Whether it’s infrastructure as a service (IaaS) or software as a service (SaaS), cloud computing market trends are compelling, signaling strong long-term potential for exchange traded funds like the WisdomTree Cloud Computing ETF (WCLD). Even with this year’s stellar performances.
The WisdomTree Cloud Computing Fund seeks to track the price and yield performance, before fees and expenses, of the BVP Nasdaq Emerging Cloud Index, an equally weighted index designed to measure the performance of emerging public companies focused on delivering cloud-based software to customers.
Data confirm the coronavirus pandemic is having profound implications on the global cloud market.
“The global public cloud services market is projected to grow by 6.3% in 2020. That would see the sector go up from a value of $242.7 billion in 2019 to $257.9 billion in 2020,” according to Stock Apps.
Increasing Cloud Migrations
While private and public businesses have made the pivot to a greater reliance on cloud computing amid the Covid-19 pandemic, government organizations have followed in tow. As such, more adoption by local and federal governments could spur cloud computing ETFs, such as WCLD.
“With enterprises seeking to support remote work, Desktop as a Service (DaaS) is projected to post the highest growth. It will grow by a massive 95.4% YoY to reach $1.2 billion from $616 million. Among the reasons for its remarkable growth is the fact that DaaS is cost-effective and offers secure access to enterprise applications from multiple locations and devices. In 2021, it is anticipated to reach $1.95 billion and in 2022, $2.5 billion,” notes StockApps. “Software as a Service (SaaS) will retain its position as the largest segment, growing to $104.7 billion in 2020 from $120.1 billion in 2019.”
Cloud computing represents a significant source of disruption, not only in the technology sector, but in the investment world at-large. It has become ingrained in nearly every aspect of our lives by fundamentally altering how we consume, process, and share information in the digital age. The trend toward cloud-based solutions offers a compelling, long-term opportunity for investors to gain exposure to a quickly developing segment of the technology sector.
“Comparatively, the second largest segment, Infrastructure as a Service (IaaS) will be worth $50.4 billion in 2020. It will grow by 13.4% from a value of $44.5 billion in 2019,” according to StockApps. “For SaaS, subsequent years will see more significant growth as it is projected to grow to $120.99 billion in 2021 and $140.6 billion in 2022. IaaS is estimated to reach $64.3 billion in 2021 and in 2022, $80.98 billion.”
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.