When it comes to investing, the tech industry is seen as a good choice; it’s very much a growth sector, with expansion often swift and in some cases spectacular. Plus as well as the new companies there are the established tech heavyweights, such as Microsoft and Google.
These tech sectors are experiencing growth and are likely to continue to do so in the years ahead, which makes them an excellent choice when it comes to investment.
Internet of Things (IoT)
Simply put, the IoT is the way in which objects and items in both commercial and domestic settings are interconnected. Using technology such as wireless, software, electronics and sensors, objects and devices can remotely communicate with each other.
Mobile technology is an important development in the IoT, it allows us to play games on the go, turn on a kettle at the touch of button while in another room or control the heating via our phone. This concept of controlling the items in your home via an app is a basic example of the IoT in use; rubbish bins warning when they’re full is another.
A more advanced example is the way roads and traffic systems will interact with cars and other vehicles – a key factor in the development and implementation of the driverless car. The IoT is predicted to be a huge growth area; the ‘Wall Street Journal’ has reported it could go from a market worth nearly $657 billion in 2014 to a remarkable $1.7 trillion by 2020.
In terms of who to invest in, big companies holding patents relating to the industry, such as Apple and IBM, are obvious ones. Smaller players are worth investing in, but it takes careful research to find the best ones.
With the huge increase in data generation, data companies equipped for the challenge are growing hugely, with new players entering the arena all the time.
Big Data applies to many sectors such as commercial, healthcare, heavy industrial and public.
Along with market intelligence, Big Data provides the ability to make better informed management decisions, plan for the future, and collate information from machinery and equipment to influence the development and design of its successors.
Investing in Big Data requires some care; many companies experiencing high growth and turnover may not be generating significant profits just yet, as they are possibly investing heavily in their growth. Therefore, careful selection of likely companies and a willingness to be patient in terms of returns is important.
By comparison with IoT and Big Data, the cloud may appear a bit ‘old hat’ but, linked with the explosion of data discussed above, it’s set to grow further and already boasts a solid base of established tech players such as IBM, Cisco and Microsoft. For example, Microsoft has invested $3 billion in its European cloud activities alone.
Data storage hardware is expensive as is the extra room required to house it, so being able to store increasing amounts of data and software on remote servers operated by third parties is an ever more popular option.
Investing in industry heavyweights such as Microsoft, Google, IBM and Cisco is a safe bet. For companies like Microsoft and IBM, the cloud is an increasingly large part of their turnover as their core activities – software and computer hardware respectively – decline.
‘Old’ companies – new tricks
As has been commented on, along with new and relatively young companies entering the developing tech fields are the established tech players such as Google, Microsoft and IBM diversifying their business into fast-developing fields. This makes for a solid way of investing in new tech via established, large companies already dominant in other areas.