Saturday, July 16, 2011

Is Your Head in the Clouds? Are Your Stocks in the Clouds?

Have you seen more ads on TV and in print about clouds and cloud computing? Cloud computing is having your programs and data stored remotely on a server in another location, instead of on your own individual computer. As long as you have an Internet connection, you can have a cheap old computer and still take advantage of cloud computing. The servers of companies that provide this service represent the 'clouds', and those servers can be located anywhere. Yahoo (YHOO) mail, Google (GOOG) gmail, and Microsoft's (MSFT) hotmail are examples of cloud computing in a limited way. The email servers are not in your office or home as you use the Yahoo or Google or Microsoft servers. Some universities and companies are utilizing the email services of Google, which saves them money on servers and saves on staffing.

Cloud computing can reduce waste and carbon footprints along with providing significant cost savings. Companies that utilize cloud computing don't need to Costs relating to the disposal of old computers and servers is cut back significantly. Data security is the job of the cloud computing firm. Businesses can eliminate the techs that have to come out and install new software to each employees' station. Network administrators monitoring the company's servers are reduced also.

Investors like the green and financial benefits of cloud computing companies. According to, there are over 25 stocks in the cloud field, based oh the free Cloud Computer Stock list, which includes companies involved in server farms and outsourced storage systems.

The one of the largest corporations that falls into the cloud computer arena is (CRM), which is a provider of customer-relationship management services. The company's stock symbol stands for Customer Relationship Management. Salesforce has customers of all sizes, including the Staples (SPLS), Expedia (EXPE), News Corp. (NWS-A), and SunTrust Banks (STI). Salesforce trades at 43 times forward earnings. Latest quarter revenues were up 33.8% year-over-year. However, GAAP diluted earnings per share were breakeven, and non-GAAP diluted earnings per share decreased 7% year-over-year to $0.28.

Citrix Systems, Inc. (CTXS) provides on demand applications and online services, including GoToMeeting, GoToWebinar, GoToTraining, GoToAssist, and GoToMyPC. This debt free company has a forward price to earnings ratio of 28. The latest quarterly earnings were up 55% on a revenue increase of 18%.

VMware (VMW) is another major cloud and virtualization company. Its product VMware vSphere is a cloud computing data center platform. It sports a forward price to earnings ratio of 44. The company reported that latest earnings increased an 60% in earnings on a 33% increase in revenues.

To access the free Excel spreadsheet database of numerous companies involved in cloud computing in some way, that can be downloaded, sorted, and updated, go to You can also get info on the green aspects of cloud computing from my book The Green Light on Green Stocks: A Quick Guide to Green Investing and Making Money in Alternative Energy Stocks, in which I described cloud computing as a green industry and a way of providing money saving services to many corporations.

Disclosure: Author owns YHOO.


No comments: