Cloud Computing Outlook 2017: Continuing Uptake

The cloud computing outlook is for the market to keep growing quickly. According to Statista, the market for cloud computing, specifically infrastructure Software as a Service (SaaS), is set to grow to $11.6 billion by 2020. Certainly those are some impressive numbers and investors will be wondering what to watch for in the cloud space heading into 2017.
Here’s a look at a few trends in cloud computing and the cloud computing outlook for 2017.

2016

In RightScale’s 2016 State of the Cloud Survey, lack of resources and expertise were considered the biggest cloud challenges faced by professionals. This trend paves the way for companies who provide cloud solutions.
Many of the best performing tech stocks on the TSX this year were cloud companies, including Kinaxis (TSX:KXS), NexJ Systems (TSX:NXJ) and Shopify (TSX:SHOP). Kinaxis gained 31.76 percent year-to-date and NexJ gained a notable 67.88 percent.
This shows that cloud users are reaching out to experts in the field in order to counteract their own limited knowledge. This is good news for investors in the sector, going forward.

2017

Continued growth

In Deloitte’s Technology Industry Outlook 2017, Paul Sallomi, Global Technology, Media & Telecommunications industry leader, has pegged cloud services as prominent in the future. He says certain models are gaining in popularity, like “cloud-based software-as-a-service offerings that allowed customers to move away from buying hardware and software outright and instead to purchase computer power and storage as needed.”

Customer service technology on the rise

Daryl Plummer is Vice President, Gartner Fellow, Chief of Research and Analyst in Predicts 2017: Lead, Follow, or Get Out of the Way – A Gartner Trend Insight Report. To quote: “The majority of new CRM software spending is now on cloud implementations.” CRM focuses on the customer experience (CX) and the cloud is the chosen method of delivering customer satisfaction.
Oracle (NYSE:ORCL) is one company realising the potential of CX. They offer integrated cloud and platform services. Their Oracle CX Cloud Suite offers the same quality customer interaction across all media devices in all locations. A key takeaway from The Forrester Wave: CRM Suites For Enterprise Organizations, Q4 2016, claims that “change in this space will continue as vendors fill in gaps with acquisitions or redefine their CRM portfolios.”

Greentech: Green web warriors

It seems that cleantech and cloud computing may however be on a collision course. Power is the problem. Coal is used to run computer data centers that mine and process content. The bigger the cloud, the more electricity is needed. Under Trump, finding the answer to this will likely not be a government priority. As Klint Finley put it in a Wired article, “the next administration will probably be less keen on funding renewable energy research”. Finley therefore states “the giants of the internet carry more responsibility than ever.” Turns out data stored remotely isn’t out of sight and out of mind.

Investor takeaway

Looking into the crystal ball for the year ahead for investors, there could be even more change on the horizon to watch out for when it comes to cloud computing. There is plenty to anticipate as the sector will surely grow with the swelling of companies en route to migrate to the cloud. Investors stand to benefit from the proliferation of cloud companies, with their unique skillset for this new era in data storage.
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Securities Disclosure: I, Emma Harwood, hold no direct investment interest in any company mentioned in this article.