We are starting to see signs of this pandemic slowing down, but the world will never be the same and cloud software is ready to pounce on that change.
We are all becoming adjusted to the ‘new normal’ of life under lockdown, which means isolation for many, tense grocery trips for others, and anxiety for all. Companies like Slack (NYSE: WORK), Zoom (NASDAQ: ZM), Netflix (NASDAQ: NFLX), and even Domino’s Pizza (NYSE: DPZ) are keeping us connected, sane, and fed during these times.
But all of these companies, as well as thousands of others that we may not be aware of, rely on one all-important element to keep doing what they do and generating boat-loads of cash:
Cloud computing.
Who dominates the cloud market?
We all act like we understand what cloud computing is. It’s an unseen, all-encompassing system of data storage, computing power, and all-round security (sometimes). There’s obviously much more to it than that, but common retail investors don’t need to know those intricacies.
What we do want to know, however, is what companies stand to gain the most with the rise of this technology. At the moment, Big Tech is in the lead, with the cloud market largely dominated by Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), and Google (NASDAQ: GOOG).
There are other players in the game who are making big moves on the market too, such as Nvidia (NASDAQ: NVDA) and Oracle (NYSE: ORCL). Even Alibaba (NYSE: BABA) has cut an impressive 5% share in the cloud market for itself. But the big three above control a collective 56% of the overall market share, with Amazon Web Services (AWS) responsible for 32.4% of that.
Coronavirus-sized opportunities for cloud computing
Everything from Zoom calls to iPhone storage relies on cloud computing. As millions of people are forced indoors due to this pandemic, the need for the cloud has increased ten-fold. You might think that this will all come to an end once the pandemic passes, but that is far from the truth.
Online shopping was becoming the norm long before this pandemic hit, and with analysts estimating that by 2040, more than 90% of all retail shopping will be online, this trend is not slowing down. E-commerce companies such as Amazon, Shopify (NYSE: SHOP), and MercadoLibre (NASDAQ: MELI) have already seen a surge in activity, as shown in their recent earnings reports. All of this online shopping requires cloud computing, from checkout to cybersecurity. With that market having a long growth runway, cloud computing will be the main benefactor.
Netflix, Amazon Prime, Disney+ (NYSE: DIS), and all other streaming services rely heavily on cloud computing too for security, storage, and even the algorithm for your personalized accounts. Think of it this way: without cloud computing, how would any of us would have watched ‘Tiger King’? As streaming continues to boom, with Netflix boasting more than 180 million users, and Disney adding 54 million of their own, cloud computing will play an important part in this growth.
The coronavirus has made cloud indispensable
Imagine the world right now without cloud computing? It may not collapse, but it will surely be mired by inefficiencies and a debilitating lack of options to go on with day-to-day living.
I could go on and on about the opportunities for cloud computing, from online banking to getting an Uber (NYSE: UBER), but we’d be here all day. here’s no hiding from the fact that this already booming industry will now be accelerated by the plight of COVID-19, and with the emergence of newer sectors such as Teladoc-led (NASDAQ: TDOC) telehealth, cloud computing will be needed more than ever.
If I was only allowed to bank on one industry, cloud computing would be the one for me, and Big Tech has taken the reins on its galloping growth.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.