Dishing on The Good, The Bad and The Opportunity of The Cloud

Fellow investor,

Over the last year or so, you've probably heard a lot about “the cloud” but ask anyone what it is and you get a half baked description. The reality is there’s a lot to consider when you put our digital content in the cloud and choose a cloud provider be it for music, movies, personal documents or ones for work. Whether its Apple (AAPL) and iCloud, Microsoft (MSFT) and Skydrive, Google (GOOG) and its Drive solution or DropBox, there are shortcomings with each of them. Because the cloud is a key aspect of my Always On, Always Connected PowerTrend I wanted to do a deep dive on the subject with a mover and shaker in the space.

 

Joining me this week on PowerTalk as I discuss all things cloud with Yorgen Edholm, CEO of Accellion, a leading enterprise cloud file sharing company. We particularly focus on security concerns and how mobile technology will transform the cloud. Because Accellion serves more than 11 million customers across 1,700 of the world’s leading companies like Proctor & Gamble (PG), Kaiser Permanente, the U.S Securities & Exchange Commission, but the company is also profitable, Yorgen is a person worth talking to about the cloud, its drivers and benefits  as well as its short comings.

 

Here are some tidbits from my conversation with Yorgen: 

• He sees mobile and the shift toward bringing your own device (BYOD)  to work as key drivers of cloud adoption;
• Yorgen is a firm believer in the death of the PC, which means bad things for Dell (DELL) and Hewlett-Packard (HPQ), and he sees no slowdown in businesses adopting Apple’s devices, particularly the iPad.
• Security features and other tools in the cloud environment will be the key differentiators between those cloud providers that are successful and those that are not be it with individual or enterprise customers. 
• Amazon’s (AMZN) Web Service is a key partner for Accellion, which should serve as a reminder that there is more to Amazon than just Internet based shopping;
• Lastly, there are a number of cloud providers out there and not only does Yorgen sees a wave of consolidation coming, but we talk about what you should consider when choosing your cloud solution.

From an investor’s perspective, I drew several conclusions from my PowerTalk with Yorgen. First, demand prospects for data center companies will remain robust as people and companies continue to shift into a cloud-based environment. That confirms my thesis behind adding Digital Realty Trust(DLR) to the PowerTrend Portfolio last October. Second, it affirms that demand for Apple’s mobile products -- smartphones and tablets -- remains strong. That not only vouches for my long-term view on Apple and its shares, but makes me feel even more comfortable about adding more shares to the portfolio over the last several weeks. Lastly, it confirms something that I have suspected for some time - there is little reason to own shares of either Hewlett-Packard (HPQ) or Dell (DELL) as neither has figured out how to monetize let alone compete in the non-PC world of smartphones and tablets.