We see several opportunities to continue to play the dynamic changes that are occurring in enterprise software as enterprises adopt the Professional Cloud.
The Professional Cloud requires significant capital expenditures. Therefore, only the largest companies with the greatest cash resources and cash flows can play in the Professional Cloud. Cloud titans like Microsoft (ticker: MSFT), Amazon.com ( AMZN ) and [Alphabet’s] Google ( GOOGL ) are likely to dominate, but strong opportunities should continue for more specialized Professional Cloud providers like Salesforce.com ( CRM ) and ServiceNow ( NOW ).
As a result, software-as-a-service (SaaS) is likely to see further consolidation around a few platform leaders. The consolidation may occur through merger activity, but it is also occurring as companies develop more applications. SaaS leaders like Salesforce.com, HubSpot ( HUBS ), Zendesk ( ZEN ), Workday ( WDAY ) and Veeva Systems ( VEEV ) are all continuing to add functionality, which enables them to consolidate their leadership.
Legacy enterprise vendors should continue to move as quickly as possible to the Professional Cloud. Adobe Systems ( ADBE ) and Autodesk ( ADSK ) continue to provide good examples of companies that are making that transition. Conversely, Oracle ( ORCL ) and SAP ( SAP ) have been more challenged by the transition to the Professional Cloud, and they are lagging their peers.
As result, we continue to recommend Adobe, Autodesk, Salesforce.com, HubSpot, Microsoft, Veeva, Workday and Zendesk. Our best ideas for 2016 include Microsoft in large caps, Autodesk in mid-caps, and HubSpot and Zendesk in small-caps.
Read More: http://www.barrons.com/articles/four-top-picks-for-the-cloud-in-2016-1452195897
The Professional Cloud requires significant capital expenditures. Therefore, only the largest companies with the greatest cash resources and cash flows can play in the Professional Cloud. Cloud titans like Microsoft (ticker: MSFT), Amazon.com ( AMZN ) and [Alphabet’s] Google ( GOOGL ) are likely to dominate, but strong opportunities should continue for more specialized Professional Cloud providers like Salesforce.com ( CRM ) and ServiceNow ( NOW ).
As a result, software-as-a-service (SaaS) is likely to see further consolidation around a few platform leaders. The consolidation may occur through merger activity, but it is also occurring as companies develop more applications. SaaS leaders like Salesforce.com, HubSpot ( HUBS ), Zendesk ( ZEN ), Workday ( WDAY ) and Veeva Systems ( VEEV ) are all continuing to add functionality, which enables them to consolidate their leadership.
Legacy enterprise vendors should continue to move as quickly as possible to the Professional Cloud. Adobe Systems ( ADBE ) and Autodesk ( ADSK ) continue to provide good examples of companies that are making that transition. Conversely, Oracle ( ORCL ) and SAP ( SAP ) have been more challenged by the transition to the Professional Cloud, and they are lagging their peers.
As result, we continue to recommend Adobe, Autodesk, Salesforce.com, HubSpot, Microsoft, Veeva, Workday and Zendesk. Our best ideas for 2016 include Microsoft in large caps, Autodesk in mid-caps, and HubSpot and Zendesk in small-caps.
Read More: http://www.barrons.com/articles/four-top-picks-for-the-cloud-in-2016-1452195897
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