The massive selloff in cloud companies should be no surprise. For the most part, the past few years saw a huge bull move. So a correction was inevitable — perhaps even healthy.
Given this, might now be a good time to take a look at some of the names being affected? I think so. Keep in mind that top-notch cloud companies should continue to benefit from the secular trend away from traditional on-premise software. According to IHS, enterprise spending on cloud computing software will surge from $78 billion in 2011 to a whopping $235 billion by 2017.
However, investors should still be cautious. Let’s face it, there are a variety of cloud companies that could be vulnerable to disruption, such as the ad tech space. Competition is intense, with mega players like Apple (AAPL) and Google (GOOG) putting enormous pressure on competitors. Oh, and Facebook (FB) and Twitter (TWTR) have recently launched their own offerings. (I noted the impact of all this in a post on Millennial Media (MM), which has imploded.)
OK, so what are some of the cloud companies that look attractive and have good long-term prospects? Well, here’s a look: