Many analysts are now predicting that the global cloud computing marketplace will outpace the current projections set by technology research analyst firm Gartner. Research by MarketandMarkets tends to look more optimistic in 2015 than originally reported by Gartner. MarketandMarkets says that the cloud market could top $120B by 2015. Technology and investing experts have said the emerging cloud computing market could hit a small snag in 2014. What could hold back the cloud in 2014?
Cloud spending on infrastructure and R&D will eat up much of the budgets of cloud providers in 2014. Tech giants such as SAP have publically told investors that they plan on scaling back their profit margins in order to deliver SAP apps in the Software as a Service model. Since many of the tech giants are now dumping billions into R&D, infrastructure build out and cloud acquisitions, investors of the cloud computing market may not see the same stellar returns they saw in 2013.
SKYY is the ticker symbol for the Cloud ETF and in 2013, the fund gained over 30% for its investors throughout last year. Electronic Traded Funds such as SKYY help gauge the growth of the cloud market as a whole. While the outlook for 2014 isn’t great, this shouldn’t deter your investing strategy because the research suggests that another explosion in cloud services is set for 2015. Although this article is not meant to be construed as investing advice, many analysts suggest that 2014 is the year to buy in to the cloud market. Since cloud firms will be spending so much to stay on the cutting edge of technology, the profit windfalls may not be apparent until 2015 and beyond.
Microsoft could be positioned to gain the most from this uptick. Microsoft has reinvented itself as a cloud first company and research shows that Azure is growing steadily at nearly 100% per year. In November, Microsoft was reporting that Azure was gaining 1,000 new clients per day. Microsoft is also a battle tested company that has shown gains even in downtrodden markets. Although smaller companies will certainly make meteoric rises by 2015, Microsoft is a name that many organizations will exclusively trust with their private, hybrid and public cloud needs.