I created a number of model portfolios based on leading public hosting companies. The list included: Digital Realty Trust; DuPont Fabros; Equinix; Internap; Iomart; Macquarie Telecom; Navisite; Rackspace; Savvis; Switch & Data; Telecity; Terremark. During 2010, this index has gained 45% to the Nasdaq's 17%
I also created a sub-group of those companies with explicit cloud computing offerings. That included Equinix; Navisite; Rackspace; Savvis; Terremark. During 2010, this sub-index has gained 57% to the Nasdaq's 17%
I'm not surprised by either outcome... Assuming the market doesn't lie because it takes into account valuations and expectations, I draw a few personal conclusions:
- More enterprises are turning to outsourcing their IT. Whether or not it involves cloud computing, I suspect enterprises find it advantageous to hand-over IT (management, or at least co-location) to businesses where this technology is core. It may also indicate the skyrocketing consumption of computing power by enterprises.
- It would appear that hosting firms with Cloud Computing offerings are being valued higher than their counterparts. I haven't looked at cashflows or balance sheets (yet) to determine whether this is actual value, or speculative value.
2 comments:
Hello,
Cloud hosting provides the organizations with an avenue to opt for a service under which they have to pay only for the power and space they use
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