organizations focusing on user and data privacy. This will soon become a unique selling proposition for many to leapfrog their competitors. This could mean that users in the next normal will be able to allow/deny access to their data residing on applications, web and other digital channels. The user will be the owner of his/her data. Data privacy has shaken even multi-national brethren, forcing them to comply with new regulations laid by authorities. EU has already entered the game with General Data Protection Regulation (GDPR) compliance policy and other regions have followed suit.

APIs – The Road to Cloud
Cloud is already adopted by most organizations to create seamless business continuity and fasten go-to market. Application programming interfaces (APIs) are key in building economies of scale. From converting legacy infrastructure to micro-services, APIs will help businesses to reduce data silos and create collaborative experiences. It will also help them convert scattered applications into one behemoth of a data mart, helping them in making critical business-decisions and increase their overall ROI.

XaaS (Everything-as-a-Service)
As-a-Service (aaS) has already become the norm to become a truly digital-native enterprise. The new trend in the aaS model is Everything-as-a-Service (XaaS) where services rendered and delivered will completely reside on the cloud with virtual access to almost everything. Tools such as Internet of Things (IoT) and Artificial Intelligence (AI) will play a crucial role in building those services, or augmenting existing services to achieve the digital-native status quo.

AIaaS (Artificial Intelligence-as-a-Service)
AI technologies are already used by 77% of consumers. A number of technological innovations such as data processing, and face & speech recognition have become possible due to AI. AI is a vast area that includes AI platforms, chat-bots, machine learning (algorithm category consisting of various libraries and frameworks), deep learning and analytics.

AI has led to rise in the use of machine learning in computing. AI has contributed significantly in creating a framework for cloud computing. Many IT industry giants are already betting huge on AIaaS (Artificial Intelligence as a Service) with new line of services such as digital assistance, cognitive computing, machine learning, business intelligence, and so on.

These services can have significant impact on day-to-day lives of the consumers. With the help of vital statistics from health-care organizations, AI can help identify patterns and predict the desired outcome of a given situation in a focused environment. AI can also help in tracking of smart devices, thereby, creating a footprint of individuals. It can help marketers and advertisers with predictive data on what one is likely to do in a given event. This will help marketers to show relevant ads to consumers at the right time that could help them fetch better returns for their marketing dollars.

Needless to say, the new wave of digital technology trends can reduce human interactions, increase productivity, initiate automation, and simplify lives. Organizations need to understand the importance of this technology paradigm shift, and leverage it to create digital ecosystems and become future-ready enterprises to welcome the next normal with both hands.

The Coronavirus pandemic has catapulted digital transformation to the top of the must-haves in the minds of CIOs. It has been a go-to enabler for organizations to enhance their customer experience and generate higher ROI. Businesses with brick-and-mortar presence were shifting their approach towards building a digital presence to stay relevant and ahead of their competition. Many have already begun their digital transformation journey, while some are in the designing phase. Technology landscape is dynamic in nature. While the pandemic forced businesses to adopt digital drivers such as automation, big data, digital workforce, etc., they were soon replaced with the next big wave of digital transformation. This new wave has brought in new trends that will shape up the next normal. Let’s look at 5 new such trends that will soon become the next must-haves.

Customer Experience Reimagined
It’s not just about having the best products anymore. The new wave of millennials prefers convenience over loyalty. Create digital experiences that support modern web in the form of progressive web apps, true native mobile apps with best-in-class UX, intelligent chat-bots, conversational apps, wearables, and immersive experiences that leverage augmented reality. Organizations are trying to maximize the use of components and backend integration that leads to a unified and seamless experience across channels.

The next big thing in Customer experience (CX) is to design amazing applications for any audience across any device with no limits on user experience taking full advantage of the underlying device OS for native and full power of modern browsers for web. Omni-channel tools eliminate data siloes, and bring all the data in one place. Be it a web presence, a physical store visit, or a mobile application click, omni-channel binds all customer-facing interfaces together, integrated at the back-end, and helps in better CX and data visibility across the board.

Data and User Privacy
In the wake of privacy concerns amongst digital users, we will be seeing organizations focusing on user and data privacy. This will soon become a unique selling proposition for many to leapfrog their competitors. This could mean that users in the next normal will be able to allow/deny access to their data residing on applications, web and other digital channels. The user will be the owner of his/her data. Data privacy has shaken even multi-national brethren, forcing them to comply with new regulations laid by authorities. EU has already entered the game with the General Data Protection Regulation (GDPR) compliance policy and other regions have followed suit.

APIs – The Road to Cloud
Cloud is already adopted by most organizations to create a seamless business continuity and fasten go-to market. Application programming interfaces (APIs) are key in building economies of scale. From converting legacy infrastructure to micro-services, APIs will help businesses to reduce data silos and create collaborative experiences. It will also help them convert scattered applications into one behemoth of a data mart, helping them in making critical business-decisions and increase their overall ROI.

XaaS (Everything-as-a-Service)
As-a-Service (aaS) has already become the norm to become a truly digital-native enterprise. The new trend in the aaS model is Everything-as-a-Service (XaaS) where services rendered and delivered will completely reside on the cloud with virtual access to almost everything. Tools such as the Internet of Things (IoT) and Artificial Intelligence (AI) will play a crucial role in building those services or augmenting existing services to achieve the digital-native status quo.

AIaaS (Artificial Intelligence-as-a-Service)
AI technologies are already used by 77% of consumers. A number of technological innovations such as data processing, and face & speech recognition have become possible due to AI. AI is a vast area that includes AI platforms, chat-bots, machine learning (algorithm category consisting of various libraries and frameworks), deep learning, and analytics.

AI has led to rise in the use of machine learning in computing. AI has contributed significantly in creating a framework for cloud computing. Many IT industry giants are already betting huge on AIaaS (Artificial Intelligence as a Service) with new line of services such as digital assistance, cognitive computing, machine learning, business intelligence, and so on.

These services can have a significant impact on the day-to-day lives of consumers. With the help of vital statistics from health-care organizations, AI can help identify patterns and predict the desired outcome of a given situation in a focused environment. AI can also help in tracking of smart devices, thereby, creating a footprint of individuals. It can help marketers and advertisers with predictive data on what one is likely to do in a given event. This will help marketers to show relevant ads to consumers at the right time that could help them fetch better returns for their marketing dollars.

Needless to say, the new wave of digital technology trends can reduce human interactions, increase productivity, initiate automation, and simplify lives. Organizations need to understand the importance of this technology paradigm shift, and leverage it to create digital ecosystems and become future-ready enterprises to welcome the next normal with both hands.

What DevOps Tools Market Research Typically Covers

Industry research reports on the DevOps tools market generally analyze the following dimensions:

• Market size and growth trajectory — historical revenue figures and forward-looking forecasts expressed in both value and volume terms.
• Competitive landscape — market share, strategic positioning, and product differentiation among leading vendors.
• Segment-level analysis — breakdown by organizational maturity, application domain, and geographic region.
• Demand and supply dynamics — adoption drivers, barriers to entry, and emerging opportunities.
• Impact of macroeconomic events — such as the COVID-19 pandemic, which accelerated remote-first delivery models and increased urgency around automation tooling.

Market Segmentation by DevOps Maturity

One common framework for segmenting DevOps tool adoption is organizational maturity. Buyers and analysts often classify organizations into three tiers:

• DevOps Ready — Organizations that have the cultural and process foundation in place but are still evaluating or piloting tooling.
• DevOps Enabled — Teams actively using a defined toolchain, with CI/CD pipelines and infrastructure automation in production.
• DevOps Capable — Mature organizations running fully automated pipelines, measuring DORA metrics, and integrating security (DevSecOps) and operations (SRE practices) into their workflows.

Production volume, average selling price, and revenue trends differ significantly across these three tiers, and vendors frequently tailor their go-to-market strategies accordingly.

Key Industry Verticals Driving Adoption

DevOps tooling adoption is not uniform across sectors. The verticals that consistently represent the largest share of consumption include:

• IT and Technology — The primary early adopter segment; software companies and managed service providers have the highest tool density per developer.
• Banking, Financial Services, and Insurance (BFSI) — Regulatory complexity and the need for audit trails drive investment in pipeline automation, configuration management, and compliance-as-code tooling.
• Retail and E-Commerce — High release frequency requirements around seasonal peaks make CI/CD and feature-flag tooling critical.
• Telecom — Network function virtualization and 5G rollouts are accelerating infrastructure-as-code adoption.
• Education — Growing adoption of cloud-hosted learning platforms is pushing EdTech teams toward containerization and orchestration tools.
• Other Sectors — Healthcare, manufacturing, and government are emerging segments with increasing DevOps investment.

Major Vendors in the DevOps Tools Market

The DevOps tools landscape is broad, spanning configuration management, containerization, CI/CD orchestration, release automation, and collaboration. Vendors that appear consistently in market analyses include:

• Puppet Labs — Infrastructure automation and configuration management at scale.
• Chef (now part of Progress) — Policy-based infrastructure automation with strong compliance features.
• Docker Inc. — Container runtime and image registry tooling that underpins most modern CI/CD pipelines.
• Red Hat (Ansible) — Agentless configuration management and automation, widely adopted in enterprise Linux environments.
• Atlassian — Collaboration and issue-tracking (Jira, Confluence) plus CI/CD (Bitbucket Pipelines).
• SaltStack (acquired by VMware) — Event-driven automation and remote execution.
• Broadcom — Enterprise release automation and mainframe DevOps tooling.
• Rackspace — Managed cloud services with DevOps advisory and toolchain integration.
• XebiaLabs (now Digital.ai) — Release orchestration and value stream management.
• VersionOne (now part of Digital.ai) — Agile planning and DevOps value stream tooling.
• Cisco — Network automation and AppDynamics observability.
• CollabNet (now part of Digital.ai) — Agile and DevOps platform solutions.
• IBM — UrbanCode deploy and release tooling, integrated with hybrid cloud offerings.
• Microsoft — Azure DevOps and GitHub Actions represent one of the largest integrated DevOps ecosystems.
• VMware — Tanzu platform for Kubernetes and application modernization.
• DBmaestro — Database DevOps and release automation tooling.
• Spirent Communications — Test automation for networking and cloud environments.

Regional Market Distribution

DevOps tool adoption and revenue are distributed unevenly across global regions. The key markets typically analyzed in industry reports include:

• North America — Historically the largest revenue-generating region, driven by a dense concentration of technology companies and early enterprise adoption.
• Europe — Strong growth, with GDPR compliance requirements adding demand for audit and policy-as-code tooling.
• China — Rapid growth in domestic cloud platforms and local DevOps toolchain alternatives.
• Japan — Mature IT market with increasing digital transformation investment from traditional enterprises.
• Middle East & Africa — Emerging market with government-led digital transformation programs driving adoption.
• India — A significant contributor as both a consumption market and a services delivery hub for global DevOps engagements.
• South America — Growing adoption in fintech and retail sectors, with Brazil as the primary market.

Key Factors Shaping the DevOps Tools Market

Several structural forces are influencing the direction of the DevOps tools market:

• Platform consolidation — Vendors are acquiring point solutions to offer integrated platforms, reducing the number of discrete tools teams need to manage.
• Shift-left security — Growing demand for security tooling embedded directly into CI/CD pipelines (SAST, DAST, SCA, secrets scanning).
• Cloud-native architecture — Kubernetes adoption is reshaping infrastructure tooling requirements, favoring operators, Helm charts, and GitOps workflows.
• AI-assisted development — Emerging integration of AI code assistants and intelligent test generation into DevOps pipelines.
• Regulatory pressure — Compliance requirements in BFSI, healthcare, and government are increasing demand for tooling with built-in audit trails and policy enforcement.
• Remote-first delivery — The COVID-19 pandemic accelerated distributed team practices, increasing reliance on cloud-hosted CI/CD and collaboration tooling.

Evaluating DevOps Toolchain Investments

For engineering leaders assessing toolchain decisions, market research provides useful context but should be supplemented with hands-on evaluation. Consider the following when reviewing vendor options:

• Alignment with your current cloud provider and existing toolchain to minimize integration overhead.
• Total cost of ownership, including licensing, training, and operational overhead — not just seat price.
• Community activity and ecosystem health (plugins, integrations, open-source contribution cadence).
• Vendor stability: acquisition activity in this market is high, and roadmaps can shift after M&A events.
• Support for your target deployment model — on-premises, SaaS, or hybrid.

Market share data provides a useful starting point, but the right toolchain for your organization depends on team size, maturity, regulatory environment, and existing infrastructure investments.

Market Overview

DevOps platforms consolidate tooling for source control, build automation, testing, deployment, configuration management, and monitoring into cohesive workflows. Enterprises invest in these platforms to reduce the friction between development and operations teams, shorten release cycles, and improve system reliability. Demand spans organizations of all sizes—from startups running cloud-native workloads to large enterprises modernizing legacy infrastructure.

Key market drivers include the broad shift to cloud infrastructure, the rise of microservices and container-based architectures, regulatory pressure for faster but auditable release processes (particularly in finance and healthcare), and the sustained shortage of specialized operations talent that makes automation economically attractive.

Major Vendors in the DevOps Platform Space

The market includes a wide range of established technology companies and specialist vendors. Prominent players include:

• Puppet Labs – configuration management and infrastructure automation
• Chef (now Progress Chef) – infrastructure-as-code and compliance automation
• Docker Inc. – container runtime and image distribution
• Red Hat / Ansible – agentless automation and hybrid-cloud orchestration
• Atlassian – developer collaboration, issue tracking (Jira), and CI/CD (Bamboo, Bitbucket Pipelines)
• SaltStack (now part of VMware) – event-driven automation and configuration management
• CA Technologies (now Broadcom) – enterprise release automation and value-stream management
• Rackspace – managed cloud services with DevOps-as-a-service offerings
• XebiaLabs (now Digital.ai) – release orchestration and value-stream intelligence
• VersionOne (now Digital.ai) – agile planning and portfolio management
• Cisco – network automation and application performance tooling
• CollabNet VersionOne – agile lifecycle management
• IBM – DevOps toolchains integrated with hybrid-cloud and mainframe environments
• Microsoft – Azure DevOps Services and GitHub Actions
• VMware – Tanzu portfolio for Kubernetes-based application platforms
• Spirent Communications – network and application test automation
• DBmaestro (now part of Broadcom) – database DevOps and release automation

The vendor landscape has consolidated significantly through acquisitions. Practitioners should verify current ownership and product branding before evaluating any specific tool.

Product Type Segmentation

DevOps platforms are commonly categorized by the maturity level they support within an organization:

• DevOps Ready – Platforms that provide foundational tooling (version control, basic CI pipelines, ticketing) enabling teams to begin adopting DevOps practices without requiring significant process change upfront.
• DevOps Enabled – Platforms that integrate multiple pipeline stages—build, test, deploy, and monitor—into a unified workflow, supporting teams that have already established basic DevOps habits and want to increase automation coverage.
• DevOps Capable – Enterprise-grade platforms offering advanced capabilities such as value-stream mapping, policy-as-code compliance gates, AI-assisted anomaly detection, and cross-team orchestration for organizations running DevOps at scale.

Industry Vertical Adoption

DevOps platform adoption is not uniform across industries. Demand is shaped by each sector’s release velocity requirements, regulatory environment, and existing IT maturity:

• IT & Technology – The earliest and deepest adopters, with software companies often building bespoke toolchains on top of open-source components.
• Banking, Financial Services & Insurance (BFSI) – Strong demand driven by competition from fintech entrants and the need to deliver digital banking features quickly while meeting strict compliance and audit requirements.
• Retail & E-commerce – Seasonal traffic patterns and rapid feature experimentation push retailers toward continuous deployment and feature-flag management.
• Telecom – Network function virtualization and 5G rollouts are increasing the need for infrastructure automation and zero-downtime deployment practices.
• Education – Growing adoption of SaaS-delivered learning platforms creates demand for reliable, automated release pipelines among edtech providers.
• Other verticals – Healthcare, government, manufacturing, and energy sectors are at varying stages of DevOps adoption, often constrained by legacy systems and compliance frameworks.

Key Factors Shaping the Market

Several structural forces continue to influence where and how the DevOps platform market evolves:

• Platform consolidation – Buyers increasingly prefer integrated platforms over point solutions, favoring vendors who can cover the full software delivery lifecycle from planning through production observability.
• Cloud-native shift – Kubernetes adoption is pulling DevOps tooling toward GitOps patterns and declarative infrastructure, raising the baseline capability expected from platforms.
• Security integration (DevSecOps) – Security scanning, secret management, and policy enforcement are becoming table-stakes features rather than optional add-ons.
• AI-assisted workflows – Vendors are embedding machine learning into anomaly detection, predictive rollback, and automated code review, though the maturity of these features varies widely.
• Regulatory and compliance pressure – Frameworks such as SOC 2, ISO 27001, and sector-specific regulations drive demand for auditable pipelines and change-management tooling.

Evaluating DevOps Platforms: Questions to Ask

When assessing platforms for your organization, consider the following questions—similar to those addressed in formal market research:

• Which pipeline stages does the platform cover natively, and which require third-party integrations?
• How does the vendor handle multi-cloud and hybrid-cloud deployment targets?
• What compliance and audit reporting capabilities are built in?
• How does the platform scale from a single team to dozens of teams with different release cadences?
• What is the total cost of ownership, including licensing, training, and integration effort?
• Which regions or cloud providers are supported, and are there data-residency constraints?

Summary

The global DevOps platform market encompasses a broad ecosystem of vendors ranging from open-source-rooted specialists to large enterprise software suites. Buyers should evaluate platforms against their own maturity level, vertical-specific compliance requirements, and the degree of integration they need across the software delivery lifecycle. The market continues to consolidate, making it important to assess vendor roadmaps and acquisition histories alongside current feature sets.

“We’ve had to turn on the Black Friday/Cyber Monday protocol to support those traffic demands and surges so that they can handle whether people are hoarding and pulling forward their buying or just kind of changing their consumption behavior,” said Carrie Tharp, Google Cloud’s vice president of retail and consumer.

Google Cloud has ramped up capabilities for its grocery and mass merchandising customers to Black Friday and Cyber Monday levels as they face unparalleled demand for groceries and other essentials amid the coronavirus (COVID-19) pandemic.

Customers including Target are seeing an “unprecedented” period of demand that rivals the biggest holiday shopping days of the year, according to Carrie Tharp, Google Cloud’s vice president of retail and consumer.

“We’ve had to turn on the Black Friday/Cyber Monday protocol to support those traffic demands and surges so that they can handle whether people are hoarding and pulling forward their buying or just kind of changing their consumption behavior,” said Tharp, who served as chief digital and marketing officer at Dallas luxury retailer Neiman Marcus Group before joining Google Cloud last August. “What we’ve really focused on…is ensuring that we get all of our capabilities that can be used in short order — whether you were a customer previously or not — to the forefront for retailers to make sure they’re supporting their employees and their customers in this time.”

In a “normal” retail year, Google Cloud’s special Black Friday/Cyber Monday program helps customers with capacity planning and management to prevent outages or customer experience disruptions when the traditional start of the busy holiday shopping season begins on Thanksgiving or the day after. Google Cloud engineers typically work shoulder to shoulder with retail customers’ IT teams to ensure their e-commerce systems have the scalability and reliability they need in that peak season, according to Tharp.

“We basically took that program and turned it on for this period of time for the grocers and the mass merchants who are really seeing rapid acceleration in their online traffic and lots of new customer acquisition,” Tharp said. “A lot of our grocers are having hundreds of thousands of new customer acquisitions of people who didn’t previously shop with them or perhaps ate out more predominantly, and so we’re making sure that all of their systems are able to bear those traffic surges they’re seeing now.”

Retail is one of six industries that Google Cloud has been targeting with industry-specific solutions since Thomas Kurian assumed CEO responsibilities last year. Its retail customers are tapping its vertical retail solutions focused on accelerating omni-channel sales and using data to help drive business and operational improvements, according to Tharp.

“We’ve taken the best of our tools that we have and are using all of our account resources, our customer engineers, our professional services, to do a lot of these rapid development, rapid migrations as needed,” Tharp said. “Things like our Contact Center AI have become very important, where we’re able to do rapid stand-ups of virtual agents to help some of these partners with pretty basic (customer) questions that are just overwhelming their call centers and their stores about what are your hours, do you have certain products in supply, trying to use the buy online, pick up at curbside (options).”

Google Cloud had to support Canadian supermarket chain Loblaws with extra capacity because the number of its consumers using its express grocery pickup tool has rapidly accelerated.

Helping Non-Essential Retailers

The surge for some retailers comes as other non-essential chains have seen a rapid decline in demand and been forced to temporarily shutter their non-essential businesses, and while some consumers are curtailing spending on discretionary items amid the shelter-in-place/stay-at-home edicts and the economic fallout of widespread job layoffs and furloughs due to the coronavirus.

“Holistically, across both sets of retailers, we’ve very much focused on generally what I call demand forecasting,” Tharp said, noting a focus on basic predictive analytics. “We’re living in a very uncertain time. We’re helping a lot of our customers use public data sources like some of the public reporting of coronavirus cases and different shelter-in-place orders to create behavioral models to try to understand where should they be shifting inventory, how should they be thinking about replenishment.”

Sixty-one percent of brick-and-mortar retail U.S. stores – 259,851 locations with combined store and online sales of $168 billion in April 2019 – currently are closed due to the coronavirus pandemic, according to GlobalData, a data analytics and consulting company. The figures exclude gasoline, foodservice, and auto sales establishments. GlobalData expects retail sales to decline 31.4 percent this month from April 2019.

“Online isn’t making up for all of the demand that they would typically experience in-store, so there we’re very much focused on helping them with cost management, managing the ramp-down of certain services that they’re not using as much, because cloud allows for a much more flexible cost baseline for those retailers to be operating on,” Tharp said.

Retailers may have to deal with potentially changed shopping dynamics when stores are allowed to reopen and consumer spending returns to more normal levels. Prior to the coronavirus pandemic, the over-stored industry already had been seeing retailers reducing their physical footprints as consumers were shifting more of their spending online.

The coronavirus pandemic likely will spur record store closures this year and potential retail consolidation, and retail bankruptcies are likely to spike, according to research analyst Ken Perkins of Retail Metrics. Neiman Marcus Group is preparing to file for bankruptcy protection as early as this week, and Lord & Taylor and J.C. Penney also are exploring bankruptcies, according to published reports.

“Every day there seems to be a stream of temporary store closure extensions, employee furloughs, executive salary reductions, tapping of revolving credit facilities, capital expenditure cuts, share buyback and dividend postponements or cancellations, rent forbearance or refusals to pay, guidance withdrawals and scrapping of new store openings,” Perkins said in a recent retail report. “Sadly, if store closures persist for some time, many are likely to become permanent, while a spate of bankruptcy filings from weaker players is not out of the realm of possibility.”

Google Cloud already is helping its retail customers predict what their store reopening ramp-ups could look like, according to Tharp. For the retailers that are quite busy right now, that includes how to keep that supply chain running efficiently, Tharp said. And for retailers that have ramped down, it includes when and how does business start picking back up and how they can ensure they’re prepared.

“The coronavirus crisis created a new version of crisis for retail,” Tharp said. “Typically, as a retail executive, you have scenarios that plan for sections of a country being shut down or certain nodes being shut down, perhaps from a natural disaster, and you could really adjust…around it. This dynamic has really created a different world, where essentially all of your stores are shut down, and you may not be able to operate some warehouses. It’s created a renewed focus on business continuity, and cloud capabilities are an example of a big part of that conversation. Rather than being worried about accessing IT resources and business resources on-premise, having a partner like Google who can really handle those things seamlessly (allows you to) be focused on your customer experience.”

Google Cloud’s first pillar of its retail strategy — helping retailers accelerate digital and omni-channel revenue growth and be less store-dependent, if needed – speaks to the need for retailers to consider store footprint adjustments, according to Tharp.

“We see all of that being very important coming out of this (coronavirus) crisis,” she said. “We also have a lot of capabilities to help rapidly reduce costs. As retailers are in a liquidity crisis…they’ll be looking through their entire P&L (profit and loss statement) and trying to understand where they can drive cost out so they can continue to focus on their core value proposition with the customer. That’s where migration to the cloud, rethinking your martech (marketing technology) stack…can help reduce costs, and things like our contact center capability…can help improve the efficiency and cost baseline there. We expect, coming out of the crisis, a lot of deep, more accelerated conversations on these capabilities that were relevant before but are now much more urgent to help shore up the retail P&L coming out of a very difficult period.”

COVID-19 as a Cybersecurity Threat Vector

During the COVID-19 pandemic, cybercriminals rapidly pivoted to exploit widespread anxiety about the disease. Phishing campaigns using coronavirus-themed lures became one of the most common attack vectors, targeting individuals and organizations alike. Google Cloud services — including Gmail, G Suite, and Chrome — became prime targets given their enormous user bases.

Google outlined both its own defensive measures and actionable guidance for administrators and end users to reduce exposure to these threats.

The Scale of the Problem

To understand why Google-level defenses matter, consider the volume of malicious traffic Gmail handles:

• Gmail blocks more than 100 million phishing emails every day, according to Google.
• In the week following Google’s April 2020 blog post, Gmail was hit with 18 million pieces of COVID-19-related malware and phishing emails.
• More than 240 million coronavirus-themed spam messages were being sent to Gmail users daily at peak.
• Google reported that 99.9% of spam, phishing, and malicious messages are stopped before reaching user inboxes.

The sheer volume of pandemic-themed attacks helped Google’s machine learning systems build better detection models — a rare silver lining of a damaging threat wave.

Common COVID-19 Phishing Tactics

Attackers used several recurring themes in coronavirus-related phishing campaigns:

• WHO impersonation: Emails impersonating the World Health Organization to solicit fraudulent donations or deliver malware.
• Remote work lures: Messages targeting employees newly working from home, often posing as IT support or VPN instructions.
• Government stimulus packages: Emails referencing small business relief funds to trick recipients into providing credentials or financial information.
• Stay-at-home order alerts: Fake official notices aimed at organizations adjusting to lockdown restrictions.

A key technique across all these campaigns is brand impersonation — making a malicious email look like it comes from a trusted authority (a government body, the WHO, or a familiar software vendor).

What Google Is Doing at the Platform Level

DMARC Implementation with the WHO

To combat WHO impersonation, Google worked directly with the World Health Organization to help implement DMARC (Domain-based Message Authentication, Reporting, and Conformance). DMARC is an email authentication protocol that lets domain owners specify how receiving mail servers should handle messages that fail SPF or DKIM checks. By hardening the who.int domain with a strict DMARC policy, it becomes significantly harder for attackers to send email that convincingly appears to come from that domain.

Safe Browsing API Integration

Any newly identified threat — malicious URL, malware distribution site, or phishing page — is fed into Google’s Safe Browsing API, which is shared across Gmail, Chrome, and other Google products. Safe Browsing warns users before they navigate to a flagged site or download a dangerous file, providing a cross-product defense layer.

Advanced Phishing and Malware Controls for G Suite

For G Suite (now Google Workspace) customers, Google automatically enables advanced phishing and malware controls. These controls analyze inbound messages for suspicious signals and then take one of three automated actions:

• Display a warning banner inside the email client
• Route the message to spam
• Quarantine the message for administrator review

What G Suite Administrators Should Do

Platform-level defenses are a starting point, not a complete solution. G Suite administrators should take the following steps:

• Review Google’s advanced phishing and malware protection settings in the Admin Console and confirm that recommended controls are enabled for your domain.
• Enable the security sandbox for G Suite, which executes suspicious email attachments in an isolated environment to detect previously unknown malware before it reaches users.
• Audit DMARC, SPF, and DKIM records for your own domain to prevent attackers from spoofing your organization’s email address to target your employees or partners.
• Monitor the Admin Console security dashboard for anomalies such as unusual login locations, large volumes of outgoing mail, or elevated quarantine counts.

What Individual Users Should Do

End users are the last line of defense. Google recommends the following practices:

• Complete a Security Checkup at myaccount.google.com/security-checkup to review connected apps, recent security events, and account recovery options.
• Avoid downloading unrecognized file attachments. Instead, use Gmail’s built-in document preview to inspect files without downloading them — this prevents malicious executables from running locally.
• Inspect URLs carefully before clicking. Phishing URLs often mimic legitimate domains by adding extra words, subdomains, or character substitutions (e.g., who-health.org instead of who.int). Hover over links to see the real destination before clicking.
• Report phishing emails using Gmail’s built-in reporting tool (the three-dot menu → “Report phishing”). This improves detection for all users.
• Enroll in Google’s Advanced Protection Program if you or your organization are at elevated risk (executives, IT staff, journalists, activists). Google stated that no enrolled user had been successfully phished at the time of the blog post, even when repeatedly targeted.

Understanding DMARC: A Quick Primer for DevOps Teams

If you manage DNS and email infrastructure for your organization, implementing DMARC correctly is one of the highest-impact steps you can take to prevent email spoofing. The three layers work together:

• SPF (Sender Policy Framework): A DNS TXT record that lists the IP addresses authorized to send email on behalf of your domain.
• DKIM (DomainKeys Identified Mail): Cryptographically signs outgoing messages so recipients can verify they haven’t been tampered with in transit.
• DMARC: Sits on top of SPF and DKIM. It tells receiving servers what to do when a message fails authentication — none (monitor only), quarantine, or reject — and provides aggregate reports so you can see who is sending email claiming to be from your domain.

A basic DMARC DNS record looks like this:

_dmarc.yourdomain.com. IN TXT "v=DMARC1; p=quarantine; rua=mailto:dmarc-reports@yourdomain.com"

Start with p=none to collect reports without affecting mail flow, then move to quarantine or reject once you’ve confirmed all legitimate sending sources are covered.

Key Takeaways

Crisis events consistently produce spikes in phishing activity because attackers exploit urgency and uncertainty. The COVID-19 pandemic was an extreme example, but the defensive principles apply to any themed phishing wave:

• Platform-level controls (Safe Browsing, advanced phishing filters) reduce bulk threats but cannot catch everything.
• DMARC authentication at the domain level prevents your brand from being weaponized against your own users and partners.
• User education and easy reporting mechanisms are essential complements to technical controls.
• High-risk users should use hardware security keys and enroll in advanced protection programs.

Iomart Sees Minimal COVID-19 Impact as Cloud Demand Holds Steady

Glasgow-based cloud computing and managed hosting company Iomart reported in early April 2020 that it had experienced “minimal change” to its business levels despite the disruption caused by the COVID-19 pandemic. In a trading update to investors, the company expressed confidence in its business model and outlined expectations for continued revenue growth, strong profitability, and solid cash generation.

Financial Year Results: March 2020

With a financial year ending 31 March 2020, Iomart said the timing meant the company experienced only limited exposure to the early effects of COVID-19. For the year to 31 March 2020, the company expected to report:

• Revenue: approximately £112 million, up from £103.7 million the prior year
• Adjusted underlying earnings (EBITDA): approximately £43 million, compared with £42.2 million previously
• Adjusted profit before tax: approximately £22.5 million, down slightly from £25.5 million
• Adjusted operating profit margin: approximately 22%, down from 25.7%, attributed to a change in revenue mix and increased investment in sales

Despite the margin compression, Iomart noted that its operating profit margin remained above the industry average — though no specific benchmark figure was provided in the announcement.

Why Iomart Saw Limited Disruption

Iomart’s relative insulation from the immediate economic shock came down to a few structural strengths of its business model:

• Diversified customer base: The company stated it was not significantly exposed to the industries most severely impacted by COVID-19 lockdowns.
• Online-first customers: The vast majority of Iomart’s customers operate online and were, if anything, expected to see increased demand for their own products and services during the pandemic — in turn supporting demand for Iomart’s hosting and cloud infrastructure.
• High recurring revenue: Cloud and managed hosting contracts typically generate predictable, subscription-style income, providing stability during economic uncertainty.
• Strong balance sheet and cash generation: The company’s cash position and cash flow profile gave it the ability to weather a period of uncertainty without immediate stress on operations.

The Cloud as a Pandemic-Era Accelerant

In its investor update, Iomart acknowledged broader uncertainty about how the remainder of calendar 2020 would unfold. The company noted that some IT investment decisions were likely to be delayed in the short term. However, it also highlighted the longer-term structural tailwind:

“While uncertainty exists over how calendar 2020 will unfold, with some IT investment decisions likely to be delayed in the short-term, it is clear that technology and the cloud will not lose relevance and indeed the situation we are all facing perhaps reinforces the journey to the cloud.”

— Iomart trading update, April 2020

This reflected a view widely held in the managed services and cloud infrastructure sector during 2020: that the forced shift to remote work, digital commerce, and online services would accelerate enterprise cloud adoption rather than stall it.

CEO Statement: Stability and Staff Welfare

Chief Executive Angus MacSween emphasised both the operational resilience of the business and the human dimension of managing through the crisis:

“At this time, our priority is to see our staff and all our customers through this emergency situation as unscathed as possible. I am proud of how the team have responded and how well our business continuity has functioned. While we may potentially see an impact on our customer base and trading in the coming months, overall the group benefits from high levels of recurring revenue, strong levels of cash generation, a strong balance sheet and a wide and large customer base.”

— Angus MacSween, CEO, Iomart

Outlook and Ongoing Monitoring

Iomart stated it would continue to monitor the evolving situation and committed to providing a further trading update alongside its audited financial results. The company was candid that the eventual impact on its customer base remained uncertain at the time of the announcement — an honest position given the pace at which the pandemic was unfolding in late March and early April 2020.

For DevOps and infrastructure teams evaluating cloud providers, Iomart’s trading update underlined a broader lesson from the pandemic period: managed cloud and hosting businesses with diversified, online-native customer bases and high recurring revenue were structurally better positioned to absorb demand shocks than providers heavily reliant on on-premises hardware sales or single-vertical customer concentration.

About Iomart

Iomart is a Glasgow-based cloud computing, managed hosting, and connectivity company listed on the AIM market of the London Stock Exchange. It provides infrastructure-as-a-service, managed security, connectivity, and cloud solutions primarily to UK businesses.

The Pandemic Accelerated Cloud Adoption Overnight

By early April 2020, the majority of Americans were under stay-at-home orders as COVID-19 cases climbed sharply. With lockdowns extended and offices closed, organizations scrambled to keep employees productive from home. That shift put cloud computing platforms at the center of business continuity planning almost overnight.

Remote work, video conferencing, distributed collaboration, and secure access to corporate data all depend on cloud infrastructure. The sudden, large-scale transition to working from home stress-tested these platforms — and demonstrated why cloud adoption had become a strategic imperative rather than a nice-to-have.

Why Cloud Infrastructure Proved Essential During Lockdowns

Cloud computing gave organizations capabilities that on-premises infrastructure simply could not match during a rapid, unplanned transition to remote work:

• Elastic scalability: Companies could rapidly provision additional compute and storage capacity without purchasing hardware, allowing IT teams to support a workforce that moved home in days rather than months.
• Anywhere access: Cloud workloads run in data centers and stream to any device with an internet connection, removing the dependency on a physical office network.
• Built-in security: Features such as identity-based access control, encryption at rest and in transit, and multi-factor authentication helped organizations maintain security posture even as the attack surface expanded.
• Device independence: Because processing happens in the cloud, employees could use personal laptops or home machines without overburdening local hardware or exposing sensitive data locally.
• Cost flexibility: The consumption-based pricing model meant organizations could pay for what they used rather than over-provisioning owned infrastructure.

Cloud servers also handle mission-critical applications centrally, reducing the storage and processing burden on individual endpoint devices — an important consideration when many workers were using personal equipment not designed for intensive workloads.

Five Cloud Providers in Focus (April 2020 Context)

As the remote-work trend accelerated, analysts and investors focused on cloud computing companies positioned to benefit from increased demand. The following five providers were highlighted at the time for their platform capabilities and responses to the crisis.

1. Alibaba Cloud (Alibaba Group — BABA)

Alibaba’s cloud division, Alibaba Cloud, offered AI-powered computing infrastructure and made its supercomputing cluster available free of charge to global research institutions. The goal was to accelerate COVID-19-related workloads including viral gene sequencing and protein screening — computationally intensive tasks that benefit enormously from elastic cloud resources.

Alibaba Cloud’s broader platform provides tailored cloud solutions across computing, storage, networking, and AI services, primarily serving the Asia-Pacific market but with growing global infrastructure.

2. Amazon Web Services (Amazon — AMZN)

Amazon Web Services remained the largest public cloud provider by market share during this period. AWS responded to the pandemic in part through its AWS Diagnostic Development Initiative, an announced $20 million program aimed at accelerating the development of COVID-19 diagnostic solutions using cloud-based tools.

AWS also continued expanding its security portfolio. The launch of Amazon Detective — a service that aggregates AWS log data and applies machine learning, statistical analysis, and graph theory to investigate potential security incidents — was relevant to organizations rapidly expanding their cloud footprint with less time for careful security review.

3. Microsoft Azure (Microsoft — MSFT)

Microsoft Azure underpins many of Microsoft’s collaboration and productivity tools, including Microsoft Teams. By early April 2020, Teams was reported to have more than 44 million daily active users generating over 900 million meeting and calling minutes per day — figures the company said represented more than double the usage seen four months earlier, before the Wuhan outbreak began.

Azure’s ability to scale Teams’ infrastructure rapidly under that demand was a real-world demonstration of cloud elasticity. Enterprises using Azure could also scale development environments, virtual desktops, and data storage as their remote workforce expanded.

4 & 5. Additional Cloud Providers

The original source referenced two additional cloud-focused companies beyond the three detailed above. Because the source article was a teaser without full details on those companies, they are not named here to avoid misattribution. Other cloud providers prominently discussed during the same period — including Google Cloud, Salesforce, Zoom, and Slack — all saw significant demand increases tied to the remote-work shift.

What the Remote-Work Surge Revealed About Cloud Maturity

The COVID-19 lockdown period served as an unplanned but highly instructive stress test for cloud platforms globally. Several operational realities became clear:

• Collaboration tools need backend scale: Video conferencing and real-time document collaboration consume far more bandwidth and compute than traditional SaaS applications. Providers that had invested in global edge infrastructure handled the surge better.
• Security cannot be an afterthought: Rapid remote-work rollouts created new attack surfaces. Cloud providers that offered integrated identity management, zero-trust networking, and threat detection had a meaningful advantage.
• Multi-cloud and hybrid architectures showed their value: Organizations with workloads spread across providers or with hybrid on-premises and cloud setups had more flexibility to shift capacity where it was needed.
• Consumption-based pricing created budget pressure: While elasticity was an asset operationally, organizations that had not implemented cloud cost management practices saw unexpected bill increases as usage spiked.

Long-Term Impact on Cloud Adoption

The pandemic permanently accelerated cloud adoption timelines for many enterprises. Projects that had been planned over multi-year horizons were compressed into months. IT leaders who had been cautious about moving workloads off-premises found themselves with no practical alternative during lockdowns.

From a DevOps perspective, the remote-work surge also reinforced the value of cloud-native practices: infrastructure as code, CI/CD pipelines accessible from anywhere, containerized workloads that are portable across environments, and observability tooling that does not require physical access to servers. Teams with mature DevOps practices were able to support their organizations through the transition far more smoothly than those still dependent on manual, on-premises processes.

Important Caveats for Readers

This article is a retrospective analysis of cloud computing dynamics during the early COVID-19 period. All financial figures, earnings projections, stock rankings (including Zacks rankings referenced in the original source), and usage statistics cited reflect conditions in early April 2020 and are not current. This content is provided for technical and historical context only and should not be interpreted as investment advice.

Paymentsense  is one of Europe’s fastest growing fintech companies, offering small businesses an affordable payment processing service and software. It currently has 70,000 customers, processes approximately £10 billion of sales every year, along with 250 million transactions annually.

Up until recently Paymentsense mostly managed the relationship with its customers and was essentially a sales/service organisation, whilst another separate financial services organisation did the acquisition and core processing. However, Paymentsense has since applied to the FDA to become an e-money institution in its own right, which will allow it to acquire payment transactions to issue credit cards, hold money on behalf of the customer in an e-wallet, and actually do the payment processing itself.

This shift pushed Paymentsense to think about its technology estate and migrate its systems to Google Cloud Platform (GCP). The company had been operating from a monolithic application in a data centre. However, it has since boosted its developer productivity and improved its agility by shifting to a microservices model on GCP (although it is still in the migration phase). This has proven to be particularly beneficial during the worsening Coronavirus pandemic, as Paymentsense has had to quickly deploy services that could benefit many of the restaurants, cafes and small businesses using its platform (but more on that later).

We got the chance to speak to Nick Fryer, CTO of Paymentsense, about both the company’s shift to GCP and microservices, as well as its Coronavirus response. Fyer explained Paymentsense’s motivation for moving to the public cloud. He said:

[Gaining FDA approval] was a big investment for us, and it now means we are a heavily regulated business. That meant that we rebuilt all our systems and built new front ends. That prompted the move to Google Cloud. All the systems that we had before to help our customers onboard were completely rebuilt. And at that point we decided to migrate everything to Google Cloud.

Paymentsense started the rebuild in January 2019 and although currently only has a small number of customers in the new environment, it has now built enough systems in GCP to operate its business. It has paused migration for the time being, due to the COVID-19 pandemic, but is ready to onboard thousands of customers once lockdown in the UK is lifted.

Fryer explained that in 2016 Paymentsense rebuilt all of its systems to be service-based, but that they ultimately were underpinned by one big database and a big lump of code. He said:

When we released it, it was a small lump of code. But three or four years later, because we had some good CI/CD in place and we were doing up to 20 production releases a day, that small lump of code became a big lump of code. Build times were becoming very slow, the ability to modify became quite complicated, our automated tests were taking long periods of time. So our CI/CD pipeline was getting slow and slower.

So our main motivation wasn’t to move to the cloud, it was to break up our big monolithic system into multiple services. It’s only as we were looking for options to do this that moving to the public cloud was the easiest and most effective way of making that happen. That’s because there were a load of services provided by Google out of the box, that otherwise we would have to build and maintain ourselves.

A new level of agility

Fryer gave an example of how moving to the public cloud has simplified Paymentsense’s infrastructure needs. He said that the company had been planning to use Kafka as a messaging system, to enable its new services to talk to each other. Fryer’s original plan was to keep on Paymentsense’s original infrastructure that it had already bought and paid for, run a load of VMs and then install the various infrastructure services.

However, Paymentsense found that this model proved to be difficult, as when Kafka was deployed it was a massive resource hog – even as a relatively small, simple version. However, this wasn’t the case on GCP. Fryer said:

We started looking at Google and the services they had to offer.You soon realise that you can have something that’s very usable and pretty much infinitely scalable.

We don’t have to have 10 massive VMs, huge storage, and a whole load of management to manage our messaging infrastructure, which was the minimum requirement. We can just click a button and we’ve got the same thing – probably better – and it’s very, very cheap. It was a total no brainer.

The whole monolithic approach was becoming horrifically damaging to our developers’ efficiency. We were losing people over it. People were so fed up of having to deal with it. So we knew we had to do something.

Responding to COVID-19

The current global health crisis – the Coronavirus pandemic – has unsurprisingly impacted Paymentsense’s customers quite hard, given that so many of them are small business owners, running cafes and restaurants. However, because Paymentsense has become significantly more agile in the cloud with GCP, it was able to respond quickly and offer solutions to support its customers. Fryer said:

To tie it into COVID-19, as an example. We have implemented a couple of systems recently, where within a week we developed a way of integrating to a business funding site – a site that lends money to businesses and then you repay it through your card’s takings. So we implemented a whole business process on Google Cloud using our new platform and infrastructure, which is really quite complex and thorough, in the space of a week. We would never have been able to do that in the old world.

We have also developed a kind of ‘Deliveroo Lite’, which is very simple. But we’ve done something that works for some of our restaurant and cafe customers, which allows them to become a takeaway overnight. We turned it around really quickly and it’s good, it’s reliable and it works really well.

The key thing that we can do now is that we get much better developer efficiency. People are spending much more time writing business logic, writing code, rather than on plumbing nonsense. So it allows us to be more agile and be more responsive to our customer’s desires. This recent drama has highlighted how quick it is – we have implemented so much over the past week from scratch, from a standing start. It’s borderline miraculous. We are being proactive to our customers’ needs.

Why GCP?

It is generally accepted in the public cloud infrastructure market that AWS and Azure are the front runners, with Google Cloud Platform making big investments – and key hires – to appeal more to the enterprise market.

As such, I was keen to get Fryer’s take on why Paymentsense opted for GCP over the likes of AWS. Simply put: GCP offered Paymentsense better client management and support during its projects. Fryer said:

AWS was the default position I guess, as the established player with the most mature toolset. And we actually implemented the first production system with them. But we had no support or help from AWS at all, it was all on our own. The occasional ticket might get responded to, but there was no architectural design help and there was no-one proactively offering help.

Google came along to us and said, ‘Why don’t you work with us?’. They said they’d supply us with an architect, someone who can explain how it should all be built. And that’s what they did and it was a massive deal for me. For Google to come along and give us assistance in how we should be designing our systems and implementing our work on their platform was really useful.

Also, at the time, we were a tiny customer, we weren’t spending a great deal of money. But they saw the potential and put the effort in to win us as a customer. Now we are spending a reasonable amount of money, which was as a result of them looking after us as a customer. We had someone who could answer technical questions on the end of the phone, pretty much whenever we wanted them. And that was really valuable.

Hyperscale Spending Hit a Record High Before the Pandemic Struck

Even as the COVID-19 pandemic began disrupting enterprise IT budgets in early 2020—delaying hardware purchases, canceling events, and freezing discretionary spend—the world’s largest cloud and internet companies showed no signs of pulling back on data center investment. According to Synergy Research Group, hyperscale capital expenditure (capex) on data centers reached an all-time high of over US$120 billion in 2019, with a record-breaking fourth quarter alone exceeding US$32 billion.

The top five hyperscale spenders in 2019 were Amazon, Google, Microsoft, Facebook, and Apple, whose data center budgets dwarfed all other operators. Other significant spenders included Alibaba, Tencent, IBM, JD.com, Baidu, and Oracle.

Data Center Spend Rose 11% Even as Overall Capex Stayed Flat

A notable nuance in the Synergy data: while total hyperscale operator capex grew only 1% year-over-year in 2019, spending specifically directed at data centers jumped 11% compared to 2018. This distinction matters—it signals that these companies were actively prioritizing physical infrastructure investment even when tightening spending in other areas.

As of the end of 2019, Synergy counted 512 hyperscale data centers in production worldwide, with further growth anticipated through 2020 despite the pandemic.

Why Cloud Giants Are Better Insulated Than Other Industries

John Dinsdale, Chief Analyst at Synergy Research Group, explained the reasoning directly:

“While there are many unknowns, what is clear is that the hyperscale operators generate well over 80 percent of their revenues from cloud, digital services and online activities. The radical shifts we are seeing in social and business behavior will actually provide some substantive tailwinds for many of these businesses. These hyperscale firms are much better insulated against the current crisis than most others and we expect to see ongoing robust levels of capex.”

John Dinsdale, Chief Analyst, Synergy Research Group

The logic is straightforward from a DevOps and infrastructure perspective: the mass migration to remote work, video conferencing, online collaboration, e-commerce, and digital entertainment all run on cloud infrastructure. Demand spikes across these categories directly benefit providers like AWS, Google Cloud, and Microsoft Azure—and justify continued investment in capacity.

What Hyperscale Data Centers Actually Look Like

For context, the majority of hyperscale capex goes toward building, expanding, and equipping hyperscale data centers—massive facilities housing tens of thousands of physical servers alongside millions of virtual machines. These aren’t typical enterprise data centers. They are purpose-built campuses designed for extreme density, power efficiency, and redundancy, often spanning hundreds of thousands of square feet.

Synergy’s analysis tracked the capex and physical footprint of 20 of the world’s largest hyperscale operators across SaaS, e-commerce, social networking, IaaS, and PaaS categories. In aggregate, those 20 companies generated nearly US$1.4 trillion in revenue in 2019, up 13% from 2018.

The Broader Industry Picture: COVID-19’s Uneven Impact on IT

Not every segment of the technology industry was as well-positioned. Dell Technologies CEO Michael Dell, speaking to CRN at the time, acknowledged the unprecedented nature of the disruption:

“Having done this for 35 years or so, I’ve seen a lot of things. There’s been nothing really like this. So the whole work-from-home movement is something our customers need a lot of help with. Customers and partners need us more than ever.”

Michael Dell, CEO, Dell Technologies

Traditional IT hardware vendors, on-premises data center equipment suppliers, and event-dependent businesses faced steep headwinds. The contrast with hyperscale operators was stark: the same pandemic conditions that hurt one group provided demand tailwinds for the other.

Key Takeaways for DevOps and Infrastructure Teams

• Cloud demand is crisis-resilient. Workloads that depend on cloud infrastructure tend to accelerate during disruption events—remote work tooling, video, streaming, and e-commerce all surge when physical movement is restricted.
• Hyperscale investment signals long-term capacity planning. Data center construction cycles are measured in years. Continued 2020 capex commitments meant these providers were building for 2022 and beyond, not reacting to a single quarter.
• Revenue diversification across cloud service tiers matters. Providers spanning SaaS, IaaS, and PaaS have multiple revenue streams that collectively absorb economic shocks better than single-segment businesses.
• The hyperscale footprint keeps growing. With 512 hyperscale facilities already in production as of end-2019 and more planned, the physical backbone of modern cloud infrastructure was expanding regardless of macroeconomic turbulence.

Original reporting by CRN Australia, citing Synergy Research Group data published March 2020.

COVID-19 Drives Cloud Provider Response Efforts

The COVID-19 pandemic dominated storage and cloud industry news in March 2020, with several major vendors committing funding, software, and infrastructure to support pandemic research and remote-work continuity.

Rackspace: $10M in Free OpenStack Cloud Hosting

Rackspace launched a dedicated COVID-19 response page providing access to experts, resources, and services for affected customers. As part of that effort, the company committed $10 million in no-cost OpenStack public cloud hosting resources over six months for organisations participating in COVID-19 response efforts. Additionally, existing customers were offered the ability to add Microsoft Teams to their Office 365 accounts at no charge for six months.

AWS: $20M Diagnostic Development Initiative

Amazon Web Services launched the AWS Diagnostic Development Initiative, committing $20 million to accelerate COVID-19 research, diagnostics, and testing. The programme targeted accredited research institutions and private entities using AWS to support the development of point-of-care diagnostics — tests that can be performed at home or in a clinic with same-day results. At launch, 35 global research institutions, startups, and businesses were participating in the initiative.

Nvidia: Free Parabricks Genome-Sequencing Software

Nvidia made its Parabricks genome-sequencing software available at no charge to researchers sequencing the coronavirus genome and the genomes of COVID-19 patients. Parabricks is capable of reducing variant calling time for an entire human genome from approximately two days to roughly one hour on a single server — a significant acceleration for time-sensitive pandemic research.

COVID-19 Disrupts HDD Manufacturing in Malaysia and the Philippines

Wells Fargo analyst Aaron Rakers reported that hard disk drive manufacturing faced meaningful risk of disruption due to government-imposed closures in Malaysia and the Philippines. The HDD supply chain has significant manufacturing concentration in both countries, with major players including Seagate, Western Digital, Showa Denko, Furukawa, and Nidec all operating there. Rakers noted that affected companies were likely pursuing provincial government waivers to continue operations.

Huawei Posts Sixth-Best SPC-1 Benchmark Result

Huawei recorded the sixth-best SPC-1 benchmark result at the time, using an OceanStor 5310 V5 array to achieve 1,600,658 SPC-1 IOPS. The SPC-1 benchmark measures storage system responsiveness in terms of IOPS, overall response time, and price-performance (expressed as $/K-IOPS).

The OceanStor 5310 V5 posted a 0.68 millisecond response time. For comparison, the NetApp A800 achieved 0.59ms and a DataCore Parallel Server reached 0.28ms. Huawei published pricing in Chinese currency only; when converted to US dollars, the system’s price-performance came in at approximately $0.44 per IOPS — competitive with the top performers in the category, beaten only by two DataCore systems and a Huawei FusionStorage array.

Acronis Deploys Western Digital JBODs Across 14 Data Centres

Data protection and security company Acronis standardised on Western Digital Ultrastar Data60 and Data102 JBODs (Just a Bunch of Disks) across its 14 global data centres. The choice was driven by high-density capacity requirements and long-term expansion plans.

Both the Ultrastar Data60 and Data102 are 4U, high-density, high-capacity 12Gbit/s SAS enclosures:

• Ultrastar Data60: Supports up to 60 × 3.5-inch HDDs, with up to 900TB raw capacity.
• Ultrastar Data102: Supports up to 102 × 2.5-inch HDDs, with up to 1.5PB raw capacity.

Up to 24 drives in each enclosure can be SSDs. Western Digital highlighted anti-vibration and thermal zone cooling technology designed to improve long-term reliability in dense deployments.

Alex Beyk, Director of Global Technical Operations at Acronis, said: “With Western Digital, we’re getting a storage solution that we can trust, with a total cost of ownership that other storage vendors could not match.”

Code42 Adds Free Remote Worker Data Loss Detection

Insider threat detection vendor Code42 released new capabilities — free for 60 days — designed to help security teams identify suspicious data activity among remote employees. The move addressed a sharp increase in remote work triggered by COVID-19 lockdowns.

The new functionality included:

• Pinpointing remote employees whose file activity represents the greatest data risk.
• Detecting unauthorised use of cloud sync services including Dropbox, iCloud, Box, OneDrive, and Google Drive.
• Providing an organisation-wide view of browser upload activity, including personal email attachments and uploads to personal cloud services.
• Alerting security teams to risky file activity based on file type, count, and size.
• Offering historical user activity profiles to accelerate insider threat investigations.

Code42 CEO Joe Payne noted: “Suddenly security teams are on the hook to manage a spike in data activity that now lives outside their typical network infrastructure. What they had visibility into last week is invisible this week.”

Industry Shorts

ATTO FastFrame 3 NICs and 360 Software

ATTO claimed that Ethernet storage networks can be fully optimised within minutes when built with its FastFrame 3 Ethernet NICs and managed by its 360 Tuning, Monitoring and Analytics Software.

CTERA Reports 60% ARR Growth in 2019

Cloud file storage gateway and security supplier CTERA reported a 60% year-over-year annual recurring revenue increase for 2019. The company said its product is deployed in more than 50,000 enterprise locations across 110 countries.

iXsystems Unifies FreeNAS and TrueNAS

iXsystems announced a unification of its FreeNAS (open-source) and TrueNAS (enterprise) storage products. The two already shared the vast majority of their codebase. With the 11.3 release, TrueNAS gained feature parity with FreeNAS including VM and Plugin support. The planned 12.0 release (scheduled for the latter half of 2020) would merge both into a single software image under the TrueNAS name:

• TrueNAS CORE: The free, open-source version.
• TrueNAS Enterprise: The paid, commercially supported version.

Snowflake Integrates with Adobe Campaign

Cloud data warehouse provider Snowflake released a Federated Data Access (FDA) connector for Adobe Campaign, part of Adobe Experience Cloud. The integration enables Adobe Campaign users to extend marketing data into Snowflake for real-time campaign analytics without additional management overhead.

Yellowbrick Data Partners with Digital Outcomes Now

On-premises and cloud data warehouse vendor Yellowbrick Data signed a partnership with telco systems house Digital Outcomes Now. The partnership targets the emerging 5G analytics opportunity. Digital Outcomes Now CEO John Gillespie described Yellowbrick as able to process complex analytic queries at more than 100× the performance of traditional systems in approximately 1/20th the rack space — though these figures are vendor-supplied and have not been independently verified.

Netlist Files New Patent Infringement Proceedings Against SK Hynix

Netlist filed new legal proceedings for patent infringement against SK Hynix RDIMM and LRDIMM memory products in the U.S. District Court for the Western District of Texas. The action followed an October 2019 International Trade Commission (ITC) Initial Determination finding that SK Hynix infringed Netlist’s standard-essential ‘907 patent. The ITC had set a target date of April 7, 2020 for its Final Initial Determination.

Quantum Spatial Standardises on Igneous for Petabyte-Scale File Management

US geospatial data mapping firm Quantum Spatial selected hyperscale file data management supplier Igneous as its standard platform. Carl Lucas, VP of Information Technology at Quantum Spatial, cited the need to move petabytes of data monthly as a primary driver, noting that Igneous’s SaaS-based monitoring provided real-time alerts for data pipeline issues.

StorONE and SQream Partner on GPU-Accelerated Analytics

Software-defined storage vendor StorONE partnered with GPU-accelerated analytics provider SQream to deliver a high-performance analytics offering. The integration allows SQream DB to saturate a multi-node parallel file system over 100GbE using StorONE’s S1 Enterprise Storage Platform, ensuring that the Nvidia Tesla V100 GPUs used by SQream are fully utilised.

Zadara and Veeam Deliver Backup-as-a-Service

Virtual storage array provider Zadara partnered with backup vendor Veeam to deliver a fully OpEx-based backup-as-a-service model. The joint offering targets organisations seeking to improve ransomware defences and data availability without disruptive infrastructure changes.

Context: A Market Turning Risk-Off

In early March 2020, global equity markets were in the grip of COVID-19-driven volatility. As the virus spread across international borders and governments began declaring states of emergency — California being among the first in the U.S. — investors rapidly shifted from risk-on to risk-off positioning. Growth-oriented technology stocks bore the brunt of that sentiment shift, and VMware (NYSE: VMW) was no exception.

The timing could hardly have been worse for VMware. The company had just reported mixed fourth-quarter results, and broader market fear was stripping investors of any appetite for speculative or transitional growth stories.

VMware’s Q4 Earnings: A Mixed Picture

VMware’s Q4 revenue came in at approximately $3.07 billion, ahead of analyst consensus estimates of around $2.95 billion — an 11% year-over-year increase. On the surface, that’s a solid top-line result.

However, earnings per diluted share landed at $2.05, falling short of the analyst target of approximately $2.17. In a calm market, a modest EPS miss alongside a revenue beat might have been forgiven. In the context of COVID-19-driven fear, it was enough to accelerate selling pressure on VMW shares.

The Underlying Transition Story

The earnings shortfall wasn’t entirely surprising given what VMware had been doing with its capital. The company had been investing heavily in pivoting away from its legacy on-premise virtualization business — centered on its flagship vSphere platform — toward cloud computing and hybrid cloud services.

A notable example of this strategic spending was VMware’s $2.7 billion acquisition of Pivotal Software, a cloud-native application development platform. Acquisitions of this scale compress near-term earnings, but are intended to position a company for longer-term growth in a market increasingly dominated by cloud-native workloads.

The challenge VMware faced was that it was competing for cloud workloads against hyperscalers with far greater resources: Amazon Web Services (NASDAQ: AMZN) and Microsoft Azure (NASDAQ: MSFT). Corporate transitions of this magnitude take time and carry meaningful execution risk — a variable investors were unwilling to accept during a period of acute macroeconomic uncertainty.

The Valuation Argument: Cheap But Contested

Some analysts at the time argued that VMware was undervalued on a free cash flow basis. An implied free cash flow yield of around 7.5% compared favorably to peers such as ServiceNow (NYSE: NOW) at approximately 1.6% and Arista Networks (NYSE: ANET) at roughly 6.4% on a last-twelve-months basis. These figures were cited by InvestorPlace contributor Mark R. Hake, CFA, in analysis published around this period.

On pure valuation metrics, the bull case for VMW had merit. But valuation arguments rarely carry the day in a fear-driven market. Cheap stocks can always get cheaper when sentiment deteriorates sharply.

The Double-Edged Sword: Macro Risk Meets Transition Risk

What made VMware particularly difficult to own in this environment was the compounding of two separate risk factors:

• Macro risk: A global recession threat triggered by the pandemic created broad-based selling pressure across equities, with growth and transitional names hit hardest.
• Execution risk: VMware’s multi-year pivot from on-premise virtualization to cloud services was still in progress, with profitability temporarily suppressed by acquisition and integration costs.

Investors faced a situation where both variables were working against them simultaneously. The instinct to reduce exposure to uncertain situations — rather than average down — is rational in a risk-off environment.

The IBM Comparison: Dividends and Defensive Positioning

A telling market signal at the time was the relative performance of IBM (NYSE: IBM). Despite IBM being both a partner and a competitor to VMware in cloud infrastructure, IBM shares were trading roughly flat for the year while VMW had shed more than 18% over the same period.

Several factors explained the divergence. IBM paid a dividend — a feature that provides downside cushion and attracts income-focused investors who remain in equities during volatile periods. VMware did not pay a dividend. IBM also carried the perception of being a more established, defensive enterprise technology name, even as it pursued its own aggressive cloud strategy following the Red Hat acquisition.

An additional structural consideration: Dell Technologies (NYSE: DELL) held an approximately 81% ownership stake in VMware at the time. While this relationship provided strategic support, it also introduced a layer of corporate complexity that risk-averse investors preferred to avoid.

Risk-Off Markets and the Limits of a Growth Story

A useful signal of just how sharply market psychology had shifted was the renewed interest in gold. Having been largely out of favor for years, gold became a sought-after safe haven during the early weeks of the pandemic selloff. When investors flee to gold, it signals that even conservative equity strategies are being abandoned in favor of capital preservation.

In this environment, the strongest investment thesis in the world struggles to find buyers. VMware’s case — undervalued, strategically pivoting, with cloud tailwinds — was a perfectly reasonable growth story in calmer times. In March 2020, it was simply the wrong kind of story for the moment.

Key Takeaways for DevOps and Technology Investors

• Transition risk is real: Moving from a dominant on-premise product (vSphere) to a contested cloud market is a multi-year, capital-intensive process. Earnings compression during that phase is expected but creates vulnerability during market downturns.
• Valuation metrics have context: A low FCF yield or high free cash flow yield is only meaningful if the market believes the cash flows are durable. In a recession scare, that assumption gets challenged.
• Corporate structure matters to investors: Majority ownership by Dell and the absence of a dividend were factors that reduced VMW’s attractiveness to defensive investors during the selloff.
• Market timing compounds fundamental analysis: Even a sound long-term thesis can face severe near-term drawdowns when macroeconomic conditions deteriorate rapidly.

This analysis reflects market conditions and publicly available information from early March 2020. It does not constitute financial advice. VMware has undergone significant corporate changes since this article was originally written, including its acquisition by Broadcom. Readers should consult current sources before making any investment decisions.