Migrating to cloud-based infrastructure and software offers organisations greater flexibility, predictability and scale. The transformative power of cloud-based solutions ingrains the companies offering these services into their clients’ business operations, while offering clients enhanced productivity and improved cost control. Yet the business world has yet to fully adopt cloud computing, though there has been something of a boost in 2020 with the economic disruption caused by COVID-19.

In a year when official bodies variously expect GDP to fall by between 11% and 12.5%, growth in cloud computing revenues of 14% represents a strong performance. While the market has been boosted by some of the measures introduced to contain COVID-19 (such as encouraging remote working), the growth is also partially offset by end user casualties. However, the pay-as-you-go, scalable model of cloud computing is ideally suited to the economic uncertainties that were already evident as a result of the issues surrounding Brexit.

Cost reduction remains the key purchase consideration for cloud computing adoption, but there are many other benefits, with the issue of scalability particularly attractive in 2020. Companies have had to rapidly adapt to new conditions, and the cloud has been a major facilitator of adaption.

At a global level, the industry is dominated by four major providers: AWS, Microsoft Azure, Google Cloud and Alibaba Cloud, which are believed to command a combined 62% of the market in 2020, having slightly increased their share in the year. There are, however, other notable high growth companies and niche players active in the sector.

• The stimulus to the cloud computing market caused by measures to restrict COVID-19

• Why the market remains in strong growth and how this is being accelerated by COVID-19

• The different types of cloud usage and the way these clouds are integrating

• How different cloud revenue streams are performing

• How the industry is led by the American technology giants

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential stores on 20^th March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23^rd March. Initially, a three-week timeframe was put on the measures, which was extended in mid-April for another three weeks.

The Health Protections Regulations 2020 came into effect on 15^th June allowing the reopening of all non-essential stores in England, as well as the mandatory use of face coverings on public transport. Pubs, restaurants, hotels and hairdressers were able to reopen on 4^th July, with many beauty businesses following on 13^th July.

From 24 July, it became mandatory to wear face coverings in shops and supermarkets. Rules on travel remain fluid: from 10 July, travellers from more than 50 “low risk” countries no longer had to self-isolate for 14 days, but on 28 July the removal of Spain from this list of low-risk countries dominated headlines in the UK, and by August further countries (including France) had been removed.

On 9 September, new guidelines were announced in England as a reaction to rising numbers of COVID-19 cases. The major change was a tightening of restrictions on social contact, with people only allowed to socialise with groups of up to six people who they don’t live with.

This was followed by a new wave of nationwide restrictions announced on 22 September, including limits on opening hours for pubs, bars and foodservice outlets; a recommendation that people work at home if possible; and stricter regulations on when face coverings must be worn. On 14 October 2020, following a rising ‘second wave’ of infections, the government introduced a three-tier system of restrictions across England; with medium, high and very high alert levels. Those in the ‘very high’ tier were advised to avoid travelling outside of their area. On 5 November 2020, these tiers were replaced with an England-wide lockdown, initially in place until 2 December. This included restrictions on domestic and overseas travel, except for essential work purposes. As of 1 November, Scotland had its own five-tier system of restrictions but no national lockdown had been introduced, whilst Wales introduced a short ‘firebreak’ lockdown from 23 October to 9 November.

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its July 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP could fall by 12.4% in 2020, recovering by 8.7% in 2021, and that unemployment will reach 11.9% by the end of 2020, falling to 8.8% by the end of 2021.

The current uncertainty, however, means there is wide variation on the range of forecasts, which is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

This report is concerned with cloud computing, which is defined as a type of computing that relies on sharing computing resources, rather than having local servers or personal devices to handle applications. In cloud computing, the word cloud (also frequently phrased as "the cloud") is used as a metaphor for "the internet", so the phrase cloud computing could also be defined as "a type of internet-based computing" where different services, such as servers, storage and applications, are delivered to an organisation’s computers and devices through the internet. Effectively, cloud computing is taking services outside of a company or organisation’s firewall or shared systems.

The goal of cloud computing is to apply high-performance computing power - normally used by military and research facilities - to perform tens of trillions of computations per second in consumer-oriented applications such as financial portfolios; to deliver personalised information; to provide data storage; or to power large, immersive online computer games. To do this, cloud computing uses networks of large groups of servers - typically running low-cost consumer PC technology with specialised connections - to spread data-processing chores across them. This shared IT infrastructure contains large pools of systems linked together, and virtualisation techniques are often used to maximize the power of cloud computing.

Cloud computing is gaining mass appeal in corporate data centres as it allows them to operate like the internet, enabling computing resources to be accessed and shared as virtual resources in a secure and scalable manner. The benefits of cloud computing for small and medium size enterprises (SMEs) are currently driving adoption. There is often a lack of time and financial resources in the SME sector to purchase, deploy and maintain infrastructure, such as software, servers or storage. In cloud computing, small businesses can access these resources, and expand or shrink services as their business needs change. The common pay-as-you-go subscription model is designed to let SMEs easily add or remove services, creating cost competitiveness since companies are only paying for what they use.

Cloud computing denotes a cloud computing platform that is outside of an organisation’s firewall on shared systems. In this scenario, the cloud service provider is in control of the infrastructure. A private cloud is the same platform but implemented within the corporate firewall, under the control of the organisation’s IT department. A private cloud is designed to offer the same features and benefits of public cloud systems, but removes a number of objections to the cloud computing model, including control over corporate and customer data, worries about security, and issues connected to regulatory compliance.

Private cloud services are delivered from a business’s data centre to internal users. This model offers versatility and convenience, while preserving management, control and security. Internal customers may or may not be billed for services through an IT chargeback.

In the public cloud model, a third-party provider delivers the cloud service over the internet. Public cloud services are sold on-demand, typically by the minute or hour. Customers pay for the CPU cycles, storage or bandwidth they consume.

Hybrid cloud is a combination of public cloud services and on-premise private clouds, with orchestration and automation between the two. Companies can run mission-critical workloads or sensitive applications on the private cloud, while using the public cloud for major workloads that need to scale on-demand. The goal of a hybrid cloud is to create a unified, automated, scalable environment, which takes all of the advantages of public cloud infrastructure, while maintaining control over mission-critical data.

Although cloud computing has changed over time, it has always been divided into three broad service categories: infrastructure as a service (IaaS), platform as a service (PaaS) and software as service (SaaS).

IaaS providers supply a virtual server instance and storage, as well as application program interfaces (APIs) which let users migrate workloads to a virtual machine (VM). Users have an allocated storage capacity, and can start, stop, access and configure the VM and storage as desired. IaaS providers offer small, medium, large, extra-large, and memory- or compute-optimized instances, in addition to customized instances for various workload needs.

In the PaaS model, providers host development tools on their infrastructures. Users access those tools over the internet using APIs, web portals or gateway software. PaaS is used for general software development, and many PaaS providers host the software after it’s developed.

SaaS is a distribution model that delivers software applications over the internet; often called web services. Users can access SaaS applications and services from any location using a computer or mobile device with internet access.

Unified communications can also be delivered through the cloud as a service (UCaaS) for enterprise communications. It is broadly similar to PaaS but supports six communications functions: enterprise telephony; meetings (audio/video/web conferencing); unified messaging; instant messaging and presence (personal and team).