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Cloud computing is an exciting, growing sector with many exciting opportunities for investors around the world. Global market capitalisation is expected to reach $368.97bn in 2021 – up from $274.79bn in 2020, and suggesting a CAGR of 19.1% from 2021 to 2028. However, it is also a realm where many confusing, technical terms and jargon pervade and can feel overwhelming to investors. In this short guide, therefore, our investment team here at Bure Valley Group offers this overview of common cloud computing terms – specifically for our investor audience.
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Artificial intelligence (AI)
Many of us might imagine dystopian visions from movies like The Terminator when we hear this term. Yet, at its core, AI is about problem-solving. Using advanced programming, a computer system emulates many of the reasoning processes that a human being uses to make decisions on his/her behalf – only faster, and possibly more efficiently. Here, the more advanced the AI is, the more problems it can potentially solve; including those faced by customers. This allows AI to be put to promising commercial use by companies with innovative business models.
Cloud
What does it mean when we say something is stored “on the cloud?” Imagine you are working on a Word document using your laptop, and you save the file. Where is it saved? Traditionally, it would be saved on your local harddrive. However, what if you could save the file on multiple other computers in other locations for extra security – if one computer breaks, you have backups – and to free-up space on your own computer? This is what the cloud essentially does. You save it on another computer (or server) provided by a company like Amazon Web Services (AWS) or Google. To access the file again, all you need is an internet connection to retrieve it.
Content Delivery Network (CDN)
When you visit a website, where do you think that website “lives”? It does not simply float in the air somewhere. Rather, its files are stored – or hosted – on a range of computers (servers) which offer the files to someone who requests them when they visit the website on their browser. Yet where are these computers located? If you are in the UK but the computers are in Australia, for instance, then it likely will take longer to retrieve the files than if the website was hosted in the UK. This is what a CDN attempts to address. It essentially stores “copies” of the website on lots of computers in different parts of the world. When someone visits the website, the closest CDN to them (geographically) serves up the files to provide a faster service.
IaaS
Infrastructure as a service (IaaS) is a special type of cloud computing. Rather than focusing on storing files you create, however, IaaS is more focused on providing resources to you over the internet – rather than relying on your own computer’s computing power. For instance, suppose you are a startup with limited resources of your own to store and process customer data. By relying on those of an IaaS provider, this allows you to get up and running quickly without large infrastructure cost spending.
Machine learning
Again, sometimes this term can conjure disturbing thoughts about a sinister computer learning about humans and how to eventually exploit them. Yet “machine learning” simply refers, again, to a type of problem-solving employed by computers. As they gather more information (e.g. on customer behaviour with certain products) over time, the more they can use this to make more effective decisions on a company’s behalf to improve results. Companies offering such machine learning solutions, therefore, have the potential to radically transform multiple sectors.
Private/public cloud
When you are writing a document on your laptop and saving on your harddrive, you are likely the only person who can open your computer and then access it again. However, what if you wanted to store it somewhere so another person could open and amend it easily? By using a private cloud network, you could store the file just like this – allowing your team to access it, but not anyone else who lacks access to the network. A public network uses the same approach except accessibility is open to the wider public (e.g. a Google Sheets file which you want your website visitors to be able to read and use for themselves).
User experience (UX)
When you visit a website or use an app like Google Docs, how do you find the experience? Is it quick, enjoyable and easy to follow/understand? If this happens when using a cloud-based app or service, then you likely have a good user experience. If not, then the provider will likely need to do some urgent upgrades to retain and grow users/customers!
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