Microsoft Azure Demand up 775% in Social Distancing Areas

In light of the coronavirus outbreak, cloud services are witnessing exponential jumps in demand, straining services and data connections. Microsoft just outed an update about the status of its Azure services, which have recorded a peak increase in demand of up to 775% in areas where social distancing and/or lockdowns are enforced.

Microsoft described the influx of demand for Azure services:

• We have seen a 775% increase of our cloud services in regions that have enforced social distancing or shelter in place orders.
• We have seen a very significant spike in Teams usage, and now have more than 44 million daily users. Those users generated over 900 million meeting and calling minutes on Teams daily in a single week.
• Windows Virtual Desktop usage has grown more than 3x.
• Government use of public Power BI to share COVID-19 dashboards with citizens has surged by 42% in a week.

Last week, Microsoft said that it will prioritize first responders for Azure access.

Meanwhile, Microsoft is adamant that despite the increase in demand, Azure services are not witnessing any "significant service disruptions" -- though it is unclear what qualifies as a significant service disruption, and there are handfuls of complaints about Azure's reliability amidst the increase in demand. The Redmond-based company said that it is expanding the capacity very soon to ensure services remain stable. 

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Additionally, Microsoft is in discussions with internet service providers around the world to ensure that its services don't overwhelm data connections. When necessary, Microsoft is also reducing video quality in Teams meetings and other services to spare bandwidth. 

The problem with the wild increase in demand for cloud services is that companies like Microsoft need to act quickly in order to keep capacity in check. One strategy that economics teaches us about managing demand is that you can increase prices, though, in times like these, price surging is wildly unpopular. Consequently, this leads cloud service providers to make significant investments to meet the short boost in demand, potentially creating an excess in capacity later, when the pandemic is over and demand drops back to normal.