Covid-19 Boosts Technology Sector as Subscriptions and Sales Rise
The effects of the Covid-19 pandemic have reached the technology sector, with Software as a Service (SaaS), Desktop as a Service (DaaS), and Infrastructure as a Service (IaaS) all benefiting from the rise in home working. The uptake in software sales has contributed to positive projections for the sector in 2021 as businesses respond and adapt to remote working.
Sales of Subscription Services Increase Amid Changes to Work and Lifestyle
Subscription services, such as heavyweights Netflix and Amazon Prime, have seen substantial growth in sales due to the Covid-19 pandemic. Such subscription services were already on the rise prior to the virus, but the increase in sales sharpened during the early stages of the pandemic. Netflix doubled its projected number of new global subscribers to 15.8 million in Q1, before seeing a drop off in Q3, while Amazon Prime continues to see increased sales revenues.
It comes as people across the globe have adjusted to being homebound, with intermittent lockdowns forcing people to shop online or consume entertainment through subscription services. But entertainment and retail are not the only markets benefitting from increased subscriptions; SaaS companies offering communications software, such as Microsoft Teams and Zoom, have also seen an increase in downloads following the rise in home working.
Businesses and organisations are adapting to this change by using subscription services as essential tools in a post-pandemic work environment. Zoom saw a Q1 total revenue of $328 million, which exceeded the company’s forecast of $200 million, and a substantial increase in free subscriptions globally as a result of the pandemic.
Similarly, Microsoft saw 34 million Teams meetings in the healthcare sector alone in the month of April. Videoconferencing software subscriptions are expected to continue as people and organisations adapt to the effects of the pandemic in the months and years ahead.
Substantial Growth Projected for Global Cloud Computing Market in 2021 and 2022
The global cloud computing market is set to see substantial growth in 2021 and 2022, again due to the coronavirus pandemic, its long-term effect on businesses, and the increased demand for cloud-based services.
According to StockApps, the market is expected to see an increase of 6.3% in 2020 and the growth is expected to continue through 2021 and 2022. The SaaS sector is expected to grow to $120.99 billion in 2021 and $140.6 billion in 2022, while the DaaS sector is set to grow to $1.95 billion in 2021.
The growth of the cloud computing market coincides with the rise in remote working, as businesses and people working from home require access to cloud-based systems and software on a global scale. Microsoft, for example, has seen a 30% increase in their cloud services revenue, along with a rise in their intelligent cloud and Office services.
Globally, there has been a 33% increase in business spending on cloud services in Q3 2020 according to analytics by Canalys. The firm attributes this increase to the Covid-19 pandemic and expects further worldwide growth in the coming years.
SaaS and Disruptive Technologies: What to Expect In 2021
As people adapt to a post-pandemic world, it is likely that businesses will continue to spend on SaaS and new technologies to support remote working. Video and communications software will continue to grow as will subscription services. The demand for technology and software as a service will increase as businesses seek to navigate a drastically different working landscape.
More and more people are working from home and, as a result, are relying on software to communicate with their colleagues and carry out their tasks. The reliance upon technology for work was already evident, but the Covid-19 pandemic has exposed just how dependent on technology we really are.
This also speaks to the changing nature of work in a macro sense. The pandemic has caused us to consider questions related to human resources, the rapid progression of artificial intelligence, and flexible working. But the boost to the SaaS sector is undeniable. Now is the time for SaaS and technology companies to harness this opportunity to showcase their product and service.
As the demand for software increases, so does the competitiveness of the market. It is therefore paramount that SaaS companies respond to this change by having a suitable digital marketing and communications strategy that not only highlights their software, but the service that they provide.