Jeff Kagan: Companies Are Rushing to the Cloud

Jeff Kagan |

You’ve heard of the cloud and how it is going to change everything. How it will impact every company, every corporate customer and every consumer over the next several years. So what is the current state of the cloud? It’s changing. Let’s take a look.

It started out with lots of small companies competing in the space. Then during the last couple years we have seen some big name companies moving into this space as well. Companies whose well-known brand names get lots of attention. Companies like Google (GOOG) , Amazon.com (AMZN) , Microsoft (MSFT) , Hewlett Packard (HPQ) , Facebook (FB) and more.

I see this cloud opportunity evolving similar to the way we watched the Internet grow and change since the mid 1990’s. Back in those early days the big companies selling access to the Internet were actually smaller, growth companies like AOL, Earthlink and Mindspring. They were tiny, often started on the kitchen table, but very rapidly growing.

However when the technology was advanced enough things started to change. The telephone companies starting selling DSL and cable television companies started selling their high-speed access as well.

Then they started selling access to the customer. Once that happened, they quickly became the leaders and things have not changed that much ever since.

Today while the leaders are telephone and cable television companies, the old leaders are still around, but not as important a piece of the pie. Smaller companies have remained that way.

The cloud is similar. It started with lots of smaller or lesser-known companies offering cloud based services. They have been growing as the cloud is an important growth sector.

However we have seen other big name companies enter this cloud space and things are changing. Today cloud leaders are no longer the smaller, lesser-known companies. Today they are the big guys. And more big companies are moving into this space as we speak.

Don’t be surprised to see many more big name companies jumping into this cloud space. We are still in the very early innings of this new game.

HP announced earlier this week they are launching their HP Helion Portfolio of Cloud products and services. That is their brand name for this opportunity. HP says they will offer cloud products and services that enable organizations to build, manage and consumer workloads in hybrid IT environments.

One question. What the hell does all that mean anyway?

And that’s part of the problem. The mysticism around this entire cloud opportunity is hard to put into regular words so regular people can wrap their mind around it and really understand it.

Yet putting into understandable English is key because regular executives, customers and investors have to have a solid understanding going forward to make this whole thing work.

HP says they are investing more than one billion dollars to support and deliver new open source cloud products and services.

While that’s great, it’s important to realize that competitors like Google, Amazon.com, Microsoft, Facebook and others may be investing much more than that. In fact each may be investing that amount every quarter.

Any way you slice it the cloud will be an important part of our future. And it will be huge. However there is no single cloud leader today. That’s the target however for all these big name companies.

I think the marketplace will grow over the next several years and new ideas will drive more growth. The direction is always the question. Just like with the Internet, it’s impossible to see clearly years down the road.

Who will lead in the next few years is less important because this is still the very early days of the cloud.

We have to hope there are plenty of companies, big and small, who are in the mix and continuing to stir things up. That’s will keep this new segment growing.

I don’t believe anyone knows exactly what the future of the cloud opportunity will look like a few years from now. But that’s OK because we really didn’t know what the Internet opportunity would look like in the mid-90’s.

The technology and new ideas will continue to change the map. However companies who want to be leaders tomorrow must plant their flag in the ground today. That’s what these companies are all doing.

The cloud is not perfect. It may never be. Once your information is out there it is vulnerable. However you can also do so much more in a cloud based world than we ever could otherwise.

So as the next few quarters pass the cloud will become increasingly robust and secure. Until then let’s keep our eyes on the cloud opportunity and watch the direction that these different companies want to take us.

Just like the Internet was back in the 90’s, the cloud is just that exciting.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AMZN Amazon.com Inc. 740.34 -3.31 -0.45 3,561,307
GOOG Alphabet Inc. 750.50 2.58 0.34 1,452,484
HPQ HP Inc. 15.12 0.06 0.40 8,377,096
MSFT Microsoft Corporation 59.25 0.05 0.08 25,515,665
LDKYQ LDK Solar Co. Ltd. ADR (Sponsored) 0.01 -0.00 -2.61 16,436

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