4 Stocks To Make The Most Of The Cloud Computing Boom In 2020
Zacks Investment Research | Dec 26, 2019 08:31PM ET
The global business landscape is changing rapidly with cloud computing taking up a large share of traditional tech spending. Notably, there has been accelerated adoption of cloud-computing strategies within enterprises with analysts reportedly expecting more than 80% of businesses to shift to the cloud by the end of 2020.
Increasing acceptance has made cloud computing one of the most sought-after niches in the tech space.
Cloud Computing Going Mainstream
World’s leading information technology research and advisory firm Gartner Inc. (NYSE:IT) estimates $216 billion of IT spending to be shifted to the cloud in 2020 compared with $111 billion in 2016. This shows that companies prefer other firms to take care of their servers, storage and networking gear and are not willing to spend money for construction and maintenance of costly information management technology and infrastructure.
With the adoption of public cloud computing services, it is optimal for clients to spend only for computing, networking and storage, while getting rid of recurring expenditures for updating their own servers and software year after year.
SaaS to Remain the Largest Market Segment in 2020
Among the three major cloud computing services, software-as-a-service (SaaS) will outpace infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) to remain the largest market segment, per Gartner. Across the globe in 2020, SaaS is expected to contribute $116 billion in revenues to public cloud computing service business, surpassing $50 billion and $39.7 billion revenues for IaaS and PaaS, respectively, added the global research and advisory firm.
However, in terms of year-over-year worldwide revenue growth projection by Gartner, IaaS will outpace SaaS and PaaS to record the fastest growth of 24% in 2020. This is because there has been an increasing need for infrastructure at a scale among recent applications, which traditional data centers are unable to fulfil.
4 Cloud Software Stocks to Buy Now
It has become increasingly evident that enterprises are fast-tracking their shift to public cloud service providers from own data centers. This probably led Gartner to forecast that the market for global public cloud service will grow almost 17% to $266.4 billion in 2020.
Given the encouraging projection for cloud-software companies in 2020, it would be wise to buy four promising SaaS stocks. These firms carry a Zacks Rank #2 (Buy). You can see Zacks Investment Research
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