Investors express cautious interest in the cloud sector

February 24, 2015

Market research analysts have often used the old phrase “follow the money” when seeking the next emerging business sector. The saying holds true when considering the cloud computing industry, which has been rife with capital investments and seems to have near-boundless potential in global commerce.

That said, investors are treading with caution because of the widespread threats of data breaches. However, they’reĀ letting their dollars do the talking. Firms have focused on everything from early seed cloud operations to later stage veterans and, in turn, have buttressed a thriving market.

The wide path of cloud investment
Thoma Bravo, a tech-focused private equity firm based in Chicago and San Francisco, has invested in more than 25 companies that leverage the cloud, according to Mergers & Acquisitions. And the 35-year-old firm marks just one of many across the world that are putting all their chips in the market.

“The cloud has been talked about for years as something that would happen in the future,” Bravo told the news source. “The future is here and the trend toward the cloud is irreversible. There’s no more debate about it anymore. The cloud is the preferred model of consumption.”

Bravo highlighted three primary reasons for the cloud’s ascent in recent years. He said that, considering recent developments in global communication and data centers, the cloud is a feasible solution. He noted that it is a more efficient method to engineer and share data by using the most cutting edge technology at all times. Finally, he said that the cloud allows you to have a better understanding of a customer’s operating budgets, which are often much greater than capital spending budgets.

Cloud survey indicates cautious willingness of investors
The TABB Group, a financial markets research and advisory firm, surveyed 66 investment firms and found that 23 percent are comfortable using public cloud services, according to Cloud Tech. This figure seems to indicate that many investors don’t yet have much faith in cybersecurity measures such as decentralization, encryption and biometrics. However, six in 10 respondents said that they plan to increase their public cloud spending in the next year.

“Although the market at large is still not ready to leverage the public cloud for mission-critical operations and proprietary data it considers competitive differentiators, institutions have opened up to the greater possibility of utilizing the cloud to maintain commoditized operations in a cost effective and timely manner,” Shagun Bali, a TABB research analyst, told the news source.