As any IT guy or gal will tell you, cloud computing is and will likely continue to be one of the biggest trends in the industry. If you're among those who think cloud computing is simply about using your laptop while flying the friendly skies, we need to get you up to speed! So what is cloud computing and how can you profit from it? We've got that covered for you below.

What is cloud computing?
Essentially, cloud computing allows for IT resources (software and hardware) to be shared over a network -- usually on remote servers. For example, instead of installing software on your workstation, the software is hosted on a server and run over a network, which valid users can access. Examples are Yahoo!’s and Google's e-mail. Both Google (Nasdaq: GOOG) and Yahoo! are very active in their use of this technology.

The future in clouds
While the most well-known public clouds are on Google and Yahoo!, the future is in private cloud computing. Businesses, universities, and government agencies are all looking to utilize this technology as it produces lower costs. As organizations become more familiar with this know-how, combining public and private clouds is likely.

In the meantime, cloud computing is expected to continue experiencing a boon. According to IT research firm Gartner, worldwide revenue from cloud services is predicted to be about $68 billion this year. This represents an increase of nearly 17% from 2009. Better yet, Gartner forecasts continued growth in this area, particularly from overseas firms as they catch up with their U.S. counterparts. So there is still plenty of money to be made in this area.

How to profit?
How can you put this information on cloud computing to use? Besides a play on Google and Yahoo!, consider investments in Oracle (Nasdaq: ORCL), BMC Software (Nasdaq: BMC), and Informatica (Nasdaq: INFA). These three firms potentially stand to rake in big bucks thanks to the rush to hybrid (combined public and private) clouds. Let's take a closer look at the three.

Oracle is in the midst of a wide range of cloud-computing activities. It has been teaming with Amazon.com to offer customers a wide mix of cloud services and also offers hardware and software solutions utilizing clouds, as well as integrating its famed database within this environment. Oracle should also began to reap the technological benefits from is acquisition of Sun Microsystems, as the two combine expertise and allow Oracle to sell a complete solution that melds its software and hardware.

BMC Software faces a threat on one end as cloud computing may pressure sales of its help desk software. The firm partnered with salesforce.com (NYSE: CRM) in this area to head off the threat, but the loss of legacy revenues remains a threat. However, don't feel bad for them since they should see increased revenues in other areas. Those converting to hybrid cloud environments will look to BMC's products to keep their antiquated IT systems running aside newer systems to ensure a smooth transition. Moreover, BMC's service management software is valuable to customers as it allows them to configure, operate, and monitor clouds.

The ability to retain access to data on public clouds is a concern for businesses. For example, some data need to be shared while other need to remain private. Unfortunately, this is not simple to administer in a cloud environment. Luckily, Informatica has an "app for that." It provides software that enables the transfer of information between different systems. It has partnered with Concur Technologies (Nasdaq: CNQR) and salesforce.com in separate agreements to provide data management software for use in clouds.

How to get to cloud 9?
Which of these three companies looks the most attractive? Based on their technology alone, they all look to have strong potential. However, let's take a closer look at some numbers.

Company

Trailing P/E (TTM)

ROE (TTM)

Debt/Equity

Oracle

18.0

22.0

0.5

BMC Software

16.3

33.6

0.3

Informatica

46.2

15.2

0.0

P/E = price-to-earnings ratio. ROE = return on equity. TTM = trailing 12 months.

As you can see from the above table, all three companies have low debt-to-equity ratios. When considering the price-to-earnings multiple and return on equity, BMC Software seems to be the most appealing of the three. Oracle finishes a close second, judging by these criteria. Meanwhile, thanks to high growth expectations as the result of earnings nearly doubling over the past five years, Informatica is carrying a hefty valuation, according to the P/E ratio. Therefore, value investors would be wise to consider BMC Software, while growth investors should mull over Informatica's recent history of earnings growth.

Technology trends have historically been difficult to predict, but cloud computing is here for the long haul. Its focus on lowering information technology costs will ensure that enterprises consider switching to it. With these three companies mentioned above, investors could have their heads in the clouds with the potential for profits.

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Gerard Torres has no beneficial interest in any of the companies mentioned in this article. Google is a Motley Fool Inside Value selection. salesforce.com and Google are Motley Fool Rule Breakers recommendations. Amazon is a Motley Fool Stock Advisor pick. The Fool owns shares of Google and Oracle. The Fool's disclosure policy is the best disclosure policy in the business.