"a few temporary restrictions" on Azure customers. Cloud providers including Azure face a challenge akin to building a plane in the air — they need to quickly expand cloud capacity while still ensuring a quality experience for the surge in new end-users.
Though the quarantine measures driving peak demand will eventually let up, big tech companies are jockeying to capture a long-term growth opportunity. The growth of US tech titans' cloud revenue has slowed in recent quarters: Microsoft Azure reported 62% year-over-year growth in Q4 2019 compared with 76% a year prior, and Amazon Web Services reported 34% YoY growth in Q4 2019 compared with 45% a year prior.
Attempts by big tech to attract new users to their cloud-based services — Microsoft, Google, and Zoom have all away free workplace software — speak to the fact that they view quarantine as a catalyst for long-term changes in user behavior, and therefore a source for lasting relationships with new customers.
Big cloud players are vying to capture the lion's share of near-term growth, which would provide considerable momentum to retain new customers for years to come. We expect these three big cloud players to see an increase in growth rate over Q1 and Q2 of 2020, which will then slow in accordance with the downward pressure on growth that comes with scale.
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