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Effective Investment in Cloud Computing Technology
FREMONT, CA – Cloud computing has become the foundation for the integration of advanced technologies, including the internet of things (IoT), artificial intelligence (AI), machine learning (ML), and blockchain. The enterprises across the world are steadily employing cloud technology to maintain their competitive edge in the market. Over the past couple of years, there has been a gradual shift from traditional information technology (IT) offerings toward cloud-based offerings.
The benefits of cloud technology include flexibility, ease of access, scalability, recovery, efficiency, and effective cost management. However, many challenges hinder the successful adoption of cloud technology. In manufacturing industries, managements face many obstacles in integrating cloud with machines, assembly lines, and other physical components of factories. In the case of healthcare and education, there is a lack of incentive for cloud adoption due to regulatory constraints.
Considering all the factors, there are several estimations regarding the cost-effectiveness of cloud offerings. The adoption of cloud liberates the enterprises from the hassles of procurement, planning, and maintenance of infrastructure. Nevertheless, it is vital for organizations to possess a comprehensive understanding of a compatible cloud computing model. The cloud, hybrid, and on-premise deployment approaches offer up to three computing models, namely, infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS).
The shift to the cloud is estimated to hike the IT spending to $1.3 trillion over the next three years. The First Trust Cloud Computing ETF tracks the identity services engine (ISE) cloud computing index containing 28 companies offering cloud computing services. The ETF manages $2.23 billion in assets, with stock holdings of companies such as Zynga, VMware, Netflix, Teradata, Equinix, Cisco, SAP, Facebook, Oracle, and Open Text which constitute 50.18 percent of the portfolio. The top five holdings make up 26.72 percent of the concentration ratio.In terms of market share, Microsoft is one of the key players.
Also, Google has increased its focus on the cloud over the last few years and stands on par with IBM in terms of market share. However, IBM has retained its position as a leading provider of hosted private cloud services. During the first quarter of the year 2019, the cloud revenue of IBM grew to $19.5 billion. The shift toward cloud has offered new opportunities to technology providers to invest in the technology.