The research company Gartner predicts that the market for public cloud services will have a worth of $383.3 billion by 2020. If you’re looking for an investment in the tech space, this is a very promising choice with a wealth of interesting players to choose from. The cloud is essentially a network of remote servers that businesses can use to store information, host code, or share data. Its popularity has increased significantly in recent years, giving rise to a range of new possibilities and investment-worthy options. Here are our essential tips to investing in Cloud Technology
Table of Contents
Consider Contenders Carefully
The cloud space is getting crowded, with a number of major tech companies taking up residence. Cloud services are now available from Amazon, Google, Microsoft, and IBM, to name only a few. If you’re looking for a smaller investment opportunity, there are several options with a lower market cap. Carl Data Solutions offers cloud storage, collection, and analytics. Inter-cloud focuses on cloud networking and automation environments. Trakopolis, based in the cloud, offers mobile communications and location-based services.
The cloud was once focused primarily on storage. However, its modern shape has come to incorporate many other activities. Businesses are turning to the cloud for computing power, application hosting, and myriad other services. Before you invest, spend some time exploring how different companies are using the flexibility and scalability of the cloud.
Watch Out for the Security Risks
Like any type of technology, the cloud is susceptible to cybercrime. In its earlier days in 2014, the Amazon EC2 server was hacked for bitcoin mining. The raw processing power available on cloud servers makes them a tempting target for this and other fraudulent activities.
Anyone investing in cloud technology needs to be aware of the inherent security risks and take the appropriate measures to try and avoid them as much as possible. Losing data can be a nightmare. Today, AWS and other investment-worthy cloud companies are using proactive security measures and best practices that are regularly updated to thwart attackers. This is the approach you want when you’re putting money into a cloud-based company.
Invest With a Long View
Though the short-term outlook for cloud technology is strong, this is an area where you should invest with your eye far on the horizon. The technology industry can experience any number of disruptions. Amazon Web Services (AWS) is considered a major leader in public cloud computing, accounting for 40 percent of the market and AWS sales of $916 million in the second quarter of the year. However, this company remains susceptible to fluctuations in the retail market.
Google’s cloud currently accounts for just 6 percent of the overall market, yet Urs Holzle, the head of Google Cloud, says that he plans for revenue from the cloud to overtake advertising sales by 2020. Google’s advertising accounts for almost 90 percent of its top line, so these cloud goals are clearly set high. It’s worth waiting to see how the technology will really shape up.
If you have the capital and time to place in the cloud industry, this is a fast-growing space where your investment may turn around quickly when placed well.