The cloud is the crucible for future innovation
The Cloud is the ubiquitous computing and storage platform that offers virtually unlimited scalability at very low cost to companies who are deploying new software, services and telecommunication business models. It is capturing a disproportionate amount of the world’s innovation because it allows the best ideas to scale quickly and efficiently.
It remains early days for the Cloud
The world has made massive investments in technology that will not disappear quickly. But the cloud offers cost and flexibility advantages that will eventually cause the displacement of those investments, led by new companies that focus on them.
New entrants usually win
Every generation of new technologies has produced a new cohort of winning companies. The incumbents rarely re-invent themselves as they have neither the innovative cultures nor the willingness to disrupt their own businesses. The winners of tomorrow are just starting their lives as public companies today.
Public technology companies offer the best value
Technology focused private equity and venture capital funds have billions in undrawn capital, leading to intense competition and high valuations in private technology transactions. Eventually those companies access the public markets seeking broad based liquidity for founders and VCs and their valuations then tend to be tempered by the other public companies competing for capital.
At present, there appears to be little premium if any, paid for the liquidity that we value.
The Cloud is where AI and machine learning will flourish
The algorithms that drive transformative innovations in artificial intelligence and machine learning need the massive data sets and ubiquitous connectivity that the cloud offers. The companies that dominate the Cloud will dominate AI, as their access to large but focused data sets allow them to train their algorithms most effectively.