REUTERS: As lockdown orders force billions of people to work, learn and play from home during the novel coronavirus outbreak, usage has surged for the cloud computing services that power video conferencing, streaming television and online games.
Delays in setting up new servers and generous free trial offers also capped sales growth in the first quarter. "Cloud investment in the worst-affected vertical segments, such as hospitality, aviation, construction, tourism and manufacturing, is being scaled down or delayed," Canalys said in a report on Thursday."This has offset some of the short-term growth enjoyed during the quarter."
Market researcher IDC last week downgraded its forecast for global IT spending in 2020 to a 2.7per cent decline compared with a previous estimate of a 3.6per cent rise because of the pandemic.Microsoft Azure, which is No. 2 in cloud revenue after Amazon Web Services, saw its sales growth rate slow the most, at 59per cent in the first three months of the year from 62per cent in the prior quarter, company data showed.
As much as a fifth of Microsoft's cloud revenue could face volatility in the coming quarter because of those delays, the company said.