Cloud Computing Sector Ideas

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>>> Marsh McLennan’s CIO started with a summer job in 1995. He never left and now leads a team of more than 5,000 technologists


Fortune

by John Kell

November 27, 2024


https://finance.yahoo.com/news/marsh-mclennan-cio-started-summer-153731035.html


Paul Beswick first joined Marsh McLennan in 1995 when he took a summer job at the insurance brokerage and management consulting firm. He’s never left and for the past five years has led a team of over 5,000 technologists as global chief information officer.

“My job has not really been to get deep into the details of what projects are being done,” says Beswick. “We have business unit CIOs who do that. They're much better at it than I would be.”

For most of his career at Marsh McLennan, Beswick worked for the management consulting business Oliver Wyman, specializing in the retail sector. He was a consultant for more than two decades, longer than Beswick intended, because he enjoyed helping retailers implement technology solutions.

Beswick became CIO in January 2021 and since then has focused on building a culture that promotes sharing the best ideas that can solve technology needs for all four of the company’s business divisions, which include Marsh, Guy Carpenter, Mercer, and Oliver Wyman. Those businesses bring together more than 85,000 colleagues that offer risk, strategy, and talent management services, generating $23 billion in annual revenue, placing Marsh McLennan at 180 on the Fortune 500.

Each Friday morning, Beswick hosts a conversation with a colleague to talk about their career history, what work they are doing at Marsh McLennan, and what they do during their free time. The company hosts monthly tech talks centered on business themes like cybersecurity and cloud FinOps, the latter an operational framework that helps companies manage their cloud costs.

“It’s a fantastic way to get these little views into different parts of a very big business and diverse organization and personalize it,” says Beswick. “Within technology, you tend to get a lot of introverts. There’s a lot of really good stuff that happens that no one talks about.”

A few key projects that kept him busy early in his tenure as CIO included reorganizing the technology teams to create more shared services, for functions like infrastructure and cybersecurity, to run across all the various divisions.

Beswick’s thinking also evolved on cloud. The journey to the public cloud began in the middle of the 2010s and envisioned retaining six global data centers, two apiece in the U.S., Europe, and APAC regions. They’ve since dropped down to one in each market and are now working to exit data centers entirely.

The migration to cloud has no firm end date, says Beswick, who is wary of overspending and of the risk of disrupting the full enterprise if every system is updated too quickly. Amazon Web Services is his main strategic partner, but Beswick expects to be multi-cloud for the foreseeable future and works with Microsoft Azure, Google, and Oracle.

”You're always squarely about picking one vendor—although I'd say AWS has been great—just because you feel sort of locked in,” says Beswick.

Beswick also led the development of LenAI, the company’s internally developed generative AI tool that’s used to summarize meetings, pull data from documents, and write drafts of presentations and emails. Since it rolled out roughly 15 months ago, 20 million requests have come in from employees, at a rate of about 500,000 each week. The large language models are rented, mostly from OpenAI via Microsoft Azure, but everything else is built by Marsh McLennan.

It took the company less than two days to build the first version of LenAI and Beswick says he’s happy about the experience of building the solution versus buying something off the shelf. The technology team has since gotten into a cadence of developing new capabilities that are built into the tool every few weeks.

Marsh McLennan launched a generative AI “academy” to speed up training and accelerate usage. Around 25,000 employees use LenAI each week.

“If you want to use it, great. If you don’t, that’s fine too,” says Beswick. "There's no cost savings target. It's just a tool that could be useful.”

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>>> Arista Networks, Inc. (NYSE:ANET)

https://finance.yahoo.com/news/hedge-funds-arista-networks-inc-170554181.html

Number of Hedge Fund Shareholders In Q1 2024: 69

Arista Networks, Inc. (NYSE:ANET) provides networking hardware products used in AI applications. The firm has been doing well financially, as it has beaten adjusted analyst EPS estimates in all four latest quarters. Like other AI stocks, Evercore ISI was quite bullish on Arista Networks, Inc. (NYSE:ANET) in a May 2024 analyst note. This note saw a price target increase to $340 from $320, along with the reiteration of an Outperform rating. Evercore believes that Arista Networks, Inc. (NYSE:ANET) can meet its target to bring $750 million in revenue by fiscal year 2025, allowing it to compete with AI king NVIDIA on the networking hardware front.

As March 2024 ended, 69 hedge funds tracked by Insider Monkey were Arista Networks, Inc. (NYSE:ANET)'s stakeholders. Rajiv Jain's GQG Partners held the most valuable stake which was worth $881 million.

Like other AI stocks, Arista Networks, Inc. (NYSE:ANET)'s forward P/E ratio of 41 shows that investors expect it to grow faster than the benchmark S&P 500. At the firm's latest earnings call, CEO Jayshree Ullal talked about the importance of networking in the AI era as she outlined:

We are witnessing an inflection of AI networking and expect this to continue throughout the year and decade. Ethernet is emerging as a critical infrastructure across both front-end and back-end AI data centers. AI applications simply cannot work in isolation and demand seamless communication among the compute nodes consisting of back-end GPUs and AI accelerators, as well as the front-end nodes like the CPUs alongside storage and IPWAN [ph] systems as well. If you recall, in February, I shared with you that we are progressing well in four major AI Ethernet clusters that we won versus InfiniBand recently. In all four cases, we are now migrating from trials to pilots, connecting thousands of GPUs this year, and we expect production in the range of 10K to 100K GPUs in 2025.

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>>> Microsoft investing billions in Spain for AI, cloud in latest EU spending spree


TechRadar

by Craig Hale


https://www.msn.com/en-us/money/companies/microsoft-investing-billions-in-spain-for-ai-cloud-in-latest-eu-spending-spree/ar-BB1izmG6?OCID=ansmsnnews11


Microsoft has confirmed plans to bolster its artificial intelligence and cloud infrastructure in Spain with a substantial $2.1 billion investment over the next two years.

The news came as Spanish Prime Minister Pedro Sánchez took to X to announce Microsoft’s decision to quadruple its investment in the country.

The investment follows closely on the heels of other commitments by the company, such as its $3.45 billion investment in Germany, emphasizing Redmond’s plans to expand AI and cloud services across Europe.

Microsoft continues to invest in European AI

In December, Microsoft revealed a similar $3.2 billion spend in the UK, aimed at expanding its AI datacenter infrastructure, increasing skills, and improving security.

Spain’s Sánchez commented on X: “I want to thank [Microsoft’s] president, Brad Smith, for his trust in the Spanish economy and in our roadmap for an inclusive and secure digital transformation.”
He added that the investment would help the country strengthen cybersecurity and promote artificial intelligence in public administration.

Microsoft Vice Chair and President Braad Smith commented: “Our investment is beyond just building data centers, it’s a testament to our 37-year commitment to Spain, its security, and development and digital transformation of its government, businesses, and people.”

Specific details about the company’s investment in Spain are yet to be confirmed, but it’s reasonable to suspect it will be on similar grounds to other cash injections announced by Microsoft in recent months.

Besides giving the country’s business sector access to better technologies, with the hope of boosting its economy, Microsoft also looks to be increasing its presence across Europe, an area that it’s previously had plenty of trouble with in relation to antitrust allegations, including its own cloud platform.

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>>> Arista Networks, Inc. (ANET) develops, markets, and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. The company's cloud networking solutions consist of extensible operating systems, a set of network applications, as well as gigabit Ethernet switching and routing platforms. It also provides post contract customer support services, such as technical support, hardware repair and parts replacement beyond standard warranty, bug fix, patch, and upgrade services. The company serves a range of industries comprising internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, telecommunication service providers, and others. It markets and sells its products through distributors, system integrators, value-added resellers, and original equipment manufacturer partners, as well as through its direct sales force. The company was formerly known as Arastra, Inc. and changed its name to Arista Networks, Inc. in October 2008. Arista Networks, Inc. was incorporated in 2004 and is headquartered in Santa Clara, California.

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>>> Cloud Computing Sales Growth Seen Slowing In March Quarter For Tech Titans


Investor's Business Daily

REINHARDT KRAUSE

04/12/2023


https://www.investors.com/news/technology/amzn-stock-cloud-computing-sales-growth-seen-slowing-for-amazon-microsoft-google/


The slowdown in cloud computing sales growth for Amazon.com (AMZN), Microsoft (MSFT) and Alphabet's (GOOGL) Google will likely worsen when March-quarter earnings come in for MSFT, GOOGL and AMZN stock. The most downside is expected for Amazon Web Services, the biggest provider of cloud services.

After years of torrid growth, cloud computing revenue growth began slowing markedly in 2022. Some of that is attributable to the law of big numbers — growth was expected to moderate at some point. AWS sales rose 29% to $80.1 billion in 2022.

Another factor is that some corporate customers have been rethinking how to most efficiently utilize cloud services. Also, more companies could cut cloud spending if the U.S. economy falls into a recession.

AMZN Stock: Cloud Computing Slowdown For AWS

In the March quarter, Wall Street analyst estimates call for revenue growth for AWS to slow to 15% from 37% a year earlier, said a Jefferies report.

Meanwhile, UBS expects AWS sales growth to slow to 13% in the March quarter.

"Customer efforts to optimize/trim their cloud spend are well beyond any historical norm and our checks suggest that optimization efforts will be deeper and last longer than most think," AMZN stock analyst Karl Keirstead of UBS said in a note to clients.

He added: "Relative to the consensus view that we're deep enough into these efforts such that the deceleration in cloud growth can begin moderating meaningfully as early as Q2 2023, we conclude that such efforts will persist at a high level throughout 2023."

Microsoft and Google earnings are due April 25. Amazon has not yet set a date to report.

Negatives For GOOGL Stock

Slowing cloud revenue growth is a negative for AMZN, MSFT and GOOGL stock. It's also a headwind for many software and cloud infrastructure makers. Warehouse-size internet data centers are packed with computer servers, data storage devices and high-speed communications gear.

Jefferies analyst Brent Thill in a report said Wall Street consensus estimates on AMZN stock expect AWS revenue growth to "trough" in the June quarter of 2023, then slowly reaccelerate.

"Investors remain concerned around the durability of AWS growth as customers shift to cost optimization and delay broader transformations during a period of increased budget scrutiny," Thill said.

He added: "We are cutting our 2023 AWS estimate by 3.5% and now expect 12% AWS growth in fiscal 2023 (1% below consensus)."

According to UBS, consensus estimates for Google Cloud have come down to 28% revenue growth in Q1 2023, down from 44% growth in the March quarter of 2022.

MSFT Stock: Dealing With Slowdown

The March quarter marks Microsoft's fiscal third quarter. Revenue growth at Microsoft's Azure cloud unit is expected to be 30%, down from 49% a year earlier.

In addition, Jefferies' Thill expects pricing pressure to continue.

"AWS operating margin remains under pressure since peaking at 35% in Q1 2022, with Q4 2022 AWS operating margin of 24.4% representing the lowest levels since Q2 2017," the AMZN stock analyst said.

In the "public" cloud market, customers rent servers and data storage as needed. The cloud giants sell processing power and data storage by the hour, week, month or year. Also, the cloud companies have been pushing new consumption-based services.

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>>> Arista Networks (ANET) leads high-speed data center networking


https://www.fool.com/investing/2023/02/06/2-market-beating-growth-stocks-to-buy-now-and-hold/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


Arista provides the high-speed networking platforms (like switching and routing solutions) that allow information to flow through modern data centers. The company pairs its core networking products with adjacent software for network telemetry, workflow automation, and security. Arista first brought its technology to cloud data centers, but it has since expanded across enterprise and campus environments.

Arista says its principal innovation is its Extensible Operating System (EOS), the software that powers its entire lineup of switching and routing platforms. By running a single operating system, Arista allows clients to integrate their IT environments -- from public clouds to private data centers, in both wired and wireless workspaces -- into a seamless network. That distinguishes the company from legacy vendors that use multiple operating systems, an approach that increases cost and complexity for clients.


Arista's networking products offer industry-leading capacity and low latency, meanings its switches and routers can move large amounts of data very quickly. That selling point has helped Arista win the business of cloud titans like Microsoft and Meta Platforms, and it has propelled the company to the forefront of the industry. Arista holds 41.5% market share in high-speed data center switches (like 100G, 200G, and 400G), which is nearly twice as much market share as the next closest competitor.

Arista provides the high-performance networking platforms needed to support cloud data centers, and it lowers the total cost of network ownership for customers by implementing a single operating system. That value proposition has fueled impressive financial results, even in a difficult economic environment. Third-quarter revenue climbed 57% to $1.2 billion, and GAAP net income soared 61% to $1.13 per diluted share.

Going forward, Arista should benefit from several tailwinds, including the ongoing adoption of cloud computing, 5G networks, and artificial intelligence applications, and the proliferation of Internet of Things devices. Those trends will put pressure on data center infrastructure, creating a need for faster networking solutions over time. With that in mind, Arista estimates its total addressable market will grow at 13% annually to reach $51 billion by 2027.

Currently, shares trade at a reasonable 10.5 times sales, slightly above its three-year average of 10.3 times sales. At that price, Arista is still well positioned to produce market-beating returns for patient shareholders.

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>>> NICE Shares Pop After Q3 Beat; Clocks 12% Revenue Growth Backed By Cloud Momentum


Benzinga

by Anusuya Lahiri

November 10, 2022


https://finance.yahoo.com/news/nice-shares-pop-q3-beat-132722257.html



NICE Ltd (NASDAQ: NICE) reported third-quarter FY22 non-GAAP revenue growth of 12.2% year on year to $554.7 million, beating the consensus of $548.8 million.

Non-GAAP revenues from Cloud grew 26% Y/Y to $330.5 million.

The non-GAAP gross margin expanded 120 bps to 73.5%, while the non-GAAP operating margin expanded 40 bps to 28.7%.

Non-GAAP EPS of $1.92 beat the consensus of $1.87.

NICE generated $94.3 million in operating cash flow and held $1.46 billion in cash and equivalents.

CEO Barak Eilam said, "We reported double-digit growth in total revenue driven by another excellent quarter in cloud revenue, which grew 27% at constant currency."

Eilam continued, "We are witnessing a dramatic shift in the enterprise software landscape that is creating massive opportunities for some and unbridgeable gaps for others."

Outlook: NICE reiterated the FY22 non-GAAP revenue outlook of $2.168 billion - $2.188 billion (consensus: $2.18 billion).

NICE boosted non-GAAP EPS from $7.33 - $7.53 to $7.40 - $7.60 (consensus: $7.45).

Price Action: NICE shares traded higher by 9.69% at $184.02 in the premarket session on the last check Thursday.

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>>> NICE Ltd. (NICE), together with its subsidiaries, provides cloud platforms for AI-driven digital business solutions worldwide. It offers CXone, a cloud native open platform that supports contact centers ranging from small single sites to distributed remote agents and enterprises; Enlighten, an AI engine for CX that discovers automation opportunities for self-service; digital-entry points solutions that enable organizations to address consumers' needs; and journey orchestration solutions that empower organizations to connect and route customers to deal with the customer's request, and connecting them using real time AI-based routing. The company also provides smart self service solutions that empower organizations to build intelligent automated conversations based on data; and prepared agent solutions and tools enable contact center agents to guide and alert them in real time so they can provide resolutions; complete performance solutions that help organizations to record structured and unstructured customer interaction and transaction data; and NICE Evidencentral, an digital evidence management platform for public safety emergency communications, law enforcement, and criminal justice helps agencies. In addition, it offers X-Sight, is an open and flexible AI-cloud platform for financial crime and compliance; Xceed, a cloud platform for comprehensive AML and fraud prevention for small and mid-sized organizations; data intelligence solutions that enable organizations to turn raw data into comprehensive actionable intelligence to prevent and detect financial crimes; AI and analytics technologies to detect and prevent financial crimes in real-time; money laundering and fraud prevention solutions that help organizations adhere to capital markets compliance and anti-money laundering compliance regulations; intelligent investigations solutions; and self-service solutions that provide organizations with customization and self-development capabilities. The company was formerly known as NICE-Systems Ltd. and changed its name to NICE Ltd. in June 2016. NICE Ltd. was founded in 1986 and is based in Ra'anana, Israel.

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>>> Is Snowflake Stock A Buy? Data Analytics Specialist Rides Cloud Computing Wave


Investor's Business Daily

by REINHARDT KRAUSE

11/15/2021


https://www.investors.com/news/technology/snowflake-snow-stock-buy-now/?src=A00220


Think of Snowflake stock as a proxy on the torrid growth of cloud computing giants Amazon.com (AMZN), Microsoft (MSFT) and Alphabet's (GOOGL) Google.

Stellar customer growth enabled SNOW stock to pull off the largest initial public offering ever by a software company in September 2020. The Snowflake (SNOW) IPO raised $3.4 billion.

But is Snowflake stock a buy right now? One issue is how software growth stocks are doing generally. The iShares Expanded Tech-Software Sector ETF rose 10% in October after falling 5.7% in September. For the year, the index is up 24%.

As of Nov.15, SNOW stock has gained nearly 40% in 2021. Snowflake stock reports third quarter earnings on Dec. 1.

SNOW stock was added to the IBD Leaderboard on Oct. 14. The Leaderboard is IBD's curated list of leading stocks that stand out on technical and fundamental metrics.

SNOW Stock: Synergy With Cloud Computing Giants

Many companies are turning to cloud computing services as part of "digital transformation" projects that aim to gain business insights from crunching massive volumes of data. The cloud computing titans offer their own data analytics and management tools.

But the cloud giants make Snowflake's platform available to their customers. The reason is Snowflake's tools are better at some key tasks, such as letting companies compile, view, analyze and share massive amounts of data in an easy way.

Nearly two-fifths of Fortune 500 companies use Snowflake's software in the cloud as they move away from on-premise data warehousing products from Teradata (TDC), Oracle (ORCL) and IBM (IBM).

One Snowflake customer is pharma giant Pfizer (PFE). Pfizer uses Snowflake tools to forecast product sales and to gain insights into the distribution of the Covid-19 vaccine.

Snowflake Stock: Competition Increasing

Snowflake stock hit an all-time high of 429 in early December last year. But SNOW stock swooned in late 2020 amid analyst concerns over its lofty valuation.

At a June 10 analyst day, Snowflake laid out a path to $10 billion in product revenue by fiscal 2029, which coincides with calendar 2028. The $10 billion revenue target would result in a compound annual growth rate of 44%.

The company said it expects to increase the number of customers with over $1 million in product revenue. Snowflake also guided to long-term operating margin of 10%-plus, lower than some analysts expected.

Snowflake in July announced support for digital advertising standard Unified ID 2.0. Advertising is one of Snowflake's largest verticals with customers representing a large percentage of players in the space, noted a RBC Capital report. The move comes as Google phases out internet cookies for targeted advertising.

Whether Amazon Web Services or Google cloud ratchet up competition remains a concern for SNOW stock. Plus, competition with privately held Databricks is heating up. A February funding round valued Databricks at $28 billion.

Databricks, which uses artificial intelligence, is expected to launch its own IPO. Hewlett Packard Enterprise (HPE), with its GreenLake platform, is another rival.

Snowflake stock bulls point to its seasoned management team as a strength no matter what unfolds.

Two former Oracle engineers — Benoit Dageville and Thierry Cruanes — along with Marcin Zukowski, former chief executive of startup Vectorwise, started Snowflake in 2012. The company holds patents in database architecture, data warehouses and other areas.

SNOW Stock: ServiceNow Veterans Lead Company

Snowflake brought in Frank Slootman as chief executive in May 2019. Slootman had stepped down as CEO of ServiceNow in early 2017. Former ServiceNow Chief Financial Officer Mike Scarpelli in 2019 also joined Snowflake in the same CFO position.

Unlike legacy, on-premise data management systems, Snowflake's platform was built from the ground up for cloud computing. It provides 100% of its software over the internet.

Snowflake customers can share data with their partners across multiple online storage systems using the company's data warehouse. Snowflake also enables easily searchable data to be shared among applications.

Snowflake's data analytics tools became available on Amazon Web Services in 2015, Microsoft's Azure in 2018 and on Google's cloud platform in 2020.

In June, Snowflake partnered with C3.ai (AI). The two companies will cooperate in offering artificial intelligence tools to companies.

Amazon Web Services A 'Frenemy'

"While Snowflake is multi-cloud, it derives some 85% of its revenues from data analytics jobs deployed on Amazon Web Services, which is also Snowflake's biggest rival with AWS Redshift," UBS analyst Karl Keirstead said in a recent note to clients.

"This 'frenemy' relationship is critical to Snowflake's success," Keirstead went on to say. "AWS benefits far more from Snowflake spending on compute and storage infrastructure resources than they lose in the form of foregone AWS Redshift revenues. Snowflake represents a dream customer and partner for AWS and Microsoft Azure."

Snowflake has focused on six core markets, including financial services, health care and life sciences, retail and consumer packaged goods, advertising media and entertainment, technology, and the government sector.

When Snowflake went public in September it used a dual-class share structure that gave its CEO and insiders super-voting rights. However, Snowflake eliminated the dual-class structure in March.

Snowflake had been based in San Mateo, Calif. Amid the shift to remote work spurred by the coronavirus emergency, Snowflake in May said it no longer has a corporate headquarters. It designated Bozeman, Mont., as its principal executive office. Slootman and Scarpelli are based in Bozeman.

Snowflake Stock Fundamental Analysis

Software stocks typically trade as a multiple of forward-looking revenue growth. Software-as-a-service, or SaaS, companies, such as Salesforce.com (CRM), typically provide the highest revenue growth. Salesforce is a key marketing partner of SNOW stock.

Snowflake also partners with consulting firms such as Deloitte and information technology firms such as privately held Informatica.

Snowflake is not an SaaS company, however. Instead, it uses a consumption-based business model based on how much data its customers crunch and store.

Snowflake's revenue growth stands out. But there's less transparency and predictability than with subscription-based, recurring-revenue SaaS business models, analysts say.

"SNOW has a consumption model, whereby customers contract for a certain amount of compute and storage capacity," Mizuho Securities analyst Gregg Moskowitz said in a note. "The company only records revenue, however, as that capacity is used, so there can be a lag of several months or more before revenue recognition begins."

Snowflake is nearing an annual revenue run-rate of $1 billion. That's a big milestone for software growth companies. But SNOW stock is unprofitable on the two most common accounting standards.

Many software companies are unprofitable using GAAP earnings, or generally accepted accounting principles, which includes stock-based compensation. But they're profitable on a non-GAAP or "adjusted" earnings basis.

Snowflake Stock Gains Traction In Large Deals

Snowflake's July quarter decelerated from the previous quarter but topped analyst estimates as it gained traction with large deals in the financial services and healthcare markets.

Snowflake said July-quarter revenue jumped 104% to $272.2 million from a year earlier. Analysts had estimated Snowflake revenue of $256.5 million.

Snowflake sales soared 110% in the April quarter and 117% in the January quarter.

The provider of cloud-based data analytics software said product revenue rose 103% to $254.6 million vs. estimates of $240 million.

In addition, Snowflake said it now has 116 customers with "trailing 12-month product revenue greater than $1 million," up from 104 such customers as of April 30.

"SNOW stock ended the quarter with 12 net new $1 million-plus customers (vs. 27 last quarter, 8 a year ago), bringing total $1 million-plus customers to 116," said Cowen analyst J. Derrick Wood in a report. "Management cited strength come from rising deal sizes, strong competitive win rates, high sales productivity levels and balanced demand across geographies, customer segments and verticals. SNOW's recent vertically-focused, go-to-market initiatives are resonating particularly well in financial services and healthcare."

For the October quarter, Snowflake forecast product revenue in a range of $280 million to $285 million, above estimates of $270.5 million.

SNOW Stock Technical Analysis

Snowflake stock went public on Sept. 16, 2020, at 120 a share. At the time, software growth stocks were hot as investors sought recurring revenue amid the coronavirus emergency.

SNOW stock popped as high as 319 on the first day of trading and closed 111.6% above the IPO price at 253.93. Shares pulled back as analysts debated Snowflake's valuation.

Snowflake stock forged a cup-with-handle base over the next two months. The new base created an entry point of 301. SNOW stock blew past the buy point, hitting an all-time high of 429 on Dec. 8.

Snowflake stock hit a 12-month low of 184.71 on May 13.

Is Snowflake Stock A Buy Right Now?

Snowflake stock still trades at a substantial premium as a multiple of forward-looking revenue growth. SNOW stock holds an IBD Composite Rating of 69 out of a best possible 99, according to IBD Stock Checkup.

IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.

One bright spot is that Snowflake stock owns an Accumulation/Distribution Rating of A-minus, according to IBD MarketSmith analysis. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading.

The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.

Snowflake stock forged a new entry point of 328.16, just above its Sept. 17 high. But as of Nov. 15, Snowflake stock is extended and not in a buy zone.

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>>> Pentagon asks Amazon, Google, Microsoft and Oracle for bids on new cloud contracts


CNBC

NOV 20 2021

by Jordan Novet


https://www.cnbc.com/2021/11/19/pentagon-asks-amazon-google-microsoft-oracle-for-cloud-bids.html


KEY POINTS

The U.S. Defense Department expects to dole out cloud contracts to multiple companies.

The new push comes after the Pentagon scrapped its plans for a single-vendor cloud contract for Microsoft worth up to $10 billion over a decade.


The U.S. General Services Administration said Friday that the Defense Department has solicited bids from Amazon, Google, Microsoft and Oracle for cloud contracts.

The outreach comes after the Pentagon set aside a highly contested $10 billion contract that Microsoft had won and Amazon had challenged. The value of the new contracts is not known, but the Defense Department estimates it could run into the multiple billions of dollars.

The new effort, known as Joint Warfighting Cloud Capability, or JWCC, appears like it will bolster the top global cloud infrastructure providers, Amazon and Microsoft, although it could also provide more credibility to two smaller entities.

“The Government anticipates awarding two IDIQ contracts -- one to Amazon Web Services, Inc. (AWS) and one to Microsoft Corporation (Microsoft) -- but intends to award to all Cloud Service Providers (CSPs) that demonstrate the capability to meet DoD’s requirements,” the GSA said in its announcement.

An indefinite delivery, indefinite quantity, or IDIQ, contract includes an indefinite amount of services for a specific period of time.

The GSA said only two U.S. cloud infrastructure providers, Amazon and Microsoft, appear able to comply with all of the Pentagon’s requirements, which include “tactical edge devices” that can operate outside of traditional data centers and support all levels of data classification.

Amazon and Microsoft were the finalists for a single Joint Enterprise Defense Infrastructure, or JEDI, contract. That contract was meant for a single provider and was expected to be worth up to $10 billion over 10 years. Microsoft won it in 2019, Amazon filed a protest and the Pentagon canceled the contract in July.

Andy Jassy, currently Amazon’s CEO and previously head of AWS, argued that there was political interference in the award of the contract. Guy Snodgrass, who was speechwriter for former Defense Secretary James Mattis, asserted in a book that former President Donald Trump called Mattis and said to “screw Amazon” out of a chance to bid on JEDI. But the Pentagon’s inspector general determined the contract did not seem to have been influenced by the White House.

The JWCC differs from JEDI because it allows the Pentagon to rely on multiple cloud providers.

The Pentagon expects each of the IDIQ contracts to have a three-year base period and two year-long option periods.

“Oracle is delighted to be included in the Joint Warfighter Cloud Capability RFP,” Oracle spokesperson Deborah Hellinger said. “We are committed to delivering the highest level of security, performance, and value in enterprise cloud applications and cloud infrastructure in support of DOD’s Warfighter mission.”

Google spokesperson Ben Jose pointed to a blog post from last week that said the company planned to pursue a bid for the military contract, noting the Pentagon is the world’s largest employer. CNBC reported Monday that executives attempted to tactfully address growing employee concern over the contract and previously established artificial intelligence principles, after employees protested against Google’s plans to bid on the JEDI contract.

“Our commitment to supporting our nation’s military and ensuring that our warfighters and defense partners have access to the best technology for the best value is stronger than ever,” an AWS spokesperson told CNBC in an email. “We look forward to continuing to support the DoD’s modernization efforts and building solutions that help accomplish their critical missions.”

Microsoft declined to comment.

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>>> GE Appliances signs multi-year smart home deal with Google Cloud
GE Appliances


CloudTech

By Fin Strathern

20th August 2021


https://cloudcomputing-news.net/news/2021/aug/20/ge-appliances-signs-multi-year-smart-home-deal-with-google-cloud/


GE Appliances has signed a multi-year partnership deal with Google Cloud to build the next generation of smart home technologies.

The partners will combine their expertise – GE Appliances in hardware and Google Cloud in data, artificial intelligence, analytics, and machine learning – to deliver new smart home technologies and improved experiences.

Viren Shah, CDO of GE Appliances, said:

“As the fastest-growing appliance manufacturing company in the United States and with more than a century of industry experience, we are committed to continuing our evolution and fulfilling our promise to deliver the best appliances to our owners and customers.

Bringing together Google and GE Appliances to co-innovate and build advanced technologies is a key driver propelling this evolution forward.”

The company also notes that it will benefit from Google Cloud’s seamless integration with other Google platforms and technologies such as Android and Google Assistant while also being able to tap into powerful capabilities like Vision AI.

Google’s cloud platform will also enable the appliance company to enhance its AI-enabled intelligent product platform that can help manage fleets of appliances and decrease unplanned downtime.

Dominik Wee, managing director of manufacturing and industrial at Google Cloud, commented:

“GE Appliances is an award-winning, smart home innovator that gives consumers the forward-thinking features and capabilities they want and expect.

Marrying GEA’s expertise in smart home appliances with Google Cloud’s data analytics and AI/ML will deliver industry-leading, innovative appliances and digital experiences that will delight consumers for years to come.”

GE says that it intends to integrate the capabilities offered by Google Cloud across its entire appliance development process, from concept to production.

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>>> UK government advises firms to use cloud to reduce carbon emissions
CO2 Pollution


Cloud Tech

By Fin Strathern

17th August 2021


https://cloudcomputing-news.net/news/2021/aug/17/uk-government-advises-firms-to-use-cloud-to-reduce-carbon-emissions/


UK businesses are being told to accelerate cloud adoption in an upscaled effort to tackle climate change, the UK government’s Department for Business, Energy and Industrial Strategy (BEIS) has advised.

The recommendation is part of a series of steps that businesses are being told to consider to help curb their carbon emissions by making changes to their technological habits.

This in turn is part of a wider push by the government to encourage businesses to get behind its climate change-tackling net-zero emissions campaign, in which firms across the country are being challenged to halve their carbon footprints by 2030.

Businesses are also being encouraged to join the BEIS-backed UK Business Climate Hub initiative, which challenges its members to become net-zero entities by 2050.

“Net-zero means that you are putting no more carbon into the atmosphere than you are taking out of it,” said the advisory notice. “Through the government’s United Nations-backed commitment process, you’re joining an international community of thousands of like-minded businesses.”

From a technology purchasing perspective, BEIS said one action companies should take is to consider moving more of their on-premise IT infrastructure to the public cloud instead of continuing to house it within their own private datacentres.

“Large cloud providers are generally more energy efficient than traditional enterprise datacentres,” said the advisory note. “That’s thanks to IT operational and equipment efficiency, datacentre infrastructure efficiency and a higher utilisation of renewable energy. So consider moving from on-premise servers to the cloud.”

Andrew Griffith, the government’s business net-zero champion, said the advice issued by BEIS is a positive step that all businesses can take to help curb their carbon emissions.

“From buying energy-efficient equipment to sourcing large cloud providers, these small steps can collectively make a big difference in helping us fight climate change and create a brighter and more sustainable future,” he pointed out.

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>>> NSA quietly awards $10 billion cloud contract to Amazon, drawing protest from Microsoft


Bloomberg

By Aaron Gregg

August 11, 2021


https://www.washingtonpost.com/business/2021/08/11/amazon-nsa-contract/


The National Security Agency has quietly awarded a contract worth up to $10 billion to Amazon Web Services, setting off another high-stakes fight among rival tech giants over national security contract dollars.

On July 21 the Redmond, Wash.-based Microsoft filed a formal bid protest with the Government Accountability Office, an independent federal agency that handles contract disputes, after Microsoft applied for the opportunity and was rejected. A decision is expected by Oct. 29.

The contract award comes on the heels of a protracted and bitter dispute over a Pentagon contract, also worth up to $10 billion, which was given to Microsoft before getting bogged down in lawsuits and ultimately scrapped. If the NSA can fight through an often bruising bid protest process, the new contract could extend Amazon’s lead in the fast-growing cloud computing market where rivals are gaining on it.

Pentagon cancels $10 billion JEDI contract challenged by Amazon, ending long-contested cloud procurement deal

The NSA has offered few details about the purpose of the contract. An NSA spokesman said the agency had awarded a contract for “cloud computing support services,” but declined to elaborate or specify who won it. “The agency will respond to the protest in accordance with appropriate federal regulations,” the spokesman said.

Two people with direct knowledge of the contract, speaking on the condition of anonymity to discuss proceedings that haven’t been made public, confirmed that Amazon is the awardee, and that the maximum value of the cloud deal is $10 billion. Amazon’s receipt of the contract was first reported by Washington Technology and later confirmed by NextGov. Both are trade publications focusing on military technology and procurement issues. Both publications said the contract carries the code name “WildandStormy.”

A Microsoft spokeswoman confirmed the company has protested the NSA’s decision. “We are exercising our legal rights and will do so carefully and responsibly,” the spokeswoman said. An Amazon spokesman referred questions to the National Security Agency.

Amazon founder Jeff Bezos owns The Washington Post.

The NSA’s decision to award such a large contract to a single company is sure to stir up controversy in a national security ecosystem where large deals with big tech companies have occasionally been fraught with allegations of bias and undue influence.

“Any time you have these large contracts with hundreds of millions of dollars in spending, without much knowledge of the competition, it draws intense scrutiny. … It just depends on whether the agency can withstand that scrutiny,” said Alan Chvotkin, a government contracts attorney with the law firm Nichols Liu.

The Defense Department recently pulled the plug on a different long-planned cloud computing award after years of bid protests and dueling allegations of corruption. That contract, the Joint Enterprise Defense Infrastructure, or JEDI for short, was given to Microsoft shortly after former president Donald Trump took interest in the procurement. There are also allegations that Amazon had an unfair advantage due to its relationships with federal officials.

The NSA award is likely to improve Amazon’s prospects in the insular national security sector, where untold billions in spending from the Pentagon and the intelligence community represent a lucrative growth market.

The e-commerce giant has been making inroads there for years. It got an early foothold in 2013 when it secured a $600 million cloud contract with the CIA. That work accelerated Amazon’s capabilities with respect to handling classified and top secret data, while also allowing other government agencies to access its services.

Microsoft’s surprise 2019 JEDI win upended the federal IT world and, for a time, allowed Microsoft to say it was the U.S. military’s favored cloud provider. Microsoft had already been gaining on Amazon; updating its technology with defense work in mind, and obtaining new security clearances required for sensitive national security work.

Amazon’s bid protest ultimately halted Microsoft’s progress, as a protest-weary Pentagon opted to start a new procurement open to both companies. AWS also won a seat on a different intelligence community contract, estimated to be worth tens of billions of dollars, that was given jointly to five major cloud providers.

The nature of the NSA’s work makes it hard to determine what sort of business, if any, Amazon has with the famously secretive agency. Last year the company added Keith Alexander, a former NSA director who is influential in the cybersecurity industry, to its board.

John Weiler, a former Oracle employee who now works with the IT Acquisition Advisory Council, said the NSA’s strategy bears an unfortunate similarity to the Pentagon’s JEDI contract.

“Amazon is still sitting as the dominant force in government cloud, but Microsoft had preexisting monopolies of its own,” Weiler said. “You have two monopolists fighting to dominate a market that is very rich and very large.”

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ExlService Holdings - >>> EXL, AWS Extend Partnership To Drive Cloud Migration of Enterprise Business Processes


Benzinga

by Anusuya Lahiri

June 30, 2021


https://finance.yahoo.com/news/exl-aws-extend-partnership-drive-200254070.html


ExlService Holdings Inc (NASDAQ: EXLS) expanded its Amazon.com Inc’s
Amazon Web Services collaboration to help EXL clients operationalize AI, Analytics, Automation, and Cloud technologies within enterprise business processes.

EXL addresses the challenges of operationalizing data-driven technologies through its robust AI Operating System architecture, known as AI: OS.

AWS capabilities were critical to meet the aggressive transformation timelines and impact expectations of EXL’s clients, EXL Chief Digital Officer Ankor Rai said.

EXL also leveraged AWS infrastructure and AWS Training & Certification services to drive the development and deployment of domain-specific cloud solutions across the client enterprise and their corporate learning and development programs to drive a new cohort of EXL Digital employees.

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>>> 81% of firms have accelerated their cloud computing plans due to COVID-19


Cloud Tech

By Duncan MacRae

June 14, 2021


https://cloudcomputing-news.net/news/2021/jun/14/81-of-firms-have-accelerated-their-cloud-computing-plans-due-to-covid-19/


The global pandemic, and associated surge in remote work, has accelerated a massive move to cloud with cloud-first organisations now outnumbering on premise organizations by a ratio of three-to-one.

This was highlighted in a study by Devo Technology, a cloud-native logging and security analytics company, which assessed the current state and pace of change with regards to enterprise cloud transformation initiatives and the ramifications on teams running a Security

As many as 81% of organisations voicing that COVID had accelerated their cloud timelines and plans. Across these companies, there was a 200% jump in organizations planning to move more than 75% of their apps/workloads to the cloud, with 86% of companies placing cloud options in their decision process for new applications, and more than 40% choosing the cloud as their first option.

Jon Oltsik, senior principal analyst & ESG fellow, said: “It could not be more clear from our conversations with these companies that cloud considerations are no longer a project-based decision, but an ‘all-in’ business strategy.

“Even at a time of increasing regulations and risks—and increasing IT complexity driven by cloud computing proliferation – organisations are moving aggressively to transform their businesses.”

With such a massive and rapid shift, the current infrastructure of technology and people are not well aligned with these new realities, according to Devo Technology. Respondents cited significant issues of complexity and overload – most notably, 80% citing as much as 40% more security data on which they need to analyze and act. The staffing costs are also high with 41% citing challenges of increased workload, and 35% identifying a security skill mismatch – all resulting in higher exposure. In 60% of organisations, they have seen an increase in threat and attack complexity and in more than 60%, it has exposed weaknesses in legacy security toolsets.

Ted Julian, SVP of product at Devo, said: “While dramatic change is a constant in security, it’s safe to say that 2020 challenged security professionals in unprecedented ways.

“An amazing and encouraging finding of this study is that nearly a quarter of organizations didn’t just weather the storm of change, they turned it into an opportunity to build for the future.”

ESG designated the 22% of organisations deemed high performing as ‘Cloud Evangelists’, characterising them as businesses with high adoption rates of cloud and cloud-based security controls.

With nearly 80% of these organisations seeing an increase in security spending for cloud, those moving aggressively to transform their security made substantive changes, including:

More than 40% have implemented automated security processes to detect and respond to attacks on cloud workloads.

More than half have instituted cloud security training for the SOC, and 36% added security staff.

Nearly 90% believe their organisation’s public cloud security spending will increase over the next 12 months

The all-in approach taken by Cloud Evangelists has not only allowed organisations to keep pace with change, but also positively affect the operational strength of the business overall, according to Devo Technology. More than 50% said these security changes increased the pace of application development and deployment, and 62% indicated it eased the ability to adopt new technologies. Finally, 56% cited “high confidence” in security visibility into cloud workloads.

These changes by Cloud Evangelists highlight the organisational differences from another group identified in the report, Cloud Adopters (11% of survey participants), which represents organisations that are adopting cloud computing but are not as aggressive toward adoption of cloud-based security controls. When it comes to this group that are on the right track of shifting to the cloud, the report findings showed:

Adopters report a less significant positive impact of cloud computing on adopting new technologies, with only 42% reporting positive impact.

Adopters are also playing catch up to Evangelist when it comes to resources. 36% of Adopters are adding capacity or resources to security compared to 48% among Evangelists.

Adopters are nearly neck-and-neck with Evangelists with 24% strongly agreeing that adopting cloud computing exposed limitations of existing tools in providing security visibility.

The survey was conducted by the Enterprise Strategy Group (ESG) and involved 500 IT and security personnel in the ‘SOC chain of command’ at enterprise-class (i.e., more than 1,000 employees) organisations in North America and Western Europe in January 2021.

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Snowflake - >>> 3 Software Stocks to Pick Up in the Next Market Crash

Software stocks could be in for a nasty correction this year. Here are three to keep on your watchlist if that happens.


Motley Fool

by Billy Duberstein

Feb 2, 2021


https://www.fool.com/investing/2021/02/02/3-software-stocks-to-pick-up-in-the-next-market-cr/


Some of the biggest winners from the very odd year of 2020 were cloud software stocks. In fact, business was so good that many software unicorns decided to go public amid surging stock prices. If your product enabled work-from-home, facilitated better and faster data use, or secured enterprise infrastructure, your stock likely rocketed higher.

However, after a stunning 2020, these names could be in for a correction. Many trade at nosebleed valuations. Meanwhile, recent short squeezes may cause hedge funds to sell other big winners, including these enterprise software stocks. The rollout of vaccines may cause investors to gravitate toward "reopening" stocks in travel, financials, and other cyclical stocks at the expense of cloud software.

But while SaaS stocks may face a challenging year ahead, all are ushering in a powerful new data era. So if there's a pullback in the space, long-term investors may get an attractive entry position. The following three cloud leaders are currently on my radar.


JFrog

JFrog (NASDAQ:FROG) is one of the high-flying SaaS companies that went public in the busy month of September 2020. JFrog's tools enable "liquid software" updates, or continuous updates and patching of applications, rather than the traditional method of constructing an entirely new code every few months (or longer).

Source code must transform into binary code in order to be deployed, and JFrog's platform allows for the storage, organization, automation, and deployment of these binary code packages. Even better, it works across all clouds, on-premises data centers, and programming languages.

As of last quarter, JFrog software was used by 75% of the Fortune 100 and 27% of the Global 2000. That may seem like JFrog has already penetrated a lot of its market. However, the company's 136% net expansion rate suggests existing customers increase their JFrog usage over time and upgrade to higher-priced tiers.

Though revenue grew "only" 40% last quarter, this may have been due to the pandemic slowing the sales cycle to new customers. Still, 40% growth is pretty good. JFrog has also shown the ability to expand gross margins and operating margins as it grows, and the company is already generating free cash flow (though it still has GAAP losses due to stock-based compensation).

JFrog anticipates it will end the year with about $150 million in revenue. At the current $5.7 billion market cap, it seems expensive, at around 38 times sales.

Nevertheless, being a cloud-neutral first-mover in an important niche is a great place to be. That's why JFrog is on my radar in case software stocks pull back in 2021.


Okta

Like JFrog, Okta (NASDAQ:OKTA) is a cloud-neutral first-mover with mission-critical functionality. Okta's identity-as-a-service software allows employees of an organization to access critical data and applications, no matter where they are. Okta has therefore been tremendously helpful in the current work-from-home environment, and should remain a strong grower as workforces become more distributed.

In fact, Okta identifies its workforce identity market opportunity at $30 billion. If the company can expand into customer-facing identity sign-on, that's another $25 billion opportunity. Meanwhile, Okta projects only $823 million in revenue for its current fiscal year, so there's a lot of room to grow.

Last quarter, Okta showed strength across the board. Customers grew 27%, and high-value customers grew 34%. Net expansion of 123% accelerated from 117% in the year-ago quarter, leading to 42% revenue growth. Remaining performance obligations, which take into account future revenue yet to be recognized, grew an even higher 53%. Gross margins, operating margins, and free cash flow margins all expanded, showing profitability is in Okta's future, even if the company currently posts GAAP losses.

Despite all this goodness, Okta currently trades at 42 times trailing 12-month sales, or about 40 times its enterprise value to FY 2021 estimates. That's high. Even if Okta hits its growth target of 35% revenue growth through 2024 and hits its free cash flow margin target of 25%, it would still make only about $683 million in free cash flow. That means the stock currently trades at 49 times its 2024 estimated cash flow. As great a company as Okta is, that doesn't give it a whole lot of margin of safety. Still, it will surely be at the top of my list should the SaaS sector fall out of favor.


Snowflake

Perhaps was Snowflake (NYSE:SNOW) was arguably the poster child for the 2020 IPO mania. Like the two aforementioned names, Snowflake is a first-mover in cloud-based data warehousing and data management. It offers a cloud neutrality that's resonating with customers. Snowflake's founders decided to go all-in on the cloud early, ignoring traditional on-premises data management. The results of that early decision have been downright impressive.

Snowflake is growing the fastest of any large software company that you might find, but it's also the most expensive. Revenue grew a stunning 118% last quarter, but like JFrog, its remaining performance obligations -- essentially pre-payments toward future usage -- doubled that rate at 240%. Customers grew 84%, and customers who spend over $1 million grew 110% as well. Fortune 500 customers grew 56% to 165. Net expansion with existing customers grew a ridiculous 162%. Over the past two years, gross margins have expanded 10 percentage points from 58% to 68%.

Snowflake's cloud platform is clearly resonating, as it's broken down the barriers and silos that previously separated various forms of data. Companies large and small can dump everything into Snowflake to discover, manipulate, and run machine learning on its data cloud. Snowflake's revolutionary data exchange allows different enterprises and data providers to safely and securely share data with each other, leading to even more and better insights. Twenty-three percent of Snowflake's customers currently use data sharing capabilities. That's likely to increase going forward.

Despite all this great news, Snowflake's stock is quite pricey indeed, having more than doubled over its IPO price of $120, which itself was raised 50% from the expected IPO price. It also trades at a lofty 158 times sales. At that height, it's possible for the business to do quite well even as the stock stagnates.

Snowflake is currently too rich for my blood, but it's an impressive company with a promising management team and future. Add it to your watchlist in the event of a market or tech sector meltdown.

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MongoDB - >>> 3 Tech Stocks That Are Better Than Snowflake

Investors can still win big with these fast-growing stocks.


Motley Fool

Chris Neiger, Danny Vena, And Brian Withers

Dec 13, 2020


https://www.fool.com/investing/2020/12/13/3-tech-stocks-that-are-better-than-snowflake/


Shares of Snowflake, a cloud data company, have soared since the company went public back in September. Some investors have flocked to the tech stock because of its massive opportunity in the cloud data space, and the fact that Warren Buffett's Berkshire Hathaway is an investor in the company.

But despite all of the attention Snowflake has received, there are still a lot of fast-growing companies that could be even better long-term investments. Here's why MongoDB (NASDAQ:MDB), Okta (NASDAQ:OKTA), and Square (NYSE:SQ) fit the description.


MongoDB: Creating a home for messy data

Danny Vena (MongoDB): One of the key takeaways from 2020 is that cloud-based solutions are no longer a luxury but a necessity, providing access anywhere, anytime. That's one of the reasons investor demand for Snowflake has been off the charts. Unfortunately, Snowflake's valuation is also off the charts, with the stock trading at 214 times its trailing-12-month sales of $490 million, making it one of the most expensive growth stocks around.

Investors looking for a less expensive cloud alternative should consider MongoDB. One of the challenges with legacy databases is that they couldn't accommodate any data that didn't fit neatly into rows or columns. That's where MongoDB comes in. The company offers a cloud-native solution that houses data and electronic information of all types, including photos, audio, social media posts, video, and even full documents.

MongoDB offers a free version of its flagship database that customers have downloaded more than 90 million times since it was introduced in 2009, and over 35 million times in 2019 alone. After experiencing firsthand the ease and utility of MongoDB's flagship product, many developers take the plunge and sign up for Atlas -- the company's cloud-centric, fully managed database-as-a-service product.

While the pandemic temporarily stunted MongoDB's growth, the company has come roaring back. In the third quarter, revenue grew 38% year over year, while subscription sales increased 39%. More importantly, adoption of Atlas grew even faster, as revenue climbed 61% year over year and now accounts for roughly 47% of the company's total sales. Not bad for a product that was introduced just four years ago.

The customer metrics are equally compelling. MongoDB added more than 2,400 customers during the quarter, bringing the total customer count to 22,600, up 42% year over year. Atlas customers grew more quickly -- to 21,100, up 49%. Those contributing at least $100,000 in annual recurring revenue climbed to 898, up 31%. Finally, the company's net AR expansion rate, which tracks the rate at which existing customers spend more, remained above 120% for the 24th consecutive quarter.

The company's customer satisfaction scores are also enviable. Atlas commands a net promoter score of 74. That's a remarkably high score; 50 or higher is considered excellent, and any number above 70 is considered world-class.

The digital transformation is ongoing and the data that needs to be stored is growing exponentially. The database software market is estimated to be $71 billion in 2020, growing to $97 billion by 2023. Considering MongoDB's revenue topped out at $422 million last year, it has a long runway for growth.

Oh, and did I mention that at just 34 times sales, it's a steal compared to Snowflake.


Okta: Taking advantage of the cloud trend

Brian Withers (Okta): Even though Snowflake is putting up massive growth, investors can get in on the cloud trend without a triple-digit nosebleed valuation. As enterprises move more of their software to the cloud, Okta's identity management platform is a key enabler to keep their infrastructure secure. It makes it easy for information technology teams to secure their cloud applications and provides authorized users the ability to sign on to all of their apps with a single password.

Cloud software is still in the early stages of adoption. IDC reports that 81% of enterprise organizations have at least one core application in the cloud, but only 13% of large companies are 100% dependent on the cloud. As businesses extend their use of cloud-based software tools, the need for a robust identity management solution like Okta's only grows stronger.

With these tailwinds, the company has grown to a $768 million trailing-12-month revenue business. For the upcoming fiscal year, its top line is expected to surpass the $1 billion mark, representing a 29% year-over-year growth. This is a decline from the current year's expected 40%, but it is likely to beat its guidance as it's done frequently in the past.

One indicator that Okta's revenue growth forecast could be light is the solid increase in its remaining performance obligations (RPO). RPO represents the total value of all customer contracts, which grew at an impressive 53% last quarter. Additionally, the company had an important win last quarter as Amazon Web Services (AWS) now includes Okta as part of its marketplace. This opens up the platform to a whole new set of customers. With stable subscription revenue accounting for 95% of its top line, investors can be confident growth will continue long into the future.

Even though Snowflake is growing faster at triple-digit rates, that growth comes at a tremendous price. Not that Okta is cheap, but its lofty price-to-sales ratio of 39 looks like a bargain next to Snowflake's 224. Okta is a better way for investors to profit as organizations continue their move to the cloud.

Square - This company is betting on the shift to digital payments

Chris Neiger (Square): For years, Square has been helping merchants of all sizes shift from physical cash to a digital payment world. The company's point-of-sale terminals are often used with digital card readers and near-field communication devices that make paying with a phone or tapping a credit card to pay easier than ever.

The pandemic has accelerated the shift to digital payments as many people have preferred not to handle physical money. This has helped boost Square's business, with third-quarter revenue skyrocketing 148% year over year (excluding its Caviar business). Square users are also spending a lot more through the company's payment platform, as gross payment volume jumped 91% in the recent quarter to $31.7 billion.

Additionally, the company's popular Cash App, which allows users to send money to friends, saw the number of its daily transacting customers nearly double year over year in the third quarter. Cash App sales also popped 174% in the quarter.

Digital payments were already becoming mainstream before the pandemic, but the trend is even more solidified now. This year the digital payment market will reach $910 billion, and by 2024 it'll be worth an estimated $1.5 trillion. For investors looking for a fast-growing tech stock that's tapping into this massive money trend, Square looks like a great long-term bet.

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>>> Snowflake Sees $20 Billion Wipeout in Week as Lockup Expires


Bloomberg

by Jeran Wittenstein

December 15, 2020


https://finance.yahoo.com/news/snowflake-market-value-losses-top-143725385.html


(Bloomberg) -- Snowflake Inc. extended a three-day slump after the expiration of a lockup that restricted company insiders from selling shares.

The stock fell as much as 7.8% to $303.54 on Tuesday before recovering much of the losses as insiders had their first opportunity to cash out on gains since the company went public in September. Snowflake has declined about 17% since closing at a record a week ago, erasing nearly $20 billion in market value.

San Mateo, California-based Snowflake more than tripled in the past three months as investors had been eager to gain exposure to the cloud computing company whose revenue growth is projected to exceed 80% next year. But after the rally added nearly $80 billion in market value at the peak, concerns increased over whether its valuation had become stretched.

The cloud-computing company is trading at 83 times next year’s revenue estimates, compared with an average of about five times for companies in the Nasdaq 100 Stock Index.

Snowflake shares have traded above the average analyst price target of $295.86 since last month. The company has nine buy ratings, 12 holds and one sell, according to Bloomberg data.

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>>> Snowflake Shares Extend Slump Ahead of Lockup Expiration


Bloomberg

by Jeran Wittenstein

December 14, 2020


https://finance.yahoo.com/news/snowflake-poised-more-selling-pressure-113000523.html


(Bloomberg) -- Snowflake Inc. shares slumped ahead of a lockup expiration on Tuesday that will give company insiders their first chance to cash out since the initial public offering three months ago.

Shares of the cloud-computing company have nearly tripled since Sept. 15 with investors becoming enamored with its triple-digit revenue growth and potential to expand market share. That’s made Snowflake the best performing U.S. company to debut this year, excluding IPOs that raised less than $1 billion, according to data compiled by Bloomberg. The stock has fallen in three of the last four trading days since closing at a record $390 on Dec. 8 and more declines could be in the offing if insiders are tempted to cash in.

Snowflake’s gains have raised concerns that after adding more than $60 billion in market value, its valuation is getting overheated. On Friday, Deutsche Bank downgraded its rating to hold from buy, warning that a further rally is probably limited as investors seek to lock in gains at the end of the year. Snowflake fell as much as 5.6% on Monday to $334.12. The stock is now down 13% from a record high.

“Any profit taking around the lockup expiry could be exaggerated by tight liquidity typical in late December and early January,” analyst Patrick Colville wrote in a research note.

Snowflake’s lockup expiration comes just three months after its debut, half the length that is typical following an IPO. Of the 22 analysts covering the San Mateo, California-based company, less than half recommend buying the stock. A Snowflake representative declined to comment.

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Veeva Systems - >>> 3 Top Large-Cap Stocks to Buy in December


Veeva Systems (VEEV), a cloud services provider for life science companies, is a solid growth stock for three simple reasons.


https://www.fool.com/investing/2020/12/06/3-top-large-cap-stocks-to-buy-in-december/


First, Veeva's cloud services help drugmakers maintain customer relationships, store and analyze data, track clinical trials and regulations, and more. Competition between these drugmakers, which remains intense regardless of the macro environment, boosts demand for Veeva's services.

Second, Veeva enjoys a first-mover's advantage in its niche market. Its list of customers include pharmaceutical giants Pfizer and Moderna, and its subscription-based ecosystem -- which lands clients with its CRM (customer relationship management) platform, then expands with additional tools for cloud storage, AI-powered analytics, and other services -- widens its moat against potential challengers. Lastly, Veeva's scale and pricing power enable it to remain firmly profitable by both non-GAAP and GAAP standards.

Veeva's revenue rose 35% year-over-year in the first nine months of fiscal 2021 (February through October 2020), and its non-GAAP net income grew 33%. It expects its revenue to rise 31% for the full year, and grow another 18% to $1.71 billion next year. It has also reiterated its long-term goal to generate $3 billion in annual revenue by 2025.

Veeva expects its non-GAAP earnings to rise 29% this year, while analysts expect 10% growth next year. Those growth rates might not seem high for a stock that trades at nearly 90 times forward earnings, but I believe its recession-resistant business model, wide moat, and stable growth rates all justify its premium valuation.

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>>> Veeva Systems Inc. (VEEV) provides cloud-based software for the life sciences industry in North America, Europe, the Asia Pacific, the Middle East, Africa, and Latin America. The company offers Veeva Commercial Cloud, a suite of multichannel customer relationship management applications, commercial data warehouse, allocation and alignment applications, master data management application, and data and services; and Veeva Vault, a cloud-based enterprise content and data management applications for managing commercial functions, including medical, sales, and marketing, as well as research and development functions, such as clinical, regulatory, quality, and safety. It also provides professional and support services in the areas of implementation and deployment planning and project management; requirements analysis, solution design, and configuration; systems environment management and deployment services; services focused on advancing or transforming business and operating processes related to Veeva solutions; technical consulting services related to data migration and systems integrations; training on its solutions; and ongoing managed services that include outsourced systems administration. Veeva Systems has collaboration with RedHill Biopharma Ltd. to enhance value of Opaganib Phase 2/3 COVID-19 clinical data. The company was formerly known as Verticals onDemand, Inc. and changed its name to Veeva Systems Inc. in April 2009. Veeva Systems Inc. was founded in 2007 and is headquartered in Pleasanton, California.

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>>> Snowflake CEO Collects a $95 Million Payout — Every Month


Bloomberg

by Tom Maloney

December 4, 2020


https://finance.yahoo.com/news/snowflake-ceo-collects-95-million-153441751.html


(Bloomberg) -- Snowflake Inc. is doing well by any stretch of the imagination.

This week, the cloud-computing company reported that third-quarter revenue more than doubled from a year earlier, and its stock has surged 223% since its Sept. 15 initial public offering.

That has helped make Chief Executive Officer Frank Slootman one of the best-paid technology executives. A compensation package he received upon joining Snowflake in April 2019 awards him a batch of options every month -- for four years -- that are now worth more than $108 million each, or about $1.3 billion annually.

Slootman’s pay includes more than 13.7 million options with a strike price of $8.88. The vast majority can already be exercised but the underlying shares vest monthly over four years, beginning with the month he started.

He also gets a $375,000 annual base salary, which can go higher depending on the firm’s performance.

Once the full options package is paid out in early 2023, it would be worth about $5.2 billion based on the latest share price. Snowflake shares jumped more than 14% on Friday to $387.70.

A spokeswoman for San Mateo, California-based Snowflake declined to comment on Slootman’s pay package or net worth.

He hasn’t exercised any of his options and his shares are subject to a lockup period that ends in March.

The monster pay package is partly a result of Snowflake’s surging valuation. In October 2018, about six months before Slootman joined and negotiated his compensation, the company raised funds at a valuation of about $3.5 billion. It’s now worth almost $110 billion.

Chief Financial Officer Michael Scarpelli, who joined a few months after Slootman, has a similar compensation structure. His options are worth about $29 million a month. Snowflake co-founder Benoit Dageville, who’s also chief technology officer, owns a $3.1 billion stake.

Snowflake is the third CEO gig for the Dutch-born Slootman in less than 20 years. He led data-storage firm Data Domain from 2003 until its takeover by EMC Corp. in 2009, then ran cloud-service firm ServiceNow Inc. from 2011 to 2017.

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>>> Snowflake Is the World’s Most Expensive Software Company. The Street Just Raised Its Price Targets.


Barron's

By Eric J. Savitz

Dec. 3, 2020


https://www.barrons.com/articles/snowflake-stock-spikes-as-street-ups-price-targets-after-first-earnings-report-51607012924?siteid=yhoof2


Snowflake is easily the world’s most expensive software company.

Snowflake shares are trading sharply higher Thursday, as Wall Street analysts celebrate the cloud-based data warehouse company’s first quarterly earnings report since its initial public offering in September.

Snowflake (ticker: SNOW) went public in mid-September at $120 a share, more than doubling on the first day of trading to $253.93. The stock gradually traded higher from there, peaking at $342 on an intraday basis.

While the stock dipped in after-hours trading on Wednesday night, it sharply reversed course on Thursday, with at least 10 Wall Street analysts raising their price targets on the company. The challenge for the Street is valuation: With a market cap of about $90 billion, the stock is trading at about 160 times current estimates for fiscal-year 2021 sales, and about 83 times estimated fiscal-year 2022 sales.

That makes Snowflake easily the most expensive software company on earth—but not many companies are producing 100%-plus sales growth.

For the fiscal third quarter ended Oct. 31, Snowflake posted total revenue of $159.6 million, up 119% from a year ago, with product revenue of $148.5 million, up 115%. The company reported “remaining performance obligations” of $927.9 million, up 240%, with a “net revenue retention rate,” a measure of repeat business, of 162%.

Snowflake reported an operating loss of $48.1 million, for an operating margin of minus 30%, free cash flow of minus $37.9 million, and adjusted free cash flow of minus $37.1 million. The company had a net loss of $1.01 a share.

BTIG analyst Gray Powell notes that Snowflake topped Street expectations for gross profit, product revenue, and operating loss. “The company is seeing improved momentum with larger enterprise customers, better unit economics and improved net retention rates,” he writes in a research note. “Some could pick at Q4 product revenue guidance where the $164.5 million midpoint was slightly below the Street at $166.1 million. However, we think it will likely be viewed as conservative given the magnitude of the Q3 beat. Plus, it is hard to complain when growth remains at 100%+ at this scale.”

Powell adds that he came away from the report “with a higher degree of confidence in the long term growth story,” but he keeps his Neutral rating “due entirely to valuation.”

Piper Sandler analyst Brent Bracelin was “impressed” with the quarter. He writes in a research note that Snowflake “remains the fastest growing cloud software firm,” adding 12 Fortune 500 customers in the quarter, topping 70% gross margins for the first time, and showing surprising growth in remaining performance obligations. “The pace of new multi-year enterprise deals gives us confidence in the longer-term growth trajectory,” he writes. Bracelin repeats his Overweight rating, and ups his target to $312 from $264. (Note that the stock on Thursday is already above his target price.)

Oppenheimer analyst Ittai Kidron writes in a research note that Snowflake delivered “solid results topping Street expectations,” with customer metrics that were “best-in-class, highlighting solid execution and a massive opportunity.” He notes that guidance was “only in line,” reflecting a conservative approach in the current environment, but he sees “a long runway for growth ahead.” Kidron repeats his Outperform rating and ups his price target to $320 from $300. (The stock has blown past his target, too.)

Clearly, the challenge for Snowflake investors remains valuation. Morgan Stanley analyst Keith Weiss concedes in a research note that the company has “blazing growth,” but he keeps his Equal Weight rating, even as he moved up his target price to $265 from $220, noting that the company’s valuation “leave us waiting for a better entry point.”

He’s not getting one today. Snowflake stock is up 13.5%, at $335, in recent trading. The S&P 500 is up 0.2%.

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>>> Snowflake Announces New Features to Mobilize the World’s Data in the Data Cloud


MarketWatch

November 17, 2020


https://finance.yahoo.com/news/snowflake-announces-features-mobilize-world-171500679.html


Key features include expansion of Snowflake Data Marketplace, unveiling of Snowpark developer experience, support for unstructured data, and new data governance technology

Snowflake (NYSE: SNOW), creator of the Data Cloud, today announced new features that will deliver even more value for customers. The Data Cloud is a global network where thousands of organizations mobilize data with near-unlimited scale, concurrency, and performance. Inside the Data Cloud, organizations can unite their siloed data, easily discover and securely share governed data, and execute diverse analytic workloads. The new features announced today will enable Snowflake customers to work with more types of data, have a more powerful developer experience, deliver more control over data, and access data services within the Data Cloud.

The speed at which data is generated continues to increase but the proliferation of data silos means organizations can access only a small proportion of data inside or outside their businesses. Snowflake created the Data Cloud to unlock the value of data by eliminating on-premises and cloud-generated data silos created within organizations and across their subsidiaries, business ecosystems, geographies, and the one or more public cloud providers they use.

"Data is central to how we run our lives, businesses, and institutions," Snowflake Co-Founder and President of Products, Benoit Dageville said. "Many of today’s organizations still struggle to mobilize all of their data in service of their enterprise. The Data Cloud contains a massive amount of data from Snowflake customers and commercial data providers, creating a powerful global data network effect for mobilizing data to drive innovation and create new revenue streams."

Today, Snowflake announced new features, including:

Snowpark – A new developer experience that will allow data engineers, data scientists, and developers to write code in their languages of choice, using familiar programming concepts, and then execute workloads such as ETL/ELT, data preparation, and feature engineering on Snowflake. This simplifies an organization’s IT architecture by bringing more data pipelines into Snowflake’s single, governed core data platform. By doing so, data professionals seamlessly leverage the scalability, performance, security, and near-zero maintenance benefits of Snowflake. Snowpark will enable developers to leverage existing skill sets, improve team productivity, reduce cost with fewer systems in a customer’s architecture, and extend Snowflake’s capabilities for additional data engineering and data science use cases. Snowpark is currently available in testing environments only.

Data Services on Snowflake Data Marketplace – Snowflake Data Marketplace enables any Snowflake customer to discover and access live, ready-to-query, third-party data sets from more than 100 data providers, without needing to copy files or move the data. Announced today, the marketplace now also features data service providers. A Snowflake Data Marketplace user can create live, secure, and bi-directional access to the data they want a service provider to perform a range of data enrichment services on, such as running risk assessments on a customer’s data, augmenting a data set with behavioral scoring, or simply outsourcing the more advanced analysis such as predictive and prescriptive data analysis.

Unstructured Data – The portion of the world's data that is unstructured is quickly increasing. In addition to structured and semi-structured data, Snowflake announced support for unstructured data such as audio, video, pdfs, imaging data and more – which will provide the ability to orchestrate pipeline executions of that data. Unstructured data management in Snowflake means customers will be able to avoid accessing and managing multiple systems, deploy fine-grained governance over unstructured files and metadata, and discover new revenue opportunities thanks to gaining more complete insights. This feature is currently in private preview.

Row Access Policies – Customers will be able to advance their data governance across all data objects and workloads in Snowflake. Row access policies will give Snowflake customers the ability to create policies for restricting returned result sets when queries are executed. By creating an umbrella policy to restrict access, users will no longer need to worry about ensuring their queries contain all the right constraints, and security administrators can ensure policies are applied across all workloads running on the platform. For example, an organization's security team can easily implement a policy that returns to its sales reps only the rows of customer data they need to see and not customer data associated with other sales reps. Row access policies are designed to mitigate risk, improve governance, and help organizations better adhere to regional and industry-specific data privacy regulations. Snowflake’s row access policies feature is expected to be in private preview later this year.

"With Snowflake, we are able to let business units at Emirates do their own ingestion, create their own models, and the governance around it," Emirates Program Director, Naveed Memon said. "This was never a possibility before, and has brought our IT self-service capability to a completely different level."

"Snowflake’s platform enables organizations to leverage the power of the Data Cloud regardless of which supported public cloud they use, or where an organization’s data or users are located," Snowflake’s Senior Vice President of Product, Christian Kleinerman said. "The new features announced today are another example of Snowflake’s commitment to delivering the technology customers need to fully mobilize their data and achieve meaningful business value."

To learn more about Snowflake’s vision for the Data Cloud, visit the Snowflake blog.

About Snowflake

Snowflake delivers the Data Cloud — a global network where thousands of organizations mobilize data with near-unlimited scale, concurrency, and performance. Inside the Data Cloud, organizations unite their siloed data, easily discover and securely share governed data, and execute diverse analytic workloads. Wherever data or users live, Snowflake delivers a single and seamless experience across multiple public clouds. Snowflake’s platform is the engine that powers and provides access to the Data Cloud, creating a solution for data warehousing, data lakes, data engineering, data science, data application development, and data sharing. Join Snowflake customers, partners, and data providers already taking their businesses to new frontiers in the Data Cloud. Snowflake.com.

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Buffett - >>> Snowflake Inc. (SNOW) provides cloud-based data platform in the United States and internationally. The company's platform enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data. Its platform is used by various organizations of various sizes in a range of industries. The company was formerly known as Snowflake Computing, Inc. and changed its name to Snowflake Inc. in April 2019. Snowflake Inc. was founded in 2012 and is headquartered in San Mateo, California.

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OKTA, DOCU, TWLO - >>> 3 Top Cloud Computing Stocks to Buy Right Now

Looking beyond the cloud leaders can be the difference between mediocre and explosive returns.


Motley Fool

by Danny Vena

Nov 5, 2020


https://www.fool.com/investing/2020/11/05/3-top-cloud-computing-stocks-to-buy-right-now/


When the pandemic struck earlier this year, the need for remote access and cloud computing became abundantly clear. This acceleration in adoption of cloud computing wasn't limited to Amazon and its cloud offering, Amazon Web Services (AWS). Businesses that were new to the space quickly found they could rent processing power, as well as accessing software, architecture, platforms, and more from just about anywhere.

With a large and growing list of products and services that are being offered via the cloud, investors have a host of opportunities to prosper from this trend. Let's look at several -- not named Amazon -- that might offer more upside.


DocuSign: Reimagining how agreements are done

The need for social distancing has crimped the ability to sign contracts in person, accelerating the need for consummating agreements from a distance. Given how critical most signed documents are, the importance of using a trusted provider in the space can't be overstated. As the proven leader, with more than 70% of the e-signature market, many turned to DocuSign (NASDAQ:DOCU).

During the second quarter, DocuSign's revenue grew by 45% year over year, accelerating from the 39% gains in the first quarter. The company's subscription revenue accounted for nearly 95% of the total, giving the company a solid base of recurring revenue on which to build. That leverage pushed more money to the bottom line, as adjusted profits climbed a mind-boggling 17-fold.

Other metrics are equally encouraging. Operating cash flow quadrupled, while free cash flow grew by eight times compared to the prior year quarter. Billings -- which includes sales that have been contracted but not yet included in revenue -- grew 61%, illustrating the strength of DocuSign's future business.

Yet even as the company maintains control of the large and growing e-signature market, it's DocuSign's latest venture that should have investors really excited. The company debuted the DocuSign Agreement Cloud early last year, "a suite of products and integrations for digitally transforming how organizations prepare, sign, act on, and manage agreements."

This could just be the beginning, as DocuSign has only begun to capture the opportunity represented by the e-signature market, which it estimates at about $25 billion. With the addition of the Agreement Cloud, DocuSign's total addressable market jumps to $50 billion, according to management. DocuSign generated just $974 million in revenue in 2019, showing the magnitude of the opportunity that remains.


Okta: Moving to the cloud is only half the battle

One of the key challenges of the massive migration to the cloud has been to ensure the identity of those remotely accessing critical systems, thereby preventing unauthorized access. That's where Okta (NASDAQ:OKTA) comes in.

The company is the clear leader in the identity and access management space, attracting waves of new businesses in the transition to remote work. Okta's cloud-based identity management service handles user identification and authentication of employees, contractors, and customers for more than 8,950 organizations around the globe.

Perhaps more importantly, it integrates with more than 6,500 of the most often used business software applications, including Microsoft Office 365, AWS, Salesforce.com, and Slack, among thousands of others. By creating a single, secure login, the company gets remote people to work on all the systems they use quickly and painlessly.

Okta's platform continues to receive industry accolades for its utility and ease of use. The company was named the industry leader in access management for the third consecutive year by research company Gartner, taking the pole position in its much-cited Magic Quadrant. Forrester Research made a similar call, naming Okta the leading identity-as-a-service (IaaS) provider.

Accelerating adoption has been a key component to its impressive financial performance. For the second quarter, Okta's revenue jumped 43% year over year, while subscription revenue grew 44%. At the same time, its remaining performance obligation -- which consists of future revenue that is under contract but has not yet been recognized -- climbed even higher, growing 56%. Okta also generated adjusted net income, up from a loss in the prior-year quarter.

Okta's has only begun to scratch the surface of its immense opportunity. Revenue of $586 million in 2019 pales in comparison to its total addressable market, which management estimates at about $55 billion.


Twilio: The first line of communications for software and apps

The ability to communicate with customers in real time has never been more critical, especially in the app-based economy. From ride-hailing to food delivery, from customer service to password resets -- and everything in between -- hinges on the ability to connect.

While investors may not know Twilio (NYSE:TWLO) by name, there's little doubt most have used its services. The company provides the software building blocks that lets developers embed Twilio's communication technology in their apps, messaging systems, emails, and more. It also streamlines the process so it can be accomplished in a matter of hours, rather than weeks or months.

Still not convinced? The update you received regarding you ride from Lyft, the text messages and reservation confirmation you got from Airbnb, the customer service interactions with Disney's Hulu, and the booking confirmation from your restaurant via Yelp? All powered by Twilio's technology.

In the third quarter, Twilio's revenue climbed 52% year over year, while also delivering a surprise profit, swinging from a loss in the prior-year quarter. At the same time, strong customer adoption not only pushed the topline higher, but also provided a foundation for future growth. The company reported 208,000 active customers, up 24% year over year, while expanding its relationship with existing customers, as evidenced by its dollar-based net expansion rate, which rose to 137%.

That's not all. Twilio's recent acquisition of customer data platform Segment will significantly increase its market opportunity from $62 billion to $79 billion. Considering it generated revenue of just $1.1 billion in 2019, the road for future growth looks long.

You get what you pay for

Eagle-eyed investors will note that these high growth stocks come with an equally high price tag, which is not unusual when dealing with high-risk, high-reward opportunities like these. None of these stocks is cheap -- in fact, quite the opposite. Okta, DocuSign, and Twilio currently trade for 40, 37, and 28 times sales, respectively, when a reasonable price-to-sales ratio is generally considered to be between 1 and 2.

That said, the old adage, "You get what you pay for" comes to mind. Each of these stocks has positively crushed the overall gains of broader market so far this year -- and they show no signs of slowing.

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>>> ServiceNow, Inc. (NOW) provides enterprise cloud computing solutions that defines, structures, consolidates, manages, and automates services for enterprises worldwide. The company offers information technology (IT) service management applications; and digital workflow products for customer service, human resources, security operations, integrated risk management, and other enterprise departments. It operates the Now platform that offers workflow automation, electronic service catalogs and portals, configuration management systems, data benchmarking, performance analytics, encryption, and collaboration and development tools. The company also provides IT service management product suite for enterprise's employees, customers, and partners; IT operations management product that connects a customer's physical and cloud-based IT infrastructure with applications and platforms; IT Asset Management product to automate IT asset lifecycles with workflows; IT business management product suite to manage IT priorities; and enterprise development operations product for developers' toolchain. In addition, it offers customer service management product for customer service cases and requests; human resources service delivery product; security operations product for security operations management requirements of third-party; governance, risk, and compliance product to create policies and controls; and field service management application. Further, the company provides professional, training, and customer support services; and certification programs. It serves government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education, and consumer products. The company sells its products through direct sales team and resale partners. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. The company was founded in 2004 and is headquartered in Santa Clara, California.

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>>> IBM, ServiceNow Deepen Partnership

The two companies will work together to prevent and repair IT-related issues.


Motley Fool

by Will Healy

Oct 15, 2020


https://www.fool.com/investing/2020/10/15/ibm-servicenow-deepen-partnership/


International Business Machines (NYSE:IBM) and ServiceNow (NYSE:NOW) today announced that they will take their partnership to a new level. IBM, which recently announced a spinoff of a legacy business to focus more on the cloud, will utilize its core strengths in the hybrid cloud and match them with ServiceNow's intelligent workflow and operations management competencies.

IBM and ServiceNow formed a partnership about two years ago to bring simplicity to IT across multiple clouds. This new collaboration integrates services on a deeper level.

The combined technologies will determine a baseline for a company's IT operations and allow for deployment in any location. This will enable clients to diagnose problems faster, gain insights, and integrate with the business' toolchain. The alliance will combine the capabilities of IBM's Watson AIOps with ServiceNow's Now platform.

According to IBM CEO Arvind Krishna, every company is becoming an AI company in some respects. "By partnering with ServiceNow and their market-leading Now Platform, clients will be able to use AI to quickly mitigate unforeseen IT incident costs," Krishna said. "Watson AIOps with ServiceNow's Now Platform is a powerful new way for clients to use automation to transform their IT operations."

ServiceNow CEO Bill McDermott added that this digital transformation has become a necessity instead of merely an opportunity. "We are focused on driving a generational step improvement in productivity, innovation, and growth," McDermott said.

Service outages remain a serious problem for companies. They can cost a company hundreds of thousands of dollars per hour, not including reputational damages that are incalculable. To that end, IBM will also supplement this deal by forming an AIOps Elite Team to further their work on preventing outages and ending them quickly if they do occur.

By implementing this solution, IT departments can spend less time on maintenance and instead focus on projects to keep pace with digital demands, according to Dinesh Nirmal, general manager of IBM cloud integration.

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>>> Equinix Unveils Fully Automated and Interconnected Bare Metal Service


Yahoo Finance

October 6, 2020


https://finance.yahoo.com/news/equinix-unveils-fully-automated-interconnected-120100647.html


Equinix Metal™ Empowers Digital Leaders to Deploy Physical Infrastructure at Software Speed

REDWOOD CITY, Calif., Oct. 6, 2020 /PRNewswire/ -- Equinix, Inc. (Nasdaq: EQIX), the world's digital infrastructure company, today announced the availability of Equinix Metal™, a fully automated and interconnected bare metal service. Equinix Metal provides digital businesses with an automated, "as-a-service" deployment method to build their foundational infrastructure and take advantage of the global reach, interconnected ecosystems and trusted partners available on Platform Equinix®. Equinix Metal is available today in Equinix International Business Exchange™ (IBX®) data centers across four global metros (Amsterdam, New York, Silicon Valley and Washington, D.C.), and is expected to be available in 14 global metros by early 2021.


With this new service, companies have the option to deploy the physical infrastructure of their choice at software speed across Equinix's trusted platform. Together with other digital infrastructure building blocks in the Equinix portfolio, customers now have a broad range of physical and virtual deployment alternatives to place infrastructure wherever they need it and connect to everything they need to succeed.

Featuring native integration with Equinix Cloud Exchange Fabric®, which has been renamed Equinix Fabric™, Equinix Metal helps enterprises seamlessly deploy hybrid multicloud architectures and quickly access thousands of networks, enterprises and clouds on Platform Equinix. By delivering high-performance dedicated servers in minutes via popular developer tools in both on-demand and reserved models, Equinix Metal helps businesses extract greater value from Platform Equinix's rich ecosystems more quickly, more easily and in more places than ever before.

Building upon the recent acquisition of Packet—as well as technologies developed at Equinix—the addition of Equinix Metal expands Equinix's ability to help more companies gain digital advantage. By combining Packet's expertise in API-first, hardware automation and provisioning with Equinix's global reach, interconnection prowess and proximity to valuable ecosystems, Equinix Metal offers a powerful infrastructure building block on which digital leaders can deploy and scale their preferred infrastructure with agility and confidence.

Highlights/Key Facts:

With Equinix Metal, digital leaders can gain competitive advantage by building foundational infrastructure to directly and securely connect people, locations, clouds and data that matter most to their business. Key features of Equinix Metal include:

Equinix Metal can address a broad set of use cases that value global reach and participation within digital ecosystems, including:

Quotes:

Raj Dutt, Founder and CEO, Grafana Labs

"Grafana provides its mission-critical observability platform to the largest companies in the world. By deploying Grafana Cloud on Equinix Metal and adding direct, private connectivity through Equinix Fabric, our customers can more easily and securely interact with their metrics, logs and dashboards across on-prem, public or private cloud, or at the edge."

Chris Wright, Senior Vice President and Chief Technology Officer, Red Hat
"Red Hat has championed an industry vision for open hybrid cloud architectures, with a consistent foundation from bare metal to virtualized infrastructures and the cloud, enabling customers to truly build any app anywhere. Collaborating with partners like Equinix to help enable our customers' hybrid cloud success is a key part of that vision, which is why we are pleased to be working with them to deliver Red Hat OpenShift on the Equinix Metal service."

Mark Bowker, Senior Analyst, ESG

"With COVID-19 we've seen enterprises accelerate their digital transformation plans from years to months. Today's digital leaders are increasingly gaining a competitive advantage by leveraging infrastructure choices that meet their exact needs and can be deployed globally and interconnected. By augmenting its portfolio of foundational services with high-performance, fully automated compute, the addition of Equinix Metal can help digital businesses extract greater value from Platform Equinix's rich ecosystems and global interconnection fabric and rapidly deploy the physical infrastructure of their choice."

Sara Baack, Chief Product Officer, Equinix

"Equinix Metal is another important step forward in our product portfolio, enabling enterprises to bring together and interconnect hybrid multicloud infrastructures at global scale on Platform Equinix. With Equinix Metal integrated with Equinix Fabric, infrastructure customers can move at software speed, and tap into the global reach, interconnection value, and unparalleled community of ecosystem partners that digital leaders have come to expect from Equinix."

Additional Resources

Powering Digital Leaders [e-book]

Equinix Metal: Bare Metal and More! [blog]

Equinix Metal [website]

Equinix Completes Acquisition of Bare Metal Leader Packet [press release]

Equinix to Acquire Bare Metal Leader Packet [press release]

About Equinix

Equinix (Nasdaq: EQIX) is the world's digital infrastructure company, enabling digital leaders to harness a trusted platform to bring together and interconnect the foundational infrastructure that powers their success. Equinix enables today's businesses to access all the right places, partners and possibilities they need to accelerate advantage. With Equinix, they can scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value.

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>>> Snowflake IPO: 5 things to know about the Berkshire-backed company after its record software offering


MarketWatch

Sept. 16, 2020

By Jeremy C. Owens


https://www.marketwatch.com/story/snowflake-ipo-five-things-to-know-about-the-berkshire-backed-company-as-it-heads-for-record-software-offering-11600182459


Cloud-database specialist to raise nearly $4 billion even before selling stakes to Salesforce and Warren Buffett’s previously IPO-averse Berkshire Hathaway.

Snowflake Inc. produced the biggest initial public offering for a U.S. software company in history this week, and that may not even be the most astounding feature of its first share sale.

Snowflake SNOW, has convinced one of the world’s most coveted investment partners, Berkshire Hathaway Inc. BRK.A, -0.09% BRK.B, -0.24%, to invest more than half a billion dollars in its IPO, despite founder Warren Buffett’s legendary aversion to young technology companies and IPOs. And Berkshire is not alone, with Salesforce.com Inc. CRM, 0.53% also committing hundreds of millions of dollars to a company that is expected to rake in nearly $4 billion at a valuation of roughly $33 billion just eight years after being established.

Snowflake is generating excitement because the San Mateo, Calif., company offers an essential part of many businesses’ technology infrastructure in a new fashion. Snowflake produces database software that uses the same standard as Oracle Corp. ORCL, 0.85% but can be used in the cloud and scaled up or down as needed, with variable pricing to match. While large U.S. cloud providers like Amazon.com Inc. AMZN, 1.09%, Microsoft Corp. MSFT, 1.44% and Alphabet Inc.’s Google GOOGL, 1.10% GOOG, 1.11% offer similar services, Snowflake is the only standalone company offering such software to run on all of their cloud platforms though.

“There’s not really a pure-play company on the market like Snowflake,” independent technology investment analyst Beth Kindig told MarketWatch.

Snowflake’s singular nature has sent interest in the IPO soaring. After initially proposing a price range of $75 to $85 a share, the company dramatically increased its proposed price to $100 to $110 a share Monday morning, and finally priced shares at $120 apiece Tuesday night. The stock opened at more than double that price in Wednesday’s session.

Snowflake intends to sell at least 28 million shares, in addition to issuing $250 million in stock apiece at the IPO price to Berkshire and Salesforce. Berkshire will also purchase more than 4 million shares at the IPO price from Snowflake’s former chief executive.

Snowflake began trading Wednesday on the New York Stock Exchange under the ticker symbol SNOW. Underwriters, led by Goldman Sachs and Morgan Stanley, will have access to an additional 4.2 million shares.

Here are five things to know about the company as it goes public.

A new kind of database software, with serious competition

Software companies have long sought to break Oracle’s hold on the database market, including MongoDB Inc. MDB, -1.26%, which does not use the standard format of SQL. Snowflake allows customers to use SQL and offers diverse functionality with it, and offers pricing that scales with the workload, unlike legacy on-premises database offerings that required customers to pay for peak usage even when it was not required.

“They’re bringing an Amazon-like approach to data warehousing,” Kindig said.

Snowflake is taking that approach on cloud platforms that offer their own solutions, however. Google’s BigQuery, for instance, also offers a variable pricing structure, and Amazon’s Redshift is considered to be the biggest player around.

“Based on the number of customers per company according to HG Insights, Redshift is about 4x bigger than Snowflake whereas Google’s Big Query is about 2x bigger than Snowflake,” MKM Partners Executive Director Rohit Kulkarni wrote in a pre-IPO note on Snowflake earlier this month.

Google requires users to lock in to their cloud offering for its service, however, which is where Snowflake has a chance to battle its larger competitors. As customers move toward a multi-cloud set-up, in which they can purchase cloud-computing service from more than one of the large providers, Snowflake can be used no matter which cloud product is running.

Big revenue growth and bigger losses

Snowflake’s value proposition to corporate customers has helped it produce triple-digit revenue growth, though losses are also multiplying. Revenue grew nearly 175% in the fiscal year that ended at the end of January, to $264.7 million from $96.7 million. In the first six months of this fiscal year, ending July 31, sales again more than doubled easily, moving to $242 million from $104 million.

Losses did not double in the most recently completed fiscal year, but they came close, moving to $348.5 million from $178 million, with both of those totals eclipsing the company’s revenue from that year. That trajectory eased some in the first six months of this year thanks to a slowdown in operating-expense spending growth, with losses declining to $171 million from $176.9 million in the same period last year.

Kindig, who occasionally writes for MarketWatch, found in her analysis of the company that it had the third highest revenue growth in its sixth year after launching product among IPOs in recent years, behind only Zoom Video Communications Inc. ZM, -6.45% and Crowdstrike Holdings Inc. CRWD, -3.43% and just ahead of Shopify Inc. SHOP, -0.40%

Other metrics could be new standards

While big revenue growth and expanding losses are common for young software companies seeking to add customers to long-term contracts, other performance and valuation metrics show Snowflake’s unique nature. Kindig, in her detailed public analysis, pointed out that Snowflake has the largest net revenue retention rate of any IPO, 158%.

Net revenue retention rate shows how much current customers are spending compared with previous spending, and a number that high shows that customers are increasing their spending on Snowflake’s product at rates not seen before. This trend is showing up in other ways as well: the percentage of customers spending more than $1 million in the past 12 months increased to 41% from 14% in the most recent fiscal year.

Another potentially record-breaking performance by Snowflake may not be as well-received by investors, however. Kindig said that the IPO pricing is pushing Snowflake’s valuation to unseen heights when compared with forward revenue expectations. Kindig tracked it at more than 60x at the new potential pricing range, easily outpacing the highest fliers like Zoom.

“I can’t find a higher forward price to sales,” she said. “It’s off the map.”

The ServiceNow connection

Snowflake was founded by two former Oracle engineers, but its current leaders owe more to a different Silicon Valley software company with a similar ticker symbol to Snowflake.

In 2019, Snowflake shook up the top of its C-suite and welcomed in the former chief executive and chief financial officer from ServiceNow Inc. NOW, -0.06%, CEO Frank Slootman and CFO Michael Scarpelli. The two have worked together through four different companies since 2003, including taking on the CEO and CFO roles at ServiceNow roughly a year before it went public in 2012 at a valuation of about $3 billion. ServiceNow is worth nearly $90 billion and joined the S&P 500 index SPX, 0.61% last year.

Don’t cry for the chief executive who moved out of the way for the ServiceNow team, though. Snowflake accelerated vesting on options for roughly 2 million shares for Robert Muglia in his severance agreement, and he still has a stake of more than 8 million shares. He plans to sell half of them to Berkshire Hathaway at the IPO price, netting him more than $400 million before taxes.

Slootman and Scarpelli will look for a ServiceNow sequel with Snowflake and one of its cofounders, Benoit Dageville, who is still president of products after serving as chief technology officer for most of his time at the company. Snowflake’s other executive officer, Chief Revenue Officer Christopher Degnan, has been with Snowflake since 2013, but previously worked at EMC at the same time Slootman and Scarpelli were there.

The VCs got in early and will have control

While Snowflake’s IPO price range has shot up, the company is no late bloomer. It has been a hot investment for venture-capital firms for years, and raised money at a roughly $12 billion valuation earlier this year. That capital raise was a Series G, enough letters deep into the alphabet to show that plenty of VCs have caught a Snowflake share or two.

The largest VC investors could have effective control over the company if they vote as a bloc, because Snowflake installed a two-tiered share structure that guarantees them 10 votes for every share of Class B stock.

The largest stake belongs to Sutter Hill Ventures, which will hold more than 17% of the class B shares after the offering and has a seat on its board in the person of Michael Speiser, a Sutter Hill managing director who held down Snowflake’s CEO spot for two years before Muglia and serves as lead independent director. The other venture-capital firms with large stakes that include supervoting rights include Altimeter Partners (15.1% after the offering), Iconiq Strategic Partners (14%), Redpoint Ventures (9.1%) and Sequoia Capital (8.6%).

Slootman is the only investor beyond the VC firms with a stake of more than 5% . He is expected to own 6% of the class B stock after the offering.

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>>> AppFolio, Inc. (APPY) provides industry-specific cloud-based business software solutions, services, and data analytics for the real estate and legal markets. The company offers AppFolio Property Manager, a cloud-based software solution for the real estate market that provides property managers of various sizes and tools and services designed to streamline their property management businesses; and AppFolio Investment Management, a cloud-based software solution for real estate investment managers of various sizes tools and services designed to streamline their real estate investment management businesses. It also provides MyCase, a legal practice and case management solution that provides managing calendars, contacts and documents, time tracking, billing and collections, and communicating with clients and sharing sensitive and privileged materials. In addition, the company offers Value+ services, such as Website design, electronic payment, tenant screening, insurance, contact center, premium leads, tenant debt collections, and utility management services. AppFolio, Inc. was founded in 2006 and is headquartered in Santa Barbara, California.

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Okta Inc - >>> Remote-Work Boom Mints Another Internet Billionaire


Bloomberg

By Nico Grant

August 28, 2020


https://www.bloomberg.com/news/articles/2020-08-28/okta-s-bodybuilder-ceo-becomes-billionaire-on-remote-work-boom?srnd=premium


Businesses, schools tap firm’s tools to secure online access

McKinnon stays cautious on outlook as investors seek growth


The coronavirus pandemic, for all its human and economic tragedy, has spurred a once-in-a-generation opportunity for the technology industry, seized most visibly by the sector’s giants such as Apple Inc., Amazon.com Inc. and Microsoft Corp., and productivity players like Zoom Video Communications Inc. and Slack Technologies Inc.

A lesser-known beneficiary is Okta Inc., a decade-old cloud computing company based in San Francisco. Its software gives corporate customers a kind of border control for the internet, helping them authenticate the identity of their employees and customers as they connect remotely to a sprawling system of online applications.

The Covid-19 outbreak, which has cast most workers out from behind their corporate firewalls and into their home offices, has helped to further popularize Okta’s software. It allows companies to seamlessly manage their employees’ use of the internet and to protect the corporate data on their devices.

The stock has more than doubled since March, when lockdowns began, and has surged more than 10-fold since its initial public offering in 2017. The software maker has become an integral part of our new daily life, with its technology used by organizations as varied as Major League Baseball, Adobe Inc., FedEx Corp. and Seton Hall University. The boom has some investors betting that Okta and similar companies will accelerate their revenue through the crisis, even as it raises questions for executives about their good fortune at a time of suffering and massive job losses in the nation at large.

“It can be mentally and psychologically confusing for me to both read the news and then see customers asking for our service,” said Frederic Kerrest, Okta’s co-founder and chief operating officer. “Because the world is not in a good place, but, you know, we seem to be able to provide some solutions that people really need, which is great.”

From March through July, Okta’s main product, called Identity Cloud, was used almost 16 billion times to access an app or website. The multi-factor authentication service saw usage nearly triple in the period compared with a year earlier, and it hit a single-day peak of 145 million unique logins, the company said.

Quick Climb

Okta has more than doubled sales in two and a half years

Wall Street has bought into the story. The stock has soared 106% since March 12 when U.S. President Donald Trump imposed travel restrictions on Europeans. Now Okta must live up to the lofty expectations that come with a company valued at $27 billion. The shares slipped late Thursday after quarterly results reminded Wall Street that the company may not be able to accelerate sales growth forever.

“We’re still being prudent about the rest of the year and the macroeconomic consequences ahead of us,” Chief Executive Officer Todd McKinnon said in an interview. “Headwinds to the business will be a little stronger in the second half.”

The company has also lost money for most of its existence. However, investors are often willing to look far into the future when assessing cloud-based subscription businesses such as Okta. These companies spend heavily on sales and marketing to win as many customers as quickly as possible. Once the user base is large enough, distributing extra versions of the software online costs very little, and a highly profitable business can emerge -- one example being Salesforce.com Inc.

Okta must lure as many paying customers as it can during this rare work-from-home boom, and then keep hold of them as the world slowly returns to some semblance of normalcy. Its work with FedEx suggests that this is possible.

The logistics giant first partnered with Okta about a year ago, and now has more than 85,000 workers using the software maker’s service to access the FedEx virtual private network. Warehouse employees were given additional iPads to access apps with Okta, so they didn’t have to share devices and could maintain social-distancing rules, said Gene Sun, FedEx’s chief information security officer. Many of the company’s customer-service workers have Okta on their phones for the first time in order to securely pull up customer information while working remotely.

Sun said the company greatly reduced its legacy sign-on system the week of March 16 in favor of Okta.

“Okta really has enabled us to prepare the workforce to work from home in the March timeframe in a really smooth manner,” he said. “The thing about the backdrop of this pandemic is we have come to a conclusion that we should try to be moving aggressively toward using cloud services providers,” whose subscription payment plans help FedEx manage user prices.

Like companies with workers at home, educational institutions have needed to figure out how to teach pupils remotely. Seton Hall University, a private Catholic school in South Orange, New Jersey, had a leg up because students and faculty had been using Okta since 2013. The college went from offering a few hundred online courses in the spring semester to providing more than 2,000 virtual classes in a few days, through Blackboard, which students access via Okta. The university also has an online portal named for its mascot, PirateNet, that is the information hub for its community, used for everything from paying tuition bills to registering for classes.

“Really behind the scenes PirateNet is hundreds of apps inside Okta,” said Paul Fisher, an associate chief information officer of Seton Hall.

When the coronavirus began to spread in March, Okta was among the first U.S. companies to publicly grapple with how to work around the pandemic. The company was scheduled to host a splashy San Francisco conference for customers, partners and analysts -- a software-industry ritual to strengthen future sales and telegraph the company’s strategic direction.

McKinnon, the CEO, had to decide whether to cancel the event, delay until some unknown date or take it online. He opted for a remote conference, appearing from his home, and filmed a sketch in which he said his family promised not to interrupt him. His son walked into the frame anyway.

The playful tone was a professional departure for McKinnon, a 6-foot-2-inch tall bodybuilder and a former CrossFit athlete. Pat Grady, a venture capitalist at Sequoia who invested in Okta and remains on its board, said that in an industry full of CEOs who use lofty language to explain how their apps are changing the world, McKinnon presents his company’s mission in a just-the-facts way that has gained him credibility, and a little criticism.

Okta’s successful navigation of the pandemic has paid off for its co-founder. During these last five months, McKinnon, 48, has become a billionaire on paper. Bloomberg estimates his net worth has climbed to about $1.7 billion from about $900 million at the start of the year. Through a spokesman, McKinnon declined to verify his net worth.

In 2016, McKinnon said Okta would give 1% of its equity to nonprofit organizations in its community. In the aftermath of the May killing of George Floyd, McKinnon and Kerrest pledged more than $1 million each for racial justice issues and said they will match employee contributions to civil-rights organizations. McKinnon and his wife also said they would provide $500,000 for Covid-19 relief efforts.

Despite persistent rumors Okta may sell itself to a larger tech company, McKinnon’s long-term plan is to grow the business he co-founded into one of the world’s largest software makers. He says big challenges motivate him to work harder. Years from now, after the Covid-19 virus has been defeated, he expects his slice of the software market will only grow more essential.

“We’re technology believers,” McKinnon said. “We think it’s not perfect. We think that there’s a lot of work we can do to make it better, easier to use more secure, more helpful for users. But that’s what’s exciting about we’re trying to do. It’s an almost boundless thing.”

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[Satterep]

Thanks again for the info

[Satterep]

Special thanks to the author for this post, the topic is perfectly covered. But all the same, I want to add a few words on my own, since I also understand a little about this and work in this area as a financial consultant at Finmodelslab. SaaS is primarily a software development business model. If you need a business plan but have no idea how to write one, then such software hosts on the vendor's server are fully accessible through a web browser and customers purchase it by subscription. I will share a link to https://finmodelslab.com/templates/financial-models/software-as-a-service-business/, which continues to gain traction in every corner of the business world. Due to the low cost of integration and technical support, this model is an ideal software as a service business financial model. I hope that my information became useful to you and I was able to supplement the author.

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>>> Cloud Computing ETF (CLOU) Hits New 52-Week High


Zacks

by Sweta Killa

June 1, 2020


https://finance.yahoo.com/news/cloud-computing-etf-clou-hits-134001763.html


Cloud Computing ETF (CLOU) Hits New 52-Week High
For investors seeking momentum, Global X Cloud Computing ETF CLOU is probably on radar. The fund just hit a 52-week high and is up 61.4% from its 52-week low price of $12.36/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

CLOU in Focus

This fund seeks to invest in companies positioned to benefit from the increased adoption of cloud computing technology, including companies whose principal business is in offering computing Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS), managed server storage space and data center real estate investment trusts, and cloud and edge computing infrastructure and hardware. CLOU charges 68 bps in annual fees (see: all the Technology ETFs here).

Why the Move?

The cloud computing corner of the broad stock market has been an area to watch lately, given rising demand. The area is growing exponentially buoyed by stay-at-home orders that have boosted demand for work and entertainment from home. Even if the economy reopens, the trend is likely to continue given the change in consumer behavior. Cloud computing has encouraged video conferencing, gaming, e-commerce, remote project collaboration, online classes and other programs.

More Gains Ahead?

It seems that CLOU might remain strong given a high weighted alpha of 36.2 but could be a risky choice as depicted by 20-day volatility of 30.6%. As a result, there is definitely still some promise for risk-aggressive investors who want to ride on this surging ETF.

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>>> Best ETFs of 2020: The Global X Cloud Computing Fund Should Be a Winner


InvestorPlace

by Dana Blankenhorn

March 27, 2020


https://finance.yahoo.com/news/best-etfs-2020-global-x-150442702.html


Dana Blankenhorn’s choice for the contest is the Global X Cloud Computing Fund (NASDAQ:CLOU).

Since the start of 2020, the Global X Cloud Computing Fund (NASDAQ:CLOU) is down by 9%. In a market infected with fear thanks to the coronavirus from China, that counts as a win.

CLOU had been outperforming the S&P 500 during January and February. The divergence has sharpened since things got serious on Feb. 19. Since then, CLOU is down 18%, but the S&P is down 27%.

Is This Still One of the Best ETFs to Consider?

CLOU is designed to track the INDXX USA Cloud Computing Index. This index encompasses companies that are actively involved in the cloud computing industry. Most are applications sold as services.

The largest holding of CLOU is Shopify (NYSE:SHOP), an e-commerce application that was one of the market’s best performers in 2018 and 2019. Over the last three years it rose from less than $70 per share to a recent high of almost $600 before falling back to its present level of $415.

Other big application providers in the index are Netflix (NASDAQ:NFLX), Salesforce (NYSE:CRM) and Twilio (NYSE:TWLO), the latter of which embeds voice, video and text into other applications.

Many CLOU components provide services for other cloud companies. An example is Zscaler (NASDAQ:ZS), a cloud security company whose shares are up 23% so far in 2020. Zscaler has been warning about risks in the “shadow IoT” world, the laptops and phones used by workers at home.

Not everything CLOU touches has turned to gold. Among the losers so far are Paycom Software (NYSE:PAYC), which provides cloud-based human resources applications. Paycom has been hit hard as companies have moved to lay off workers, and the shares are down 20% so far in 2020.

Beyond Applications

CLOU doesn’t just feature cloud application providers.

Akamai Technologies (NASDAQ:AKAM), originally created as a Content Delivery Network in 1998, now offers a host of security and connectivity solutions for carriers. Its software works inside the network, invisible to most users. Its customers include service providers as well as enterprises. Akamai shares are up nearly 3% so far this year.

Another big holding is Digital Realty Trust (NYSE:DLR), a real estate investment trust (REIT) that owns data centers. These are the buildings, filled with computers and networking gear, through which enterprises connect with the cloud and clouds connect to each other. REITs are organized to build with debt and pay income back to shareholders. DLR’s dividend of $4.48 per share last year yielded 3.34%. Since the start of the year, DLR shares are up 13%.

Proofpoint (NASDAQ:PFPT) focuses on protecting e-mail, both the messages themselves and the mailboxes they rest in. This has become the most expensive problem in all of cybercrime, the company says. Since the start of 2020, however, Proofpoint shares are down by 14%, because it has been delaying profits in favor of growth. That’s an approach that is in bad taste right now.

The Bottom Line on CLOU

I had no idea a global pandemic was around the corner when I chose to recommend CLOU late last year.

I was just looking to win the contest. It seemed to me that remote work, and cloud applications, were fated to grow fast. Most CLOU holdings are growth companies, not dividend payers, and that aggressive approach will usually win.

As I wrote at the time, “To win a contest you must be bold.” Even by the end of 2019, the transition to the cloud was only 20% complete, according to International Business Machines (NYSE:IBM).

That puts cloud applications at the center of their growth curve. Such companies have ample pricing power, limited competition and innovative solutions to offer. The way to growth is always on the leading edge.

So, it seems, is the way to safety in a panic.

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>>> Record Spending in Cloud Computing Broke Records in 2019


ETF Trends

February 19, 2020


https://finance.yahoo.com/news/record-spending-cloud-computing-broke-163210127.html


The cloud computing arms race isn’t relegated to the tech giants like Google and Amazon. Organizations around the world are opening up their wallets and spending more on cloud computing technology to fortify their core businesses, resulting in record spending in 2019.

A Techradar report noted that organizations all around the world “spent a record $107bn on cloud computing infrastructure services last year according to a new report from Canalys.

Spending on cloud computing infrastructure services was up by 37 percent compared to the previous year and a third of this year's spending went to Amazon's cloud computing division, AWS.”

"Organizations across all industries, from financial services to healthcare, are transitioning to being technology providers,” said Alastair Edwards, chief analyst at Canalys. “Many are using a combination of multi-clouds and hybrid IT models, recognizing the strengths of each cloud service provider and the different compute operating environments needed for specific types of workloads."

This spending is expected to increase as more companies integrate cloud computing into their existing infrastructures. According to market analysts as Canalys, this type of spending will sustain itself over the next five years with estimates that total spending on cloud infrastructure services could hit $284bn in 2024.

Cloud computing

The impact of cloud computing can be felt as more companies are utilizing the technology at a rapid pace to power their core businesses. That’s why Global X ETFs, the New York-based provider of exchange-traded funds, recently launched the Global X Cloud Computing ETF (CLOU) .

Seeking to track the Indxx Global Cloud Computing Index, the fund holds a basket of companies that potentially stand to benefit from continuing proliferation of cloud computing technology and services. The cloud computing industry refers to companies that (i) license and deliver software over the internet on a subscription basis (SaaS), (ii) provide a platform for creating software applications which are delivered over the internet (PaaS), (iii) provide virtualized computing infrastructure over the internet (IaaS), (iv) own and manage facilities customers use to store data and servers, including data center Real Estate Investment Trusts (REITs), and/or (v) manufacture or distribute infrastructure and/or hardware components used in cloud and edge computing activities.

The increasingly digital and connected world that form the backdrop for CLOU’s launch is exhibiting significant growth, and is expected to continue to grow over the coming years. The cloud computing industry that was estimated to be worth $188 billion in 2018 is expected to be worth over $300 billion by 2022, a nearly 15% annualized growth rate.

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>>> Qualys, Inc. (QLYS) provides cloud-based platform that delivers information technology (IT), security, and compliance solutions in the United States and internationally. The company offers Qualys Cloud Apps, which includes Asset Inventory, CMDB Sync, Vulnerability Management, Continuous Monitoring, Patch Management, Threat Protection, Security Configuration Assessment, Indication of Compromise, Policy Compliance, PCI Compliance, Security Assessment Questionnaire, File Integrity Monitoring, Web Application Scanning, and Web Application Firewall, as well as Cloud Inventory, Cloud Security Assessment, and Container Security. Its integrated suite of security and compliance solutions delivered on its Qualys Cloud Platform enables customers to identify IT assets, collect and analyze IT security data, discover and prioritize vulnerabilities, recommend and implement remediation actions, and verify the implementation of such actions. The company also provides core services, including asset tagging and management, reporting and dashboards, questionnaires and collaboration, remediation and workflow, big data correlation and analytics engine, and alerts and notifications, which enable integrated workflows, management and real-time analysis, and reporting across IT, security, and compliance solutions. The company markets and sells its IT, security, and compliance solutions to customers directly through its sales teams, as well as indirectly through its network of channel partners, such as security consulting organizations, managed service providers and resellers, and consulting firms. It serves enterprises, government entities, and small and medium-sized businesses in various industries, including education, financial services, government, healthcare, insurance, manufacturing, media, retail, technology, and utilities. The company was founded in 1999 and is headquartered in Foster City, California.

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>>> Best ETFs of 2020: The Global X Cloud Computing Fund Should Be a Winner


InvestorPlace

by Dana Blankenhorn

March 27, 2020


https://finance.yahoo.com/news/best-etfs-2020-global-x-150442702.html


Dana Blankenhorn’s choice for the contest is the Global X Cloud Computing Fund (NASDAQ:CLOU).


Since the start of 2020, the Global X Cloud Computing Fund (NASDAQ:CLOU) is down by 9%.

In a market infected with fear thanks to the coronavirus from China, that counts as a win.

CLOU had been outperforming the S&P 500 during January and February. The divergence has sharpened since things got serious on Feb. 19. Since then, CLOU is down 18%, but the S&P is down 27%.

Is This Still One of the Best ETFs to Consider?

CLOU is designed to track the INDXX USA Cloud Computing Index. This index encompasses companies that are actively involved in the cloud computing industry. Most are applications sold as services.

The largest holding of CLOU is Shopify (NYSE:SHOP), an e-commerce application that was one of the market’s best performers in 2018 and 2019. Over the last three years it rose from less than $70 per share to a recent high of almost $600 before falling back to its present level of $415.

Other big application providers in the index are Netflix (NASDAQ:NFLX), Salesforce (NYSE:CRM) and Twilio (NYSE:TWLO), the latter of which embeds voice, video and text into other applications.

Many CLOU components provide services for other cloud companies. An example is Zscaler (NASDAQ:ZS), a cloud security company whose shares are up 23% so far in 2020. Zscaler has been warning about risks in the “shadow IoT” world, the laptops and phones used by workers at home.

Not everything CLOU touches has turned to gold. Among the losers so far are Paycom Software (NYSE:PAYC), which provides cloud-based human resources applications. Paycom has been hit hard as companies have moved to lay off workers, and the shares are down 20% so far in 2020.

Beyond Applications

CLOU doesn’t just feature cloud application providers.

Akamai Technologies (NASDAQ:AKAM), originally created as a Content Delivery Network in 1998, now offers a host of security and connectivity solutions for carriers. Its software works inside the network, invisible to most users. Its customers include service providers as well as enterprises. Akamai shares are up nearly 3% so far this year.

Another big holding is Digital Realty Trust (NYSE:DLR), a real estate investment trust (REIT) that owns data centers. These are the buildings, filled with computers and networking gear, through which enterprises connect with the cloud and clouds connect to each other. REITs are organized to build with debt and pay income back to shareholders. DLR’s dividend of $4.48 per share last year yielded 3.34%. Since the start of the year, DLR shares are up 13%.

Proofpoint (NASDAQ:PFPT) focuses on protecting e-mail, both the messages themselves and the mailboxes they rest in. This has become the most expensive problem in all of cybercrime, the company says. Since the start of 2020, however, Proofpoint shares are down by 14%, because it has been delaying profits in favor of growth. That’s an approach that is in bad taste right now.

The Bottom Line on CLOU

I had no idea a global pandemic was around the corner when I chose to recommend CLOU late last year.

I was just looking to win the contest. It seemed to me that remote work, and cloud applications, were fated to grow fast. Most CLOU holdings are growth companies, not dividend payers, and that aggressive approach will usually win.

As I wrote at the time, “To win a contest you must be bold.” Even by the end of 2019, the transition to the cloud was only 20% complete, according to International Business Machines (NYSE:IBM).

That puts cloud applications at the center of their growth curve. Such companies have ample pricing power, limited competition and innovative solutions to offer. The way to growth is always on the leading edge.

So, it seems, is the way to safety in a panic.

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>>> Shopify Inc. (SHOP), a commerce company, provides a cloud-based multi-channel commerce platform for small and medium-sized businesses in Canada, the United States, the United Kingdom, Australia, and internationally. Its platform provides merchants with a single view of business and customers in various sales channels, including Web and mobile storefronts, physical retail locations, social media storefronts, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders, build customer relationships, source products, leverage analytics and reporting, and access financing. The company was formerly known as Jaded Pixel Technologies Inc. and changed its name to Shopify Inc. in November 2011. Shopify Inc. was founded in 2004 and is headquartered in Ottawa, Canada. <<<

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>>> 3 Soaring Cloud Computing ETFs


Benzinga

May 11, 2020


https://finance.yahoo.com/news/3-soaring-cloud-computing-etfs-221015316.html


The technology sector is proving to be a premier source of strength this year. Just look at the tech-heavy Nasdaq-100 Index (NDX), which was the first of the major domestic equity benchmarks to return to positive territory following the March market swoon.

Within the broader technology universe, several sub-groups are standing out, including cloud computing. For example, the ISE CTA Cloud Computing Index entered Monday with a year-to-date gain of 9.54%.

For awhile, the universe of dedicated cloud computing exchange traded funds was sparsely populated, but that's changed over the past couple of years and some of the new additions to the group are performing well this year. Consider some of the following ideas.

Global X Cloud Computing ETF (CLOU)

The Global X Cloud Computing ETF (NASDAQ: CLOU) remains one of the success stories of the thematic ETF realm. At just about 13 months old, the Global X ETF has nearly $597 million in assets under management, indicating there's room for competition and innovation in the cloud ETF space.

CLOU follows the Indxx Global Cloud Computing Index and is a play on “companies positioned to benefit from the increased adoption of cloud computing technology, including companies whose principal business is in offering computing Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS), managed server storage space and data center real estate investment trusts, and/or cloud and edge computing infrastructure and hardware,” according to Global X.

Recently on a string of hitting all-time highs, including Monday, CLOU is up an impressive 18.82% year to date.


WisdomTree Cloud Computing Fund (WCLD)

The WisdomTree Cloud Computing Fund (NASDAQ: WCLD) is another emerging success story in the cloud ETF arena with nearly $80 million in assets under management after coming to market just last September. WCLD follows the BVP Nasdaq Emerging Cloud Index, which is an equal-weight benchmark.

“Cloud computing has become ingrained in nearly every aspect of our lives by fundamentally altering how we consume, process and share information in the digital age,” according to WisdomTree. “Through our research, WisdomTree believes this trend toward cloud-based solutions offers a compelling, long-term opportunity for investors to gain exposure to one of the most exciting segments of the technology sector.”

Although WCLD is an equal-weight ETF, it's benefiting from high-flying Zoom Video (NASDAQ: ZM) being its top component. That's helping WCLD to a 2020 gain of 24%. The WisdomTree ETF also hit an all-time high on Monday.


First Trust Cloud Computing ETF (SKYY)

The First Trust Cloud Computing ETF (NASDAQ: SKYY) is the fund that got the cloud ETF party started nearly nine years ago and while it's a behemoth compared to its aforementioned rivals with $3.2 billion in assets, it's not necessarily the best fund in this category.

SKYY is a fine idea for investors looking to lean toward the largest cloud companies. Think Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT), among others. Undoubtedly, that helps, but SKYY's performance is restrained by the mega-cap holdings as it's up just 9.5% this year. Of course, that's better than the broader market.

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>>> ServiceNow, Inc. (NOW) provides enterprise cloud computing solutions that defines, structures, consolidates, manages, and automates services for enterprises worldwide. The company offers information technology (IT) service management applications; and digital workflow products for customer service, human resources, security operations, integrated risk management, and other enterprise departments. It operates the Now platform that offers workflow automation, electronic service catalogs and portals, configuration management systems, data benchmarking, performance analytics, encryption, and collaboration and development tools. The company also provides IT service management product suite for enterprise's employees, customers, and partners; IT operations management product that connects a customer's physical and cloud-based IT infrastructure with applications and platforms; IT Asset Management product to automate IT asset lifecycles with workflows; IT business management product suite to manage IT priorities; and enterprise development operations product for developers' toolchain. In addition, it offers customer service management product for customer service cases and requests; human resources service delivery product; security operations product for security operations management requirements of third-party; governance, risk, and compliance product to create policies and controls; and field service management application. Further, the company provides professional, training, and customer support services; and certification programs. It serves government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education, and consumer products. The company sells its products through direct sales team and resale partners. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. The company was founded in 2004 and is headquartered in Santa Clara, California.

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>>> 10 Popular Software as a Service (SaaS) Examples



by Vadim Vladimirskiy

Founder & CEO, Nerdio

October 20, 2016


https://getnerdio.com/academy/10-popular-software-service-examples/


The Software as a Service (SaaS) model continues to gain traction across all corners of the business world, and for good reason. Also known as on-demand software, hosted software or web-based software, SaaS eschews traditional software installation, maintenance and management approaches in favor of delivering cloud-based applications via the internet. With SaaS, service provider partners shoulder the burdens of security, availability and performance.

Organizations of all shapes and sizes are embracing the SaaS philosophy as an alternative to on-premises hardware and software deployment. IT management metrics provider Computer Economics reports that 60 percent of all companies now have integrated at least some SaaS solutions into their business, with 36 percent intending to increase their investment in the months ahead.

But is SaaS a sound idea for your company? Here’s what you need to know.

The pros and cons of Software as a Service

SaaS is a natural fit for businesses intent on slashing IT responsibilities and costs. On average, firms that transition to Software as a Service subscriptions from capital-heavy, on-premise infrastructure installation, maintenance and upgrades enjoy an IT spending reduction of more than 15 percent, according to data collected by Computer World.

SaaS is particularly well suited for small businesses. Instead of investing in additional in-house server capacity and software licenses, companies simply can adjust their Software as a Service subscription on a monthly basis, scaling consumption requirements up and down based on project demands and other variables. There’s also an increase in human bandwidth: In-house IT staffers are liberated from the tasks associated with on-premise hardware and software, allowing them to tackle projects more vital to the company’s future growth. And because the IT infrastructure resides in the service provider’s data center, your organization can get back up and running immediately in the event of a service outage or more dramatic disruption.

Nothing is perfect, of course, and SaaS is no exception. Companies that adopt multiple Software as a Service applications or plan to connect hosted software with existing on-premise apps may encounter software integration headaches along the way. Security is another common concern for businesses mulling SaaS options: Whenever sensitive company data and business processes are entrusted to a third-party service provider, issues such as identity and access management must be addressed. Businesses must also take into account the government compliance regulations inherent to storing customer data in a remote data center.

Essential SaaS apps every company should know

Still on the fence about SaaS? Perhaps a deeper understanding of some of the most innovative and popular SaaS applications can help you make up your mind.

1. Salesforce.com

Arguably the quintessential Software as a Service application, Salesforce remains at the vanguard of the cloud computing revolution it helped create. The customer relations management solution enables businesses to collect all information on customers, prospects and leads within a single online platform, enabling authorized employees to access critical data on any connected device at any time. Salesforce credits its tools for boosting customer sales an average of 37 percent as well as driving increased client loyalty and satisfaction.

2. Microsoft Office 365

Signature Microsoft productivity applications such as Word, Excel and PowerPoint are longtime staples of the workplace, but the cloud-based Microsoft Office 365 dramatically expands the Office suite’s parameters. Users now may create, edit and share content from any PC, Mac, iOS, Android or Windows device in real-time, connect with colleagues and customers across a range of tools from email to video conferencing and leverage a range of collaborative technologies supporting secure interactions both inside and outside of the organization.

3. Box

This online workspace enables professionals to collaborate with anyone, anywhere. Users can securely share large files via traditional link or custom URL, safeguarding data and documents via permissions and password protection. Box supports more than 120 file types, and users may preview content prior to downloading. All content sharing, editing, discussion and approval is confined to one centralized file, and users receive real-time notifications when edits are made. Box also automates tasks such as employee onboarding and contract approvals, reducing repetition and abbreviating review cycles.

4. Google Apps

Google long ago expanded beyond its search and advertising roots to offer businesses a comprehensive suite of productivity tools. Google Apps includes custom professional email (complete with spam protection), shared calendars and video meetings alongside Google Drive. A cloud-based document storage solution, Google Drive enables staffers to access files from any device and share them instantly with colleagues, in the process eliminating email attachments as well as the hassles of merging different versions.

5. Amazon Web Services

Amazon, too, has evolved beyond its core e-commerce platform to support the on-demand delivery of cloud-based IT resources and applications, bolstered by pay-as-you-go pricing options. Amazon Web Services currently encompasses more than 70 services in all, including computing, storage, networking, database, analytics, deployment, management and tools for the Internet of Things.

6. Concur

Business travel can pose headaches for on-the-go employees and finance departments alike. Concur streamlines the process by automating travel and expense management. Its web-based and mobile solutions enable staffers to book travel plans according to their own needs and preferences, while also making sure all bookings fall within company spending limits. Concur additionally reconciles expenses after travel is completed and delivers electronic airline, hotel and auto rental receipts directly into digital expense reports. This negates the need to collect, track and submit paper receipts.

7. Zendesk

This cloud-based customer service and support ticketing platform enables representatives to more efficiently tackle inbound client requests across any communications channel — email, web, social media, phone or chat. Features include Automatic Answers (a machine learning-powered tool for interpreting and solving customer questions and requests), Zopim (a real-time chat service) and Zendesk Voice (a cloud-based, built-in phone support solution). According to Zendesk, its business users experience positive ratings for more than 86 percent of their customer interactions.

8. DocuSign

Electronic signature technology and transaction management services platform DocuSign supports the exchange of digital contracts and other e-signed documents. Users may access, sign and send business documents from their office, their hotel room or anywhere else their job leads, guaranteeing approvals and agreements are executed in a matter of minutes, not days. DocuSign e-signatures are legally binding for most business and personal transactions in virtually every nation across the globe. The app supports more than 85 million users in 188

9. Dropbox

Keep your documents and files at your fingertips across all your devices using Dropbox. Anything added to Dropbox storage automatically shows up across all your desktop and mobile devices, enabling professionals to begin a project on their work PC, make edits on their smartphone during the evening commute home, and add the finishing touches from their home tablet. Then users can invite teammates to access any Dropbox folder or send them specific files and images accessible through password-protected links; there’s even a remote wipe option in case of emergency.

10. Slack

A real-time messaging, archiving and search solution, Slack is redefining business communication. Users may organize team conversations in open channels dedicated to specific topics or projects or limit more sensitive interactions to private, invite-only participants. Colleagues also may interact one-on-one using private, secure direct messages. Slack also enables users to share files, documents, spreadsheets and PDFs, complete with options for adding comments and highlighting for future reference; moreover, all messages, notifications and files are automatically indexed and archived.

Even if none of those Software as a Service solutions float your boat, chances are there’s an app that can transform how your organization does business. “When deployed correctly, SaaS promises decreased infrastructure, speed of implementation and comparable customer experience. It also can save on upfront costs,” said David Wagner, Computer Economics’ vice president of research. “It is no surprise that companies are making the switch.” You owe it to your business to consider joining their ranks.

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>>> SaaS - Software as a service


From Wikipedia


https://en.wikipedia.org/wiki/Software_as_a_service


Software as a service (SaaS /sæs/[1]) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. It is sometimes referred to as "on-demand software", and was formerly referred to as "software plus services" by Microsoft.[2]

SaaS applications are also known as Web-based software, on-demand software and hosted software.[3] The term "software as a service" (SaaS) is considered to be part of the nomenclature of cloud computing, along with infrastructure as a service (IaaS), platform as a service (PaaS), desktop as a service (DaaS),[4] managed software as a service (MSaaS), mobile backend as a service (MBaaS), datacenter as a service (DCaaS), and information technology management as a service (ITMaaS).

SaaS apps are typically accessed by users using a thin client, e.g. via a web browser. SaaS has become a common delivery model for many business applications, including office software, messaging software, payroll processing software, DBMS software, management software, CAD software, development software, gamification, virtualization,[5] accounting, collaboration, customer relationship management (CRM), management information systems (MIS), enterprise resource planning (ERP), invoicing, human resource management (HRM), talent acquisition, learning management systems, content management (CM), geographic information systems (GIS), and service desk management.[6] SaaS has been incorporated into the strategy of nearly all leading enterprise software companies.[7][8]

According to a Gartner estimate, SaaS sales in 2018 were expected to grow 23% to $72 billion.[9]

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>>> DocuSign, Inc. (DOCU) provides cloud based software in the United States. The company offers e-signature solution that enables businesses to digitally prepare, execute, and act on agreements. The company sells its products through direct, partner-assisted, and Web-based sales. It serves enterprise businesses, commercial businesses, and small businesses, such as professionals, sole proprietorships and individuals. The company was 2003 and is headquartered in San Francisco, California.

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>>> Cloud companies appear to be silver lining as coronavirus dampens IT spending


MarketWatch

April 2, 2020

By Wallace Witkowski


https://www.marketwatch.com/story/cloud-companies-appear-to-be-silver-lining-as-coronavirus-dampens-it-spending-2020-04-02?siteid=bigcharts&dist=bigcharts


Instinet analysts see cloud migration acceleration because of pandemic


COVID-19 is already beginning to weigh on corporate IT security budgets, but as millions work from home, one survey is finding a spending shift to cloud providers and security and away from PCs and servers.

Of 50 chief information officers surveyed, 23, or 46%, expect the pandemic to drive a decline in IT spending for the year even though the official outlook remains at 5% growth for the year, according to brokerage firm Instinet. On the other hand, 20% expect to increase their spending.

“Our semiannual mid-March CIO survey is one of our first tangible data points that the coronavirus crisis is weighing on budgets,” Instinet analysts wrote in a Thursday report.

Instinet said that 40 of the 50 survey responses came after March 11 “before full lockdowns hit, though well after social distancing commenced.”

Of the CIOs surveyed, 68% expect to cut funding for PCs, while 48% expect to lower funding for AI, and 48% expect to lower funding for servers in a downturn. On the flip side, 86% said that security was now a higher budget priority and 68% said cloud services would become more of a priority.

“The data suggests a pivot to cloud, and perhaps, more public cloud,” Instinet said. “CIOs expect to reduce their mix of on-prem workloads from 59% in 2019 to 35% in 2021.”

“We have theorized the crisis could accelerate the cloud migration,” Instinet said. “We expect firms with public cloud exposure will emerge stronger from the crisis.”

Instinet said that preferred cloud providers remain Microsoft Corp.’s US:MSFT Azure and Amazon.com Inc.’s US:AMZN AWS as opposed to cloud services offered by Oracle Corp. US:ORCL, Alphabet Inc.’s US:GOOG US:GOOGL Google, and International Business Machines Corp. US:IBM

When it comes to chip makers, the balance of sales is divided between PCs and on-premise servers as opposed to sales to data centers that power cloud services. As far as chip companies go, Instinet said that while PC and server spending is an offset to both Intel Corp. US:INTC and Advanced Micro Devices Inc. US:AMD, a decline in AI spending poses a risk to Nvidia Corp. US:NVDA

Companies that are more exposed to private cloud and on-premise spending — namely, Cisco Systems Inc. US:CSCO, Hewlett Packard Enterprise Co. US:HPE, and Dell Technologies Inc. US:DELL — are more likely to lag, Instinet said.

For the year, the PHLX Semiconductor Index US:SOX is down 20%, the First Trust Cloud Computing ETF US:SKYY is down 13%, and the iShares Expanded Tech-Software Sector ETF US:IGV is down 13%. In comparison, the S&P 500 index US:SPX is down 22%, and the tech-heavy Nasdaq Composite Index US:COMP is off 17%.

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>>> Amazon Web Services


https://en.wikipedia.org/wiki/Amazon_Web_Services


Amazon Web Services, Inc.
Industry Web service, cloud computing
Revenue Increase $25.6 billion (2018)[2]
Operating income Increase $7.2 billion (2018)[2]
Parent Amazon
Subsidiaries Annapurna Labs


Amazon Web Services (AWS) is a subsidiary of Amazon that provides on-demand cloud computing platforms and APIs to individuals, companies, and governments, on a metered pay-as-you-go basis. In aggregate, these cloud computing web services provide a set of primitive abstract technical infrastructure and distributed computing building blocks and tools. One of these services is Amazon Elastic Compute Cloud, which allows users to have at their disposal a virtual cluster of computers, available all the time, through the Internet. AWS's version of virtual computers emulate most of the attributes of a real computer, including hardware central processing units (CPUs) and graphics processing units (GPUs) for processing; local/RAM memory; hard-disk/SSD storage; a choice of operating systems; networking; and pre-loaded application software such as web servers, databases, and customer relationship management (CRM).

The AWS technology is implemented at server farms throughout the world, and maintained by the Amazon subsidiary. Fees are based on a combination of usage (known as a "Pay-as-you-go" model), the hardware/OS/software/networking features chosen by the subscriber, required availability, redundancy, security, and service options. Subscribers can pay for a single virtual AWS computer, a dedicated physical computer, or clusters of either. As part of the subscription agreement,[5] Amazon provides security for subscribers' system. AWS operates from many global geographical regions including 6 in North America.[6]

In 2020, AWS comprised more than 212[7] services spanning a wide range including computing, storage, networking, database, analytics, application services, deployment, management, mobile, developer tools, and tools for the Internet of Things. The most popular include Amazon Elastic Compute Cloud (EC2) and Amazon Simple Storage Service (Amazon S3). Most services are not exposed directly to end users, but instead offer functionality through APIs for developers to use in their applications. Amazon Web Services' offerings are accessed over HTTP, using the REST architectural style and SOAP protocol for older APIs and exclusively JSON for newer ones.

Amazon markets AWS to subscribers as a way of obtaining large scale computing capacity more quickly and cheaply than building an actual physical server farm.[8] All services are billed based on usage, but each service measures usage in varying ways. As of 2017, AWS owns a dominant 34% of all cloud (IaaS, PaaS) while the next three competitors Microsoft, Google, and IBM have 11%, 8%, 6% respectively according to Synergy Group.[9][10]

The AWS platform was launched in July 2002.

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>>> Judge Halts Work on Microsoft’s JEDI Contract, a Victory for Amazon

The judge ordered work to stop on a cloud-computing contract for the Pentagon until Amazon’s legal challenge was resolved.


New York Times

By Kate Conger

Feb. 13, 2020


A federal judge in Washington ordered Microsoft on Thursday to halt all work on a $10 billion cloud-computing contract for the Pentagon, in a victory for Amazon, which had challenged the awarding of the contract.

In a sealed opinion, the judge, Patricia E. Campbell-Smith of the Court of Federal Claims, ordered work to stop on the Joint Enterprise Defense Infrastructure project, known as JEDI, until Amazon’s legal challenge was resolved. The 10-year contract was one of the largest tech contracts from the Pentagon, and Microsoft was set to begin work on it this month.

The decision adds to the acrimony surrounding the lucrative deal, which was a major prize in the technology industry, and ratchets up the legal battle around the transformation of the military’s cloud-computing systems. Amazon had been seen as a front-runner to win the JEDI contract, but the Department of Defense awarded it to Microsoft in October.

Amazon protested and said the process had been unfair. The internet giant claimed that President Trump had interfered in the bidding for the contract because of his feud with Jeff Bezos, Amazon’s chief executive and owner of The Washington Post. The Post has aggressively covered the Trump administration, and the president has referred to the newspaper as the “Amazon Washington Post” and accused it of spreading “fake news.”

“This is all setting the stage for a major court fight between Amazon and Microsoft, with the D.O.D. caught in between,” said Daniel Ives, an analyst for Wedbush Securities who has been tracking the JEDI contract. “It’s a political football that’s being kicked around.”

Frank Shaw, Microsoft’s vice president of communications, said in a statement on Thursday that the company was “disappointed with the additional delay” but that it believed “we will ultimately be able to move forward with the work to make sure those who serve our country can access the new technology they urgently require.”

“We believe the facts will show they ran a detailed, thorough and fair process in determining the needs of the warfighter were best met by Microsoft,” he added.

Lt. Col. Robert Carver, a Pentagon spokesman, said it was disappointed by the decision, which has “unnecessarily delayed implementing D.O.D.’s modernization strategy and deprived our warfighters of a set of capabilities they urgently need.” He added that the Defense Department was “confident in our award.”

When Microsoft was awarded the contract, the Defense Department was explicit that the bidding process had been correctly executed. “The acquisition process was conducted in accordance with applicable laws and regulations,” it said at the time. “All offerors were treated fairly and evaluated consistently with the solicitation’s stated evaluation criteria.”

In public, Mr. Trump has said there were other “great companies” that should have a chance at the contract. But a speechwriter for former Defense Secretary Jim Mattis said in a recent book that Mr. Trump had wanted to foil Amazon and give the contract to another company.

In December, Amazon filed its legal challenge against the awarding of JEDI, saying that Mr. Trump used “improper pressure” on the Pentagon at its expense. The company also argued that its cloud-computing services were superior to Microsoft’s and that it was better situated to fulfill the contract’s technical requirements.

Since then, Amazon has escalated the battle. The company asked the court this week to let it depose Mr. Trump and Defense Secretary Mark Esper. Amazon argued that hearing from them was crucial to determine if they had intervened against it in the contract. Mr. Esper had recused himself from the contract award decision in October, citing his son’s employment at IBM, one of the early bidders on the JEDI contract.

“The question is whether the president of the United States should be allowed to use the budget of the D.O.D. to pursue his own personal and political ends,” an Amazon spokesman said at the time.

The Pentagon said it was strongly opposed to Amazon’s deposition request. Microsoft said Amazon “only provided the speculation of bias, with nothing approaching the ‘hard facts’ necessary” to demand them.

In another court filing this month, Amazon argued that an injunction was necessary to prevent it from losing the profit it could earn from the contract.

JEDI “will transform D.O.D.’s cloud architecture and define enterprise cloud for years to come,” wrote Kevin Mullen, an attorney representing Amazon in the case.

The JEDI contract has also been in the spotlight because it is viewed as crucial to the Pentagon’s efforts to modernize its technology. Much of the military operates on computer systems from the 1980s and ’90s, and the Defense Department has spent billions of dollars trying to make them talk to one another.

Mr. Ives, the analyst, has said that landing the JEDI contract put Microsoft in a position to earn the roughly $40 billion that the federal government is expected to spend on cloud computing over the next several years.

On Thursday, Judge Campbell-Smith also required that Amazon pay a $42 million deposit that the court will hold in case it later determines that the injunction was wrongfully issued and that Microsoft is owed damages. Amazon must submit a plan for offering the money to the court by next Thursday, and it must agree to redactions to the judge’s order no later than Feb. 27 so that it can be made public.

The preliminary injunction was a “prudent decision” given the complexities of the deal and the monetary stakes, Mr. Ives said, and the $42 million demanded from Amazon would not be a burden for the company.

“It’s less than a rounding error relative to their treasure chest,” he said. He added that he expected Microsoft to prevail in the deal.

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>>> WisdomTree Cloud Computing Fund (WCLD) -


https://www.wisdomtree.com/etfs/thematic/wcld


The WisdomTree Cloud Computing Fund seeks to track the price and yield performance, before fees and expenses, of the BVP Nasdaq Emerging Cloud Index, an equally weighted Index designed to measure the performance of emerging public companies focused on delivering cloud-based software to customers.

Why WCLD?

Gain targeted exposure to emerging, fast-growing U.S.-listed companies (including ADRs) that are primarily focused on cloud software and services
Use to replace or complement growth-oriented and technology sector investment strategies

Use it to satisfy demand for prospective high growth companies, with the potential for better sales growth, margins, and operating leverage.

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