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Best- And Worst-Performing Cloud Computing Stocks Feb. 10th To Feb. 14th And Year-to-Date

cloud computing forecast update 2012The five highest performing cloud computing stocks year-to-date in the Cloud Computing Index are Akamai (NASDAQ: AKAM), F5 Networks (NASDAQ: FFIV), Juniper Networks (NYSE:JNPR), Fusion-IO (NYSE:FIO), Qualys (NASDAQ:QYLS) and Workday (NYSE:WDAY).  A $10K investment in Akamai on January 2nd of this year is worth $12,901 and $10K invested in F5 Networks is worth $12,509 as of market close yesterday.   IBM, Microsoft, Oracle and SAP share prices are included for comparison.

best performing YTD Feb 14

Akamai delivered better-than-respected results for their latest fiscal quarter and year, gaining $436M in revenues for fiscal Q4 and $1.578B for fiscal year.  Media Deliver Solutions revenue increased 19% year over year to $207.5M in revenue.  On their latest earnings call earlier this month, Akamai also says that traffic for gaming, social media, software and video downloads all continue to accelerate.  Support and Service revenues grew 36% year over year, reaching $36.3M in fiscal Q4, and Performance And Security revenue reached $192.2M, increasing 18% year over year.  Adjusted EBITDA for fiscal Q4 was $192M.

The following graphic compares how $10,000 invested on January 2nd of this year in the highest performing cloud computing stocks, in addition to IBM, Microsoft, Oracle and SAP are valued today.

total dollar value 10K feb 14 2014

Please see the full Cloud Computing Index for market caps, average volumes, 52-week high and low share prices, Earnings per Share, Price/Earnings Ratio, and Beta.  I am using the Google Finance Portfolio option to track the performance of these stocks.  For information on how this index was created, see the description at the end of this post.  I do not hold equity positions or work for any of the companies mentioned in this blog post or included in the Cloud Computing Index and this post is not meant to provide investment advice.  It is simply a glimpse into the performance of these company’s stock prices over time.  The following is this week’s Cloud Computing Index.

Cloud Computing Stock Index February 14

Best Performing Cloud Computing Stocks, February 10th to February 14th, 2014

Capturebest performing for the week feb 14

Worst Performing Cloud Computing Stocks, February 10th to February 14th, 2014

worst performing for the week feb 14

Best Performing Cloud Computing Stocks In 2014

best performing YTD Feb 14

Worst Performing Cloud Computing Stocks In 2014

worst performing YTD Feb 14

Comparing Cumulative Stock Performance Performance of the Cloud Computing Index over the last year is compared to NetSuite, Salesforce, IBM, Oracle and SAP is below. This index has been up 27.58% over the last year, with NetSuite (NYSE:N) up 63.84%, Salesforce (NYSE:CRM) up 43.50%, IBM (NYSE:IBM) down 8.59%, Oracle (NYSE:ORCL) up 9.10% and SAP (NYSE:SAP) up .14%. Please click on the graphic to expand for easier reading.

trending

Specifics on the Cloud Computing Stock Index I used The Cloud Times 100 as the basis of the index, selecting twenty companies all of which are publically traded.  The latest edition of the Cloud Computing Index is shown here.  The filter applied to these companies is that 50% or more of their revenues are generated from cloud-based applications, infrastructure and services

Why Cloud ERP Adoption Is Faster Than Gartner Predicts

200393880-001A recent study completed by Gartner titled Survey Analysis: Adoption of Cloud ERP, 2013 Through 2023 published on January 24, 2014, written by Nigel Rayner advises CIOs and application leaders of financial services institutions to “consider cloud ERP as a potential replacement for aging core ERP systems that are out of support or running on an old technology platforms (such as mainframes).“

The methodology is based on a survey of Gartner Research Circle members from North America, EMEA, APAC and Latin America from companies that range in size from $10M to $10B.

Key take-aways of the study including the following:

  • Including the 2% that already have core ERP in the cloud, a total of 47% of organizations surveyed plan to move their core ERP systems to the cloud within five years. This is because their ERP requirements tend to be focused around administrative ERP (financials, human capital management and procure-to-pay) where there is a wider range of cloud options (compared with manufacturing).
  • In aggregate, 30% of respondents say that the majority of their ERP systems will be on-premises for the foreseeable future as can be seen from the following graphic.

cloud adoption pie chart

  • 30% of organizations surveyed said they planned to keep the majority of their ERP systems on-premise for the foreseeable future.  Manufacturing organizations dominated this survey segment.

Why Cloud ERP Is Accelerating Faster Than Gartner Predicts

Two-tier ERP is the Trojan Horse of cloud ERP.  If Gartner had asked their respondents about if and how cloud-based ERP systems are being considered and used in two-tier ERP strategies globally, their survey and previous forecasts would have been significantly different.

From researching and working with manufacturers where two-tier ERP strategies make perfect sense for extending their legacy ERP systems to move into new markets, the following key take-aways emerge:

  • Achieving faster time-to-market while reducing cost of quality.  This is quickly turning into a year of transition for many supply chains, with the shift most noticeable in aerospace and defense.  Tighter project schedules driven by reduced budgets, coupled with more aggressive launch schedules is making this the year of the agile supplier.  Cloud-based ERP systems are essential to suppliers in this industry especially.
  • Legacy ERP systems lack scalability to support 21rst century compliance. One CIO who is a good friend jokingly refers to the legacy ERP systems populating each division of the manufacturing company he works for as fuel for his silos of excellence.  His point is that legacy ERP systems don’t have the data models to support the current quality management and compliance requirements corporate-wide and are relegated to siloed roles in his organization.  Cloud-based applications, specifically designed for ISO 9100, AS9100 Rev. C can do what legacy systems can’t, which is span across the aerospace manufacturer’s entire operations.
  • SaaS-based manufacturing and distribution software will increase from 22% in 2013 to 45% by 2023.  According to MintJutras, a leading research and advisory firm tracking ERP trends, a survey completed in 2013 shows SaaS-based applications will steadily grow from 22% of all manufacturing and distribution software installed to 45% within ten years.  The catalyst for much fo this growth will be two-tier ERP system adoption.
  • Microsoft’s New CEO knows the enterprise and cloud’s role in it. Satya Nadella has the daunting task of bringing innovation back into Microsoft.  As Anshu Sharma writes in his blog post today Satya Nadella: Microsoft, Coffee and the Relevance Question provides an excellent analysis of the challenges and paradoxes faced by the new Microsoft CEO.  It’s common knowledge in the Microsoft Partner community that the company runs one of the largest two-tier ERP system architectures in IT today, with an SAP R/3 instance in headquarters and Microsoft Dynamics AX running in each subsidiary.
  • All cloud ERP providers including Microsoft intend to monetize two-tier as much as they possibly can, architecting their respective Cloud OS strategies and enterprise suites to capitalize on it. Microsoft released an overview of their Cloud OS strategies in the following presentation, which provides a thorough overview of their perspective of the hosting market and how it relates to their apps business. Also included is the following graphic, Cloud OS: Innovation at Scale.  All of the factors taken together will drive up adoption of Microsoft Dynamics AX 2012 and streamline two-tier enterprise sales across all cloud ERP providers.  Last year at Microsoft Worldwide Partner Conference the announcement was made that Microsoft Dynamics AX 2012 would be available on Windows Azure in July, 2014.

cloud scale

  • Mobility is unifying the manufacturing shop floor to the top floor faster than anyone thinks.  In traditional ERP systems mobile platforms are most often used for material handling, warehouse management, traceability, quality management, logistics and service tracking. From the discussions I’ve had with CIOs and a few CEOs of manufacturing companies, there’s a high level of interest in analytics, alerts and approvals on Android and Apple tablets.  These apps and the speed of results they deliver are the new corporate bling. Intuitive, integrated and fast, these mobile apps make it possible for senior managers to check up on operations for wherever they are globally, in addition to approving contracts and being notified of events via alerts.  For Gartner’s assessment of cloud ERP to have been complete in this survey, mobility also needed to be covered

Roundup Of Free Cloud Computing Online Courses

career-start1One of the best ways to capitalize on cloud computing’s growth from a career standpoint is to constantly be learning and gaining new knowledge.

Being able to apply the technological aspects of cloud computing to business problems quickly, combined with constantly developing expertise on how to manage legacy systems and cloud platforms is a very valuable, marketable skill.

Many manufacturers I meet with are grappling with the high maintenance costs and time latency of legacy systems when their business models are accelerating faster than ever.   Helping these enterprises bridge the gap between legacy systems and the urgent need for more accurate customer, supplier, pricing, and quality data creates many opportunities for career growth.

Free Cloud Computing Courses

The number and quality of free online cloud computing courses continues to grow, and lately the prices of fee-based online programs are dropping.  Not across the board, but clearly the competition of online education programs is changing in favor of the student.

The table below profiles free online cloud computing certificate and degree programs.  You can download a PDF of the full roundup of cloud computing courses here that also includes fee-based online programs.  Please click on the graphic to expand it for easier reading.

Roundup of cloud computing courses

Key take-aways from the roundup of cloud computing courses include the following:

  • edX & UC BerkeleyX are offering a series of courses on Engineering Software as a Service.  The first of two sessions offered by edX and UC Berkeley concentrate on engineering solid high performance cloud applications using agile techniques to design then code a Software as a Service (SaaS) application using Ruby on Rails.  The second session concentrates on deploying the application in the cloud and enhancing its performance using JavaScript.
  • Coursera and Vanderbilt University are offering Programming Cloud Services for Android Handheld Systems.  This class signifies a broader trend by Massive Open Online Courses (MOOC) where cloud computing and mobility are often being included in the same course.  This course includes instruction on how to apply patterns and frameworks to develop scalable and secure cloud services.  Included is coverage of mobile and cloud communication, data persistence, concurrency and synchronization, synchronous and asynchronous event handling, and security. The bulk of the examples are in Java using the Spring Framework and Jetty middleware platform. The examples will be run on Google App Engine and Amazon EC2.  This course is free. 
  • Google Developer Academy – Self-based e-learning site that has an excellent overview of Google AppEngine, Python App Engine and Google+ APIs.
  • Microsoft Research Windows Azure for Research Training – An innovative training program aimed at academicians and researchers, this is going to be an excellent learning platform regarding the Microsoft Windows Azure Platform.  Best of all, the course sessions and eventual online content are free.
  • MIT OpenCourseWare (OCW) – One of the most comprehensive collections of courseware available globally today, OCW  is a web-based publication of virtually all MIT course content. OCW is open and available to the world and is a permanent MIT activity.
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