Submitted by Morgan Smith as part of our contributors program.
Over the past several years, technology has taken some giant leaps forward in terms of allowing businesses to better engage with their employees, customers, and competitors – and one of the biggest keys in providing companies with the means to do so is cloud computing. The term cloud computing – a concept that was unknown to the majority of the planet until just a few short years ago – has today become almost a household name.
In this article, I will discuss how the current and future need by large and small companies, as well as by individuals, has helped in transforming the businesses that both provide cloud computing and allow for the usage of cloud computing capabilities – and in turn may lead to a great opportunity for investors.
For many smart businesses, cloud computing can provide a critical success factor – and once this technology is harnessed correctly, cloud computing can allow businesses to operate in a much more cost effective way than its competitors. As more and more businesses seek to stand out from their competition, they are in search of providers of this cloud computing technology that allows access to data and applications from anywhere in the world – and they can oftentimes find it from small, yet powerful sources.
One great example of a smaller provider of cloud computing today is Younicycle. The company was officially named and launched in 2003, after formulating ideas starting in 2000. This innovative company helps developers to collaborate online through use of fully integrated and highly powerful Cloud services. What this means is that application developers can efficiently and effectively work closely with content developers in real time by sharing files online, co-managing databases, and securing data – essentially resulting in projects that are completed more quickly and seamlessly from all sides.
Younicycle’s website is the online version of Younicycle and is presented as Software as a Service (SaaS). The company also offers a Younicycle Server Package (YSP) for your own server and a Younicycle Enterprise Package, which includes PDF creation capabilities. An extended version of the Enterprise Package is what Younicycle has used to develop and serve its own site and many others.
Youicycle is different from other operators in the cloud space. The company provides tools that can be used to create online software or software for your local internal operations. Instead of providing a Targeted (Vertical) Application, Younicycle provides all of the tools needed to create your own targeted applications.
Large Cap Cloud Computing Providers Could Provide Huge Value for Investors
On a much larger scale, there have been numerous large cap companies that have run headlong into the cloud computing arena. Take Amazon (AMZN) for example. In many ways, Amazon has been hailed as the “cloud king,” with its offerings of cloud based storage and processing through its Amazon Web Services (AWS), and with a client list that spans the likes of DropBox, Netflix, and Yelp, as well as Amazon itself.
It was estimated as of late 2011 that Amazon had over 1.5 billion items in its retail catalog – and with 200+ fulfillment centers worldwide, Amazon has lots to keep track of. Enter cloud computing technology – which has allowed Amazon to seamlessly make in excess of 50 million updates to its catalog each week.
Yet, while Amazon doesn’t disclose a great deal about its current data centers, as well as those that are planned for the future, the company is, according to research from Accenture, the largest cloud service provider by far, and it is estimated that the company’s Elastic Compute Cloud, or EC2, runs on approximately 450,000 servers around the globe. The estimated revenue from this alone could be in the $1 billion range for Amazon.
With a market capitalization of nearly $108 billion, Amazon’ third quarter 2012 reported revenue grew by nearly 27% as compared to the same quarter 2011. Amazon’s share price is estimated to rise over 14% over the next 12 months, allowing a nice return for its investors.
Not to be left out, Microsoft (MSFT) has also been seen as not just a large user of, but a provider of cloud computing. Today, there is a huge demand for new apps, as well as the need to access data at any time and from anywhere. Microsoft provides delivery of Cloud OS that is set up as a comprehensive set of various capabilities across a user’s data center – which is also either a Microsoft data center or one belonging to a service provider.
Microsoft’s approach to cloud computing has been used primarily as a way to help their own customers in taking a big step towards redefining the overall role that IT plays in implementing the strategy of a business. In many respects, the use of cloud computing can be a real game changer in terms of the way that companies compete and do business.
As of early 2012, it was estimated by the IDC (International Data Corporation) that spending on public and private IT services could generate 14 million jobs worldwide by 2015, and new business revenue in excess of $1 trillion per year for the companies that provide this service.
Microsoft is clearly a leader in the cloud computing arena, offering software, tools, and other services to help their customers around the world. And, this has certainly helped in growing the company even further.
As of the third quarter 2012, Microsoft reported a market cap of nearly $237.5 billion, and earnings per share of 1.85. With a dividend yield of 3.3%, Microsoft shares can provide steady income to its investors, along with growth in the form of an estimated 25.6% rise in the company’s share price over the next year, making this large cap a winner in both the short- and long-term.
The Bottom Line
When it comes to data storage and IT collaboration, most small and large businesses today can benefit from the use of cloud computing. And, while there are a number of small providers of this service, it is the large caps that not only offer cloud computing services but also use this technology that are providing advantages to their own companies as well as to their investors.
Because both Amazon and Microsoft provide the lion’s share of cloud computing services, as well as the related software, I feel that it is highly likely that this new technology will be responsible for increasing revenue as well as subsequent growth for each.