One of the early investors in the cloud space is Emergence Capital.
“Ten years ago when we started our firm, we believed that the Internet would change everything in the way businesses use technology,” Emergence partner Kevin Spain said. As a result, Emergence invested in breakout companies like Salesforce.com (NYSE:CRM), SuccessFactors, Yammer and Box.
“There are things you can do in the cloud that are not possible with the traditional client-server approach,” Spain said. “For example, you can do things like collaboration. In fact, a company like LinkedIn (NYSE:LNKD) could only be possible with the cloud.”
While Spain remains bullish on the industry, he still recognizes that some sectors are tougher to crack than others. One is enterprise resource planning, especially when it comes to bringing Global 2000 companies onboard. Oracle (NASDAQ:ORCL) and SAP (NYSE:SAP) still have a hammerlock on the market, and various government sectors like intelligence and defense have been tough to sell into.
Despite this, the market potential is still enormous — and there should be numerous opportunities for investors. Spain discusses this more at length, expounding upon M&A and public offerings for cloud companies, in the video interview below.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.