Can investors profit off the 'cloud'?

4:53 AM, Jun 18, 2012   |    comments
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Q: Are there good ways to invest in "the cloud?"

A: The heads of tech companies have their heads in the cloud.

The cloud, or rather massive central servers that can be used to save data, are revolutionizing technology. Consumers and businesses are increasingly choosing to store their data remotely. They can then use small mobile devices, no matter where they are, to access that data.

An easy-to-understand example of how the cloud is changing technology would be the way consumers are tracking their personal finance information. Companies like Mint and PageOnce are two examples of companies that allow consumers to use mobile devices to track their money. Using a smartphone, consumers can see their checking, savings and credit card account information. All the data are stored on remote computers, or the cloud, instead of on the device itself.

But it's not just about consumers. Giant companies like Oracle (ORCL), Microsoft (MSFT), Google (GOOG), (CRM) and Amazon (AMZN) are all angling for a piece of the cloud.

Some of the companies currently offer cloud-based services like the office productive suites from Microsoft and Google. Both of these companies are pitching customers the idea of allowing employees to edit and produce documents using word processors and spreadsheets on the cloud. Similarly, is pitching companies on its cloud-based software that allows sales people to track leads and sales, again, without having to install any software.

Meanwhile, Amazon and Microsoft are offering customers services where they can store their own mission critical software systems on the cloud. Companies hope such services can help them save money.

Companies like International Business Machines (IBM) and Accenture (ACN) are in the business of providing advice to companies looking to shift more computer systems to the cloud. And EMC (EMC) is in the business of providing computer storage equipment, which is one of the critical aspects of providing cloud-based services. And Oracle is developing versions of its business software that run on its servers.

As you can see, the cloud is increasingly looking to be dominated by many of the existing tech giants. It will require confidence for consumers and especially businesses to trust their critical data to servers operated by others. And for that reason, it's likely to expect the cloud to continue to be dominated by many of the familiar companies that have the resources to offer dependable and reliable services for many years to come.

By Matt Krantz

USA Today

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