In simple terms, cloud computing is a network of servers on the internet that allows users to manage and process data rather than over the data of a computer. Unsurprisingly, this technology has taken the internet by storm– with some reports suggesting the industry will increase by roughly $100 billion between 2016-2020.
Like Forbes reported, spending in cloud computing has grown nearly five times the rate of IT spending since 2009, and is positioned to grow more than six times the rate from now until 2020. As mentioned, this will result in an increase of nearly $100 billion in cloud computing spending–from $67 billion in 2015 to $162 billion in 2020–making it an attractive space for those looking to invest in cloud.
In other words, there’s plenty of investing opportunities to be had in cloud computing–now more than ever. With that in mind, here the Investing News Network (INN) has compiled a list of ways to invest in cloud–from companies, to ETFs.
Invest in cloud: overview of top cloud companies
Indeed, it’s difficult to think about cloud computing companies for investing opportunities without first considering the the top names in the industry. As INN has previously reported, those big names include:
- Amazon Web Services (NASDAQ:AMZN): Amazon Web Services is a subsidiary of Amazon.com and has a variety of cloud computing services that operate across 42 zones in 16 geographical regions. Amazon’s services provide database storage and content delivery, to name a few.
- Google (NASDAQ:GOOGL): Alphabet is Google’s parent company, whose cloud computing includes Google Compute Engine, which delivers virtual machines that run Google’s data centers and fiber network.
- IBM (SoftLayer) (NYSE:IBM): IBM acquired SoftLayer in 2013, whose products and services vary from virtual servers, networking, big data solutions, and cloud solutions.
- Microsoft (NASDAQ:MSFT): It goes without saying that this list would be incomplete without cloud computing giant, Microsoft, even with its diversity. In terms of its cloud-based software, Microsoft offers services and content through the internet by way of shared computing resources in centralized data centers.
- VMware (NYSE:VMW): VMware’s portfolio ranges from data, cloud and mobile devices. To that end, the company offers hosted Iaas offerings by way of its vSPhere virtualization technology, which has the ability to run any app on any cloud.
Invest in cloud: smaller market cap companies
Of course, the top cloud computing companies aren’t the only options available when it comes to those looking to invest in cloud. There are plenty of companies offering a wide-range of cloud services that have a market cap of less than $500 million with plenty of room to grow for investor consideration, such as:
- Bridgeline Digital (NASDAQ:BLIN): Bridgeline Digital has a market cap of $12.27 million, and is a digital engagement company. Its iAPPS platform integrates web content management, e-commerce, e-marketing, social media management and web analytics in efforts to help markers provide digital experiences that reach and convert their customers across a wide range of channels. The iAPPS platform in particular is a cloud-based software as a service that gives customers with deployment providing maintenance, daily technical operation and support.
- Carl Data Solutions (CNSX:CRL): Carl Data Solutions is another small market cap company–$11.63 million, in fact–and is a big-data-as-a-service enterprise that provides custom cloud-based collection, storage, monitoring and advanced analysis of data of multiple sizes and complexity. Carl Data’s FlowWorks application works to improve abilities to collect and transform raw data into ‘actionable’ information.
- Cloud Nine Education Group (CNSX:CNI): Cloud Nine may be small in market cap–$2.73 million– but it focuses on licensing and sale of its English as a second language curriculum called the Cloud Nine ESL program for a range of education services in Canada and around the world. The program is digitally based that is hosted in the cloud and delivered through the company’s website using the Google Education platform.
- Cloud Security (OTCMKTS:CLDS): Cloud Security is developing its cloud security technology called MyComputerKey, which is a technology that provides secure multi-factor validation and authentication systems for cloud-based infrastructures and protects data accessed from secluded locations around the world. The company currently has a market cap of $17 million.
- Intercloud (OTCMKTS:ICLD): With a market cap of $15.27 million, Intercloud provides cloud networking orchestration and automation for software-defined networking and network function virtualization cloud environments. Intercloud operates through four segments, namely: applications and infrastructure, professional services, managed services and cloud services.
- Sandvine (TSX:SVC): Sandvine provides intelligent network policy control solutions for fixed and mobile operators. More specifically, its Cloud Services Policy Controller allows for communications service providers to enable visibility, control and protection services. Sandvine has a market cap of $472.55 million.
- Trakopolis (TSXV:TRAK): With a market cap of $21.79 million, Trakopolis is a cloud-based platform for interfacing mobile communications, software applications, and location-based services. It is essentially a software-as-a-service company with cloud-based solutions for tracking and data analysis for companies that provide equipment, devices, vehicles and to workers.
Invest in cloud: ETFs
For many investors–particularly first timers–investing in ETFs is always an attractive option. ETFs target specific commodities and give investors the options of picking companies out within the sector. In other words, for those looking for other options when it comes to invest in cloud opportunities, ETFs are also available.
With that in mind, however, according to the ETF database website, there is only one cloud computing ETF–the First Trust ISE Cloud Computing Index Fund (BMV:SKYY). The ETF was incepted on July 6, 2011, and is the first to “offer exposure” to the cloud computing industry. According to the analyst report, this particular ETF can be attractive in short-term tactical plays, but may also serve as a minor complementary holding in a longer-term buy-and-hold-portfolio.
The First Trust ISE Cloud Computing Index Fund tracks 31 holdings–the top one being Amazon–along with other large market cap cloud companies such as: Zynga (NASDAQ:ZNGA); salesforce (NYSE:CRM); and Oracle (NYSE:ORCL).
Invest in cloud: summary
As any investor can see, there is no shortage of opportunities to be had in the cloud sector. Like a Global Cloud Enterprise Content Market research report suggests, it’s expected that North America will hold the largest market share in the cloud enterprise market–which is no doubt exciting news for those looking to invest in cloud.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.