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Cloud computing is an exciting, constantly-innovating area of technology with a rich recent history – and lots of opportunities for investors! The core idea is to store and access data over the web, rather than locally (e.g. on computer hard drives), allowing users to access cheaper and easier on-demand computing resources – requiring only an internet connection.
Whilst the original idea behind cloud computing suggested a future where computers around the world would facilitate this kind of network, the reality since the 2000s has been a domination of cloud computing by a handful of tech giants. That picture is slowly changing, however, moving this sphere back into more people’s hands across the globe – and opening up new investment options for those looking to generate a return from this trend.
Below, our team at Bure Valley Group paints a picture of what a “decentralised cloud computing world” could look like in the years ahead. We also outline how this could feature in an investor’s portfolio. We hope you find this content useful. To find out more about our EIS and other investment opportunities, visit our portfolio page here. To enquire regarding our latest projects and funding, you can reach us via:
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Decentralised cloud computing
In 2021, the global market for cloud computing has been heavily dominated by a few well-known brands. Amazon Web Services (AWS) is still the leader with over 32% of global market share, followed by Microsoft (19%) and Google (5%). Others – including Alibaba Cloud – make up the rest. The pace of growth in the cloud computing market is quite staggering. In Q1 of 2021 alone, it reached a market capitalisation of $42bn – up 35%. All market leaders in this space have seen their revenues grow even throughout the COVID-19 pandemic. AWS ended Q1 at $13.5 bn; a notable increase from the $10.33bn achieved in Q1 2020. Microsoft Azure witnessed a 50% rise in revenue growth over the same period, with Google Cloud reporting 46% year-on-year growth.
Whilst tech giants like these have made great strides in advancing cloud computing solutions to consumers across the world, they confine users’ data to huge data centres owned by a select few corporations. This can make data vulnerable to hackers. Moreover if, say, one of Amazon’s data centres goes down, certain users may not be able to access their data. At worst, it could be lost permanently. Decentralised computing, however, seeks to turn this picture around.
In this model, end-to-end encryption is used as standard across the decentralised cloud. Prior to being uploaded,a file is encrypted and is broken apart to be spread across uncorrelated nodes on the network. With you (the user) as the sole owner of the encryption keys, it is unthinkable that your data could be stolen. Another great benefit of decentralised cloud computing is that it is much cheaper. Large data centres require staff, maintenance and other expensive costs that are passed onto the customer. When data is spread across many privately-owned, individual devices (e.g. idle laptop hardware), however, the whole process and structure is much cheaper – resulting in savings for the customer.
Investing in the decentralised cloud
For investors, generating a return from the big tech giants is fairly straightforward. You can buy stocks directly in the likes of AWS directly, or you can invest in a fund (e.g. an S&P 500 tracker) which includes cloud computing businesses. Yet what kind of investment opportunities exist in the decentralised cloud, given that its vision is to spread itself globally across personal devices? Here, there are some very exciting and compelling areas for investors’ attention.
A good place to start is to look for growing, robust businesses which are monetising the vision of decentralised cloud computing. A good example is NexGen Cloud. This dynamic company uses GPUs to provide infrastructure-as-a-service (IaaS) solutions to other businesses, at a cost up to 10x cheaper than larger cloud companies. One of the ways they do this is by utilising the idle processing power of PCs, laptops and devices for data processing, storage and access. Those interested in a vision like this might consider investing in such a company!
Another option is to invest in blockchain technologies which operate on a decentralised cloud computing model. Investing in cryptocurrencies directly, for instance, may or may not achieve this depending on the currency in question. In 2021, Bitcoin is heavily reliant on large data ASIC centres to function. Others like Litecoin, however, presently can be run on GPU-powered devices owned by private individuals – allowing the cryptocurrency to achieve a higher degree of decentralisation. Another option for investors is to invest in exchange-traded funds (ETFs) which invest in shares with specific exposure to blockchain-related companies. For the very keen and knowledgeable, there is also the option to crowdfund a new cryptocurrency through an initial coin offering (ICO)!
Conclusion & invitation
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