The cloud is coming – here’s a way to profit

I’m looking forward to the day when I can drop my Windows laptop in the bin.

I bought a Chromebook last year, you see. Chromebooks are laptops made by Google. The thing about them is that they do their stuff ‘in the cloud’. My Chomebook is light, fast, virus-free and easy to use. I bought it as a backup computer, but I’ve been really impressed by it. I think the day is not far away when it’ll do everything I need.

I’m excited by cloud computing, but I’m not sure that others feel the same way as I do. In a recent US survey, well over half the respondents said they didn’t use cloud computing. But in reality, 95% of the population does!

Last year, I wrote about launching into the cloud. Today we’ll catch up on all things cloudy…

What is the cloud?

If you’re unfamiliar with the term ‘cloud computing’, don’t worry, it’s really only an extension of web services you already know. Think how email or Facebook lets you use its storage, processing power and software from any location. This is a ‘public cloud’, because it is open to anyone with internet access – you can read more about cloud computing here.

As the number of different devices we use continues to spiral, cloud computing is becoming increasingly important. Ultimately, we want to be able to share our data across devices. We want access to film, social media, personal and work-related documents from wherever we are, and with whatever devices come to hand.

Businesses and public organisations use cloud technology to store and manage data too. Recently I moved most of my business data onto a so-called ‘private cloud’ – so that data can be shared and accessed by whoever I authorise. It also means I no longer have to worry about backing up data and all the security issues that surround it.

For small businesses, and even individuals, this means you’re no longer held hostage to some computer geek.

The Orwellian state

2013 was a big year for the cloud but it looks like 2014 will be even bigger.

However – as I found out after writing several articles on the cloud – many remain sceptical, especially when it comes to security issues. Edward Snowden’s revelations are part of this dark technological cloud.

Many people will blithely tell you that the cloud isn’t secure. They’re worried about somebody hacking their data, or of downloading some sort of virus by accident.

Now here’s the thing: far from increasing these risks, cloud computing can considerably reduce them.

The first advantage of a cloud device like a Chromebook is security. I no longer need all that annoying (and sometimes expensive) security software. You can’t download anything onto these cloud-based machines, which means no  viruses and other nasties.

After security, the second question people sometimes have about cloud computing is reliability. After all, it kind of makes sense to have all your programs and data on your own PC – why would you want to be dependent on some server in the middle of a Californian desert? What if you lose your connection and can’t access your data? Or worse, what if the guys holding your data have a breakdown?

Let’s deal with the provider first. Take companies such as Iomart, Google, Apple, or even Amazon. All provide cloud-based services and have considerable skill in blocking out malicious threats and keeping all your files safe. Things are automatically backed-up and it’s very rare they won’t have your data available and online. In fact, various services will actually provide a guarantee that they will ‘never’ go down. Now, what sort of IT department can promise the same?  But sometimes things will go wrong. That’s the nature of IT – at least in this case, it’s somebody else’s problem! They will get the service up and running pretty soon.

But even if your provider is ultra-efficient, it’s still true that you, yourself cannot always be online. But the way I see it, my business and personal life is increasingly dependent on the web anyway. Without internet access, I’m pretty much in the dark. The way round the problem is to have a back-up. On the rare occasion I lose my connection, I can always create a wi-fi connection through my smartphone. And anyway, my old laptop is synchronised to the cloud files– so even if there’s no connection, I’m not totally in the dark.

From where I’m standing, much of the scepticism surrounding cloud computing is overblown. Sure, it’s not perfect, but it’s proving to be pretty darned useful. And as for government snooping, well, I guess there’s not much I can do about that. I’ll just have to stay clean!

I can totally see how the cloud would be very useful to some sort of Orwellian state. But I suggest that the days when our esteemed leaders wanted to exert this sort of political control should be left to history (I know many will say I have my head in the clouds!) For the moment, I’ll take them at their word and assume any snooping is for genuine security reasons.

The cloud is happening no matter what

I can’t say I’m a technology fiend, but I try to keep up with developments. From what I can see, 2014 will see the continued proliferation of so-called smart devices – all dependent on cloud computing. Individuals and organisations will become more dependent on the cloud too.

The shift that started with mobile phones to smart phones has quickly moved to new devices like tablets and ‘phablets’. Smart TVs and gaming devices connected to the internet are becoming the norm. But this year, it goes a step further. We’ll see more and more household devices becoming smart. Washing machines, ovens… even your boiler. All these things are only smart because they’re linked into some cloud-based backend (to use the jargon!).

These backend cloud service providers look increasingly interesting.

Last year, I offered a suggestion on the best way to play this phenomenon. It’s cloud computing specialist Iomart (LSE:IOM) and it’s been a pretty solid investment.  When I suggested some investment exposure through Iomart  in June last year, the shares were already hot. They quickly moved up from £2.36 to £3.15 within just a few months. Since this burst, the stock has come off the boil and the shares have settled at around £2.60.

I’ll provide an update on IOM soon (including the most recent trading figures) – and we’ll see if this price still offers an attractive entry. In the meantime, read my ten reasons for proposing Iomart in the first place.

This article is taken from our FREE daily investment email The Right Side.
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3 Responses

  1. 09/01/2014, Etlbajb wrote

    Hi … Many people are already pretty plissé d off with GOOGLE … Problems with their drive and google docs , and even calendar..
    What is to stop them or others charging for use of their cloud once they have say 100 million locked-In users ?

  2. 09/01/2014, Dilip wrote

    What has happened to Bengt’s perennial favourite “Close Enhanced Commodities Fund II”?? He usually harps on about it….

  3. 07/02/2014, Trevor Smith wrote

    If Microsoft bring out a Chrome Book type lap top of their own [and I heard a rumour they were working on it] running Sky Drive – soon to be renamed One drive- then Goggle will have a big problem because Google Docs etc are inferior in every department compared to Sky Drive Office

Commenting on this article closed

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