We live in a connected world and cloud computing plays an essential part in the lives of most of us. At the basic level cloud computing refers to the on-demand availability of storage, computing, and software over the internet without the user having to manage the infrastructure.
In the early years of computing, storage was mostly in the form of internal and external storage devices such as floppy disks, CDs, DVDs, and more recently USB drives. The software came in either a storage device or for enterprises, available through a server where an individual computer had to connect and after providing the necessary credentials, could access the data or other services. Distributed computing started to evolve in the 90s, with VPN being one of the early uses. Over the years, with broadly enhanced internet speeds, it became possible to offer many solutions hosted in remote servers and access provided through the cloud.
Cloud computing is an evolving area of the technology industry, and a lot of potential growth lies in the future. According to a recent study conducted by Grand View Research, the cloud computing market is expected to grow to $1.25 trillion by 2028, an almost 20% annual growth from its 2020 value.
The three major divisions of cloud computing are software-as-a-service (SaaS), infrastructure-as-a-service (IaaS), and platform-as-a-service (PaaS). Software as a service is a licensing and delivery model where software is sold on a subscription basis and licensing is provided to the user. The software itself is centrally hosted. SaaS is also known as "on-demand software" and Web-based/Web-hosted software. PaaS is an even advanced cloud computing model compared to SaaS. In PaaS, a client can run, manage, and remotely operate a computing platform. Windows Azure and Google App Engine are examples of PaaS. IaaS is a model where computing infrastructure, physical virtual machines, disk image library, firewalls, virtual local area networks, etc are provided. Examples include RackSpace and Amazon EC2.
Among cloud computing companies, some offer services that cater to almost all industries while a few others are specialized providers. Let us look at a few of the major players.
Amazon web services is the cloud computing division of the technology giant. AWS provides an on-demand computing platform, and APIs to a variety of industry players. AWS had close to $50 billion in revenues in 2020.
Microsoft Azure is the cloud computing segment of Microsoft, one of the largest software companies in the world. Azure provides SaaS, PaaS, and IaaS services to most industries. Azure generated $38 billion in 2020 revenues.
Google cloud platform is a provider of cloud computing services and is a subsidiary of Alphabet Corp. Google cloud provides both IaaS and PaaS environments. Google Cloud generated $13 billion in revenues, in 2020.
Alibaba Cloud, known as Aliyun, cloud computing subsidiary of the Alibaba Group. Alibaba Cloud provides cloud computing services to online businesses.
The cloud arm of IBM provides on-demand computing services to businesses across the world. IBM too provides SaaS, PaaS, and IaaS services. The company’s cloud division generated close to $7 billion in 2020 revenues.
Among the niche cloud computing players, the following are the prominent ones.
Salesforce is a cloud computing company that specializes in providing customer relationship management, marketing automation, and other analytics services. Salesforce had $21 billion in 2020 revenues.
Shopify offers cloud-based solutions to companies to set up e-commerce facilities. The firms’ solutions include payment systems, marketing tools, shipping solutions, and customer relationship management tools over the cloud.
ServiceNow is a niche cloud computing company offering primarily digital workflow management solutions to enterprises. Servicenow had around 4.5 billion in 2020 revenues.
Workday provides financial management and human resource management solutions over the cloud. Workday offers its solutions across the world and generated $4.32 billion in 2020 revenues.
Snowflake offers cloud-based data warehousing, analytics, and other services. The firm classifies itself as a ‘’data warehouse-as-a-service” company. Snowflake generated $592 million in 2020 revenues.
Despite cloud computing still being an emerging technology, there are quite a few individual stocks available that operate in this space. There are also a handful of ETFs that provide access to the cloud computing world. These include WisdomTree Cloud Computing Fund (WCLD), First Trust Cloud Computing ETF (SKYY), and Global X Cloud Computing ETF (CLOU).
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