As more and more companies add cloud computing as a core component of their existing business models, the movement to the cloud doesn’t preclude public companies. Last week, Microsoft signed a $10 billion deal with the Pentagon as part of their Joint Enterprise Defense Infrastructure Cloud, which underscores the importance of cloud computing.

It’s been a battle of tech heavyweights as they vie for cloud computing dominance, especially between Amazon and Microsoft. Per a Reuters report, “Amazon’s Amazon Web Services currently holds about 32% of the cloud computing market, while Microsoft’s Azure has about 18%, according to research firm Canalys.”

The decision for the Pentagon to choose Microsoft didn’t go down easy for Amazon who is expected to challenge the decision.

“We expect a degree of handwringing among Congressional Democrats given the political and practical dimensions of this issue, but our sense is that lawmakers are unlikely to wade too deeply into these waters,” Compass Point’s Marshall Senk said.

“Bottom line, the contract is a significant win for Microsoft and vaults Azure forward in the cloud platform wars,” J.P. Morgan analyst Mark Murphy said.

It’s also a win-win for ETF investors in cloud computing funds where more adoption of the technology could spur further gains.

he impact of cloud computing can be felt as more companies are utilizing the technology at a rapid pace to power their core businesses. That’s why Global X ETFs, the New York-based provider of exchange-traded funds, recently launched the Global X Cloud Computing ETF (Nasdaq: CLOU).

Seeking to track the Indxx Global Cloud Computing Index, the fund holds a basket of companies that potentially stand to benefit from continuing proliferation of cloud computing technology and services. The cloud computing industry refers to companies that (i) license and deliver software over the internet on a subscription basis (SaaS), (ii) provide a platform for creating software applications which are delivered over the internet (PaaS), (iii) provide virtualized computing infrastructure over the internet (IaaS), (iv) own and manage facilities customers use to store data and servers, including data center Real Estate Investment Trusts (REITs), and/or (v) manufacture or distribute infrastructure and/or hardware components used in cloud and edge computing activities.

The increasingly digital and connected world that form the backdrop for CLOU’s launch is exhibiting significant growth, and is expected to continue to grow over the coming years. The cloud computing industry that was estimated to be worth $188 billion in 2018 is expected to be worth over $300 billion by 2022, a nearly 15% annualized growth rate.

For more market trends, visit ETF Trends.

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