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Cloud Computing at an Inflection Point

Global Equities

BNP Paribas Asset Management
 

Key Takeaways

  • Information technology leveraging a Cloud infrastructure is becoming a central and strategic priority for most businesses. The structural shift to the Cloud changes the business model, revenue growth and margin trajectory for every IT company.
  • The winners are likely to be the established HyperCloud infrastructure providers as well as software application companies with credible cloud-based strategies (SaaS). Most software categories are split between a few dominant players and a long tail of smaller vendors. This fragmentation creates a big opportunity for the largest SaaS vendors to gain share as some of the on-premise vendors are unable to successfully bring to market competitive SaaS solutions.
  • The transition to the Cloud will put pressure on hardware vendors, infrastructure software vendors (besides the Cloud infrastructure providers) and select IT-service companies.

In 2016 we published a White Paper on Cloud Computing. There we concluded that the introduction of Cloud computing was entering a period corresponding to a hundred years ago, when centralized electricity production was introduced. As with the effects of electrification, we are about to see a real world impact everywhere from the adoption of Cloud computing. Lower barriers of entry for companies, access to best-in- class technologies for everyone and accelerating innovation and entrepreneurship leading to much im- proved productivity will have profound consequences.

In this follow-up paper we provide an update on the progression and try to assess how IoT, A.I. and 5G will grow symbiotically with the Cloud and argue that the Cloud will be the foundation for the digital transformation of enterprises as we enter the Second Machine Age. Information technology leveraging a Cloud infrastructure is becoming a central and strategic priority for most businesses. This is a fundamental change that will play out over many years.

Read more Download the White Paper

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