Anthony Ginsberg, Co-Creator of HAN-GINs Cloud Technology UCITS ETF (SKYY), a cloud computing-focused ETF, expects growth in the sector to accelerate and is predicting more M&A corporate activity in the cloud space, particularly amongst cloud security firms.
Ginsberg says: “Due to Covid-19, cloud technology is increasingly embedded into mainstream work-life activities – from digital entertainment/streaming services to video conferencing, social media and remote learning. We expect global cloud spending to hit a new all-time high for the third quarter – as cloud spending globally continues to gain momentum. As Work From Home (WFH) behaviours become ingrained amongst tech savvy workers – pre Pandemic work rules are unlikely to revert. Cloud now drives the Internet of Things, from Social Media and Digital Entertainment to Healthcare Innovation (trackers and telemedicine), Future Cars, Cyber Security and AI-Robotics. Many of the larger Cloud players are vertically integrated – offering a variety of cloud services form software to infrastructure and security too.
“While the US is the most built-out across Cloud, Europe and developing nations are where much of the future growth is expected. Larger cloud players currently have a distinct advantage over smaller Cloud players given their existing global reach. Many cloud themed ETFs focus on US companies but SKYY has global holdings.
“Given the flexibility cloud subscription services affords users and the significant cost savings – versus maintaining onsite hardware – IT budgets are increasingly shifting away from hardware to Cloud. We also expect global cloud spending to hit a new all-time high for the third quarter – as cloud spending globally continues to gain momentum.”
“The large Cloud Infrastructure players will be unable to make huge ground-breaking deals due to the US Election and anti-trust concerns. We expect smaller add-on acquisitions by the Megacap players whose record share prices provide them with a relatively low-cost, cheap currency.”