Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



A Smart Cloud Computing Strategy

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Even as the recession torches traditional software vendors like SAP (NYSE: SAP  ) , cloud computing is taking hold. Last week, (NYSE: CRM  ) said that its customer count ballooned 36% to 51,800 in the third quarter. Profits improved 55%.

Impressive, yes? I'll say, but for cloud computing to endure, it'll have to give IT managers and other industry participants more than just a good do-it-yourself, zero-infrastructure starter kit. NetSuite (NYSE: N  ) just booked a deal with Hewlett-Packard (NYSE: HPQ  ) that should help to achieve that goal.

HP will grant NetSuite access to its channel of 15,000 resellers in exchange for support resources. The result will presumably be a broader embrace of cloud computing among traditional systems integrators and value-added resellers -- firms that profit by customizing packaged software to fulfill a business need.

Think of what Accenture (NYSE: ACN  ) and India's Infosys (Nasdaq: INFY  ) do, but on a smaller, more specialized scale. Cloud computing has been considered a bane for VARs and SIs because of there's no "software" to customize; all the code resides on a distant web server.

As THINKstrategies founder Jeff Kaplan wrote recently:

These VARs and SIs have been uncertain about the impact of SaaS solutions and on-demand services on their businesses. In fact, many feel down right threatened by these services. There is no question that SaaS solutions and on-demand services eliminate much of the upfront planning and design, installation and integration, and ongoing support requirements (which have been the bread and butter of VARs and SIs' revenue streams), not to mention the margins they made on hardware and software product sales.

Or at least, they did before NetSuite altered the equation.

In my experience, Chief Information Officers rarely buy software licenses independently. More often, they'll engage project teams -- VARs and SIs, in other words. If NetSuite wins converts among those running projects for CIOs, it's a strategic win for shareholders and for cloud computing.

Up, up, and away with Foolishness in the cloud:

Stock news, financial commentary, and your daily dose of Foolishness: Get plugged in to The Motley Fool on Twitter!

Accenture is an Inside Value pick. Try the service free for 30 days, with no obligation to subscribe.

Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this article at the time of publication. The Motley Fool's disclosure policy was at base camp on cloud 7 and an hour away from going for the summit as Tim was writing.

Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 781961, ~/Articles/ArticleHandler.aspx, 10/25/2016 1:32:44 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,190.69 -32.34 -0.18%
S&P 500 2,144.97 -6.36 -0.30%
NASD 5,285.30 -24.53 -0.46%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 1:16 PM
N $100.14 Down -1.36 -1.34%
NetSuite CAPS Rating: **
ACN $115.26 Down -0.54 -0.47%
Accenture CAPS Rating: ****
CRM $74.60 Down -0.46 -0.61% CAPS Rating: ***
HPQ $13.91 Down -0.06 -0.46%
HP CAPS Rating: ***
INFY $15.67 Down -0.32 -2.00%
Infosys Technologi… CAPS Rating: *****
SAP $88.30 Down -0.03 -0.03%
SAP AG (ADR) CAPS Rating: ****