Your portfolio in the clouds
At its simplest, cloud computing is computing via the Web rather than your local machine. The software, the processing power, it's all handled in a data center off the coast of Madagascar. Never mind the guy with the white cat and evil laugh. He's been there for years. Calls himself "Master of the Internets."
No word yet on whether anyone will file suit for trademark infringement. I doubt it, though. Fables are tough to beat in court. Just ask anyone who's watched the original Miracle on 34th Street.
So let's stick with reality. Here, the central truth of cloud computing is there are millions of servers delivering content to Web-connected users daily. Some of that data even originates in Madagascar.
More of it, though, originates here, at data centers operated by some of the biggest tech firms. Increasingly, they're storing, filtering, and delivering corporate data, enhancing or even replacing buy-and-install software from Oracle
Roughly 13% of 2008 software sales were to cloud providers, the Associated Press reports. Meanwhile, analyst Frank Gens of IDC Research estimates that cloud services spending will rise 27% a year within major IT segments over the next four years.
How to compute in the cloud
I know what you're thinking. No one's really using cloud computing, right? Sure you are. Do you bank online? That's a crude form of cloud computing, especially if you use the Web to track transactions a la our free Mint.com personal finance service.
And what of the iTunes App Store? YouTube? These are services you're exposed to via the cloud. Clicking in your browser activates them, but the magic happens elsewhere. If Santa's gift to Apple is any indicator, a lot of you love the games you're finding via the cloud.
Millions also like Twitter, a Web-based micro-blogging service that's supported by an entire ecosystem of software that brings the cloud to your desktop. TweetDeck, built on top of Adobe's
The convenience and low cost of cloud services makes them attractive to both consumers and IT managers now, in a time of recession. That's at least partly why writer Darryl Taft of trade magazine eWEEK has said that 2009 "is shaping up to be a big year for the cloud."
Let these cloud giants rain cash on you
If he's right, and I think he is, then which cloud computing stocks should you, the Foolish investor, buy? I have three ideas.
Let's start with Amazon.com
Finally, the evangelist: salesforce.com
But those are my three ideas. What about yours? Would you buy any of these stocks? Would you short any of them? Insert your comments below, and be sure to tune in tomorrow for a look at three tech stocks you'll want to sell in 2009.
Apple and Amazon are Stock Advisor selections. Microsoft is an Inside Value pick. Google is a Rule Breakers recommendation. Try any of these Foolish services free for 30 days. There's no obligation to subscribe.
Fool contributor Tim Beyers is a member of the Rule Breakers team and had stock and options positions in Apple and Google and a stock position in Oracle at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is tech-tastic.