Bure Valley Group is an investment introducer platform which links successful investors with exciting, innovative UK startups seeking funding. This content is for information purposes only and should not be taken as financial or investment advice.
Broadly speaking, cloud computing refers to storing, accessing and sharing data over the web without even using your PC’s local hard drive. The power of this technology is transformative, effectively allowing businesses to set up a “virtual office” without requiring official premises. Yet the benefits of cloud computing are far-reaching and ever-evolving, thus offering opportunities for investors to generate returns from exciting new companies driving innovation.
So, what are the benefits of cloud computing and what kinds of investor opportunities are there? Below, our investment team at Bure Valley Group offers some answers to these questions. Find out more about our EIS and other investment opportunities by visiting our portfolio page here. To enquire regarding our latest projects and funding, you can reach us via:
+44 160 334 0827
#1 Saving on cost
Imagine the amount of hardware and physical storage space a company might need to cover its data needs on its own (e.g. an Ecommerce business with 100,000s of customers and 1,000s of orders). Think, also, of the personnel and inspections that would be needed to maintain all of it, keeping everything safe and in good working order. With cloud computing, however, all of the purchasing and management of the required hardware is done by the cloud service provider – significantly reducing the business’s overheads and liabilities.
To take the aforementioned example again (where a business covers its own data needs), what kind of damage might be done if there was a huge fire, sabotage or burglary? With everything in one central location, the harm to the business could be irreparable. Yet with cloud computing, all of the data is stored across multiple servers and data centres in various other locations. Should any of these servers “go down” or experience a problem, there will almost certainly be a data “backup” elsewhere – reducing the business’s risk.
#3 Competitive edge
Cloud computing is always evolving, allowing for expansion of data storage capacity and new applications. The cloud provider does this in the background, allowing the customer (e.g. the business using the service) to carry on with their everyday work and enjoy the new features and benefits. If your competitor(s) is relying on their own local storage networks, however, then they will almost certainly lag behind as they spend time and money on upgrades and installations.
Since March 2020, the COVID-19 social restrictions will have likely put a strain on businesses which rely on local computing power for their infrastructure and applications. However, those relying on cloud computing will have found the transition to remote working much easier – since these can be accessed anywhere using an internet connection.
If your business relies on a local data storage solution, what happens if your business expands or contracts in a short space of time? Your data storage infrastructure may need to be hugely scaled up or back, to meet customer demand or mitigate unnecessary costs, respectively. With a cloud computing solution, however, your business can adjust its subscription with the service provider quickly according to your needs – without incurring large infrastructure costs.
Many business functions require sharing data and communicating with other organisations and partners (e.g. contractors). Marketing is a good example. Suppose all of your digital marketing applications were built by your team, and stored/maintained internally. If you later needed to outsource some of your marketing – e.g. to an agency – it would be difficult to share the relevant data and systems with them, since they have not built the same data infrastructure as you. With a cloud computing solution, however, it is far easier to collaborate with outside organisations.
Of course, investors could generate returns via direct investment in cloud computing stocks like Microsoft, Amazon (AWS) and Google – e.g. buying and selling them later at a profit. Yet there are many other opportunities for investors in the world of cloud computing:
- Investing SaaS companies. Software as a service (SaaS) encompasses a wide range of large established business startups. There is, of course, the stock of famous companies like Netflix, Slack and Zoom which could offer exciting growth prospects. Yet exciting new companies are emerging all of the time in this space, where angel investors may be particularly interested (or those with an Innovative Finance ISA!). One example would be Atlas Cloud, a Newcastle-based IT solutions startup which secured a €2.1m investment from VCTs in 2020.
- Cloud computing ETFs. For investors less inclined to invest directly in cloud computing stocks, exchange-traded funds such as the First Trust ISE Cloud-Computing Index Fund specialise in the sector and offer some promising investment opportunities.
Conclusion & invitation
Cloud computing is an exciting, growing sector with impressive market capitalisation – $236bn in 2020 – and promising prospects in future years, even with the challenges posed by COVID-19.
Interested in finding out more about the exciting startup projects we have on offer to investors here at Bure Valley Group? Get in touch today to start a conversation with our team and discuss some of the great investment memorandums we have available here:
+44 160 334 0827