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TMCNet:  Jeff Kagan: Cloud Based Computing Winners and Losers

[March 27, 2014]

Jeff Kagan: Cloud Based Computing Winners and Losers

(Equities.com Via Acquire Media NewsEdge) Cloud based computing is getting lots of attention lately. It is one of those brand new technologies that is very chaotic. There are winners and losers and they will continue to change. However it is not really new. What we see now is new thinking, new ideas, new technology and expansion in new areas. Today, only some companies seem to be doing well in this space.


Cloud computing itself is not new. Companies have been using it for many years letting their workers log on to the network. Data and software are stored on the network. Users simply log on and work.

The cloud is also not new in the open consumer marketplace. There are countless examples, but just think of Amazon.com (AMZN) and Carbonite (CARB) to understand. These are e-commerce and automatic backup services. And there are many more.

The cloud has been with us for a while, but now it is growing and changing and expanding. As an example, think of the smartphone side of the wireless business. Smartphones have been around for a couple decades already. Think Blackberry and Palm. However the smartphone segment changed and expanded rapidly a few short years ago when Apple iPhone (AAPL) , Google Android (GOOG) and Samsung Galaxy hit the streets.

The entire smartphone segment rapidly changed. Carriers now focus on providing fast access to data and apps. And the app market has exploded from a few hundred to nearly a million in just a few short years. So smartphones may have been with us for a while, but this new expanded smartphone market changed everything.

That's what is happening with cloud computing. There are well-known, older companies and technologies that are trying to ride this wave and continue to lead. At the same time there are brand new ideas and companies whose technologies are dramatically changing the world.

Not every company in this space does well. During the last few years, anything having to do with cloud computing seemed to be a hit. However now it seems things are shifting. Many older and more established companies and ideas are having a tougher time staying in the sweet spot.

The real hits seem to be the new ideas and companies and technologies. Some of these come from new companies who want to change the world. Others still come from existing players.

Today some existing brand name players seem to continue hitting home runs, while others are struggling.

So what is the cloud? It's actually many different things depending on the company, the technology and the marketplace they serve.

The cloud can be software as a service. Rather than buying software at a store on a disk, you just log on and use it. It is always updated automatically.

Or the cloud can be a platform as a service. Think of the Apple iCloud where users store all their data on the iCloud rather than on their devices.

Or it can be infrastructure as a service. This is a wide-ranging offering.

And that is just today. The cloud continues to expand. What will the cloud be in the next few years as it continues to grow and change and expand? Today there are private cloud and public cloud services customers can use, plus there are hybrid cloud offerings as well.

Some of the bigger names in the cloud space are Amazon.com, Google, Oracle Cloud (ORCL) , Microsoft Azure (MFST) , Salesforce (CRM) , Zoho and many others.

There are also service providers who I believe will be important players in this cloud space like AT&T (T) , Verizon (VZ) , CenturyLink (CTL) , Sprint (S) and C Spire on both the wireless and wire line side. This is also an opportunity for companies like Windstream (WIN) who are service providers and already have the kind of corporate customer that can use the cloud.

Thursday a company called Q2 went public. CEO Matthew Flake said in an interview on CNBC that Q2 is a smaller and newer company breaking into the rapidly growing and changing cloud space. They seem to see a very bright future.

At the same time consider Oracle Cloud. Oracle is a well-known, long time brand name yet it seems to be struggling in this cloud sector currently. Can they recover? Yes of course. "Will they?" is the real question.

What this means is there are no guarantees. Some well-known brand name companies will do well while others will struggle. And many newcomers have the chance to rattle the cages and really breakout in this new and fast growing space.

So who will lead? Will it be smaller and newer technologies who are the nimble ones? Or will it be existing brand name leaders who either continue to grow or successfully regroup and recapture their growth waves? Good questions. The answer is some companies from both groups. All I can tell you right now is the cloud is the future. There will be public and private and hybrid clouds that will touch every aspect of our business and personal lives.

The cloud is one of those spaces that is young and developing and changing. Often it takes small and nimble companies to make sharp turns and continue to open markets. Then again look at how well established companies like AT&T Mobility and Verizon Wireless have done with their cloud offerings supporting the new smartphone world.

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