Cloud Computing Peaks, Chip Shortage Could Create Problems

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Global spending on cloud infrastructure services reached $50 billion in the third quarter of 2021, according to tech analyst Canalys, as digital transformation initiatives continue to be prioritized by organizations worldwide.

Canalys noted that cloud infrastructure services such as infrastructure-as-a-service and platform-as-a-service, continue to be robust this quarter, with spending rising to $2.4 billion quarter-on-quarter and nearly $13 billion year-on-year.

This is largely due to the ongoing COVID-19 pandemic, which forced organizations to introduce new digital processes to ensure continuity of operations while employees and customers worked remotely and made transactions.

Cloud computing revenue, IBM said, rose to $219 billion in 2020, and analysts expect the sector to grow to $791 billion by 2028.

But, Canalys attributed the impending impact of the adoption of the cloud to the global shortage of computer chips, which has not been mitigated. An imbalance in supply and demand and the difficulty of sustaining sustainable supply chains in the context of the pandemic have led to a global shortage of semiconductors, which is forecast to last well into 2022.

The shortage has severely affected the supply of components that are critical for the operation of data centers, such as power distribution units, automatic transfer switch units and generators.

“Overall compute demand is outgrowing chip manufacturing capabilities, and infrastructure expansion may become limited for the cloud service providers,” said Blake Murray, Canalys research analyst.

This is the reason for large cloud providers to offer industry-specific portfolios and services tailored to both the needs of a wide range of users and specific industries.

Amazon’s AWS subsidiary grew by 39% this quarter and now accounts for 32% of total cloud infrastructure services issued in the third quarter of 2021. It is followed by Microsoft Azure, which has a market share of 21% after an increase of 50% in the fifth consecutive quarter, while Google Cloud rose by 54% to 8% market share.

For more information, read the original story in ZDNet.

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