When venture capitalist Marc Andreessen wrote his prescient essay titled “Software Is Eating the World” in 2011, many thought he was overreacting to the information technology boom. Today, software is one of the fastest-growing industries in the world. At the core of this software revolution is Cloud. Companies are swiftly migrating to Cloud platforms to save costs, increase efficiency and accessibility. Interestingly, Andreessen had mention the rise of Cloud computing in his essay.
In 2000, when my partner Ben Horowitz was CEO of the first cloud computing company, Loudcloud, the cost of a customer running a basic Internet application was approximately $150,000 a month. Running that same application today in Amazon’s cloud costs about $1,500 a month.
The pandemic has accelerated the current trends in technology, hastening the adoption of certain innovations. For instance, the work-from-home trend fueled the demand for software-as-a-service (SaaS)-based solutions. Microsoft Teams reported a huge increase in the number of active users, from 44 million active users in March 2020 to 115 million daily users in October 2020.
Investors Pouring Money Into Cloud
Investors are also pouring money into the Cloud computing startups amid huge growth prospects and low risk factors involved. According to CB Insights, the number of deals in the cloud computing space reached 97 during the second quarter of 2020, up from 76 during the same period in 2019. Investors funneled about $3 billion into Cloud startups from April to June 2020.
Companies prefer to use Cloud solutions instead of using legacy hardware or software. However, security has been a major concern for companies that want to move to Cloud platforms. But several startups are racing to solve that problem. For example, Massachusetts-based startup Snyk Inc helps developers detect vulnerabilities in Cloud applications and resolve them. The company has raised over $400 million from investors. Similarly, Cockroach Labs that helps companies manage their data architecture over Cloud, raised over $86 million in Series E in January 2021 and was valued at about $2 billion.
The AI Factor
Cloud computing services have revolutionized everything from contact monitoring to delivery services, telemedicine, and online shopping. The adaptation of technology during the coronavirus outbreak has greatly impacted the cloud computing industry. Cloud computing and AI along with IoT, are the main drivers in improving technology and growth in the Industrial 4.0 period. According to Oracle’s Cloud 2020 report, about 60% of the 1,200 technology decision-makers surveyed in midsize and large companies across EMEA spoke in favor of an integrated solution approach and said that it would unlock the potential of disruptive technologies, such as robotics and artificial intelligence.
Artificial intelligence and machine learning are the key enablers to improve the efficiency and speed of cloud computing services. In return, cloud-based services will fuel important technological innovations including contact tracing as part of pandemic response planning, smart city infrastructure, and the development of autonomous vehicles.
A Growing Industry
According to the in-depth market analysis from Markets and Markets, the global cloud computing industry was valued at $371 billion in 2020 and is expected to reach a market value of $832 billion by 2025 at a compound annual growth rate (CAGR) of 17.5%. In 2019, North America dominated the global cloud computing market with a share of 49% due to the early adoption of cloud computing technologies.
The cloud computing market is dominated and owned by the biggest tech companies in the world such as SAP, IBM, Oracle, Amazon, and Microsoft. These cloud computing giants have a large market share and a strong global reach along with organized distribution networks, which help them increase their revenues. To give you the most accurate ranking, we evaluated and ranked the 15 most valuable cloud computing companies based on their market cap.
Let’s look at the most valuable cloud computing companies starting from number 15.
15. IBM Corp (NYSE: IBM)
Market cap: $107.091 billion
IBM is one of the 15 most valuable Cloud computing companies that offers a hybrid multi-cloud which is a combined platform of Platform-as-a-Service (PaaS) with Infrastructure-as-a-Service. Recently, the tech giant launched a partnership with leading banks and finance companies through IBM Cloud for Financial Services. The company’s partners include Bank of America (NYSE: BAC).
14. Intuit Inc. (NASDAQ: INTU)
Market cap: $113.452 billion
Ranking 14th on the list of 15 most valuable Cloud computing companies is Intuit. Over the last decade, Intuit has evolved from being a desktop-based software company to a cloud-based software-as-a-service (SaaS) platform for small and medium-sized businesses and personal finance users. Intuit offers cloud-based accounting solution QuickBooks, and tax preparation software TurboTax.
Shares of Intuit rallied 40% over the last twelve months.
13. ServiceNow Inc. (NYSE: NOW)
Market cap: $115.952 billion
Ranking 13 on our list of 15 most valuable Cloud computing companies is ServiceNow. It is a cloud-based CRM application that offers IT service management and software solutions. It began as a SaaS company and later ventured into a PaaS cloud model wherein the entire business process of the organization can be controlled by a single record system.
In 2020, ServiceNow acquired an Israeli AIOps (Artificial Intelligence for IT operations) company Loom and Canadian automation and AI company named Element AI. Shares of ServiceNow rallied 71.10% over the last twelve months.
12. SAP SE (NYSE: SAP)
Market cap: $154.82 billion
German tech giant SAP SE is one of the most valuable cloud computing companies that developed the SAP Business Technology Platform. SAP’s cloud computing services include SaaS and Infrastructure-as-a-Service (IaaS) solutions.
Following the acquisition of SuccessFactors, Ariba, and Concur Technologies, SAP had also partnered with IBM to sell cloud-based services in 2014. SAP also collaborated with Hewlett Packard Enterprise Co. (NYSE: HPE) to provide encrypted hybrid offerings until the ERP system SAP S/4HANA was launched in 2016. Shares of SAP rallied 7% in the last three months.
11. Accenture Plc (NYSE: ACN)
Market cap: $168.12 billion
Accenture is widely-known as one of the biggest outsourcing companies in the world yet. It also ranks 11th on our list of the 15 most valuable cloud computing companies in the world. Accenture offers a wide array of cloud computing services from on-premise migration to cloud management. In 2019, the company reported a revenue of approximately $11 billion in the cloud sector alone. In 2020, Accenture announced a $3 billion investment to Accenture Cloud First that will be used to develop cloud AI data and cloud computing technologies.
Shares of ACN rallied 24.43% over the past twelve months.
10. Oracle Corporation (NYSE: ORCL)
Market cap: $179.97 billion
Oracle is a database giant and Cloud services provider that develops and supplies business applications and software to global enterprises. Oracle Cloud Infrastructure (OCI) is an IaaS platform that delivers on-site, high-performance computing capacity to operate cloud-native and enterprise IT workloads.
This year, Oracle launched the Roving Edge Infrastructure which is designed to deliver hybrid cloud services especially in the most remote areas in the world. Shares of ORCL rallied 16.11% over the past twelve months.
9. Cisco Systems Inc. (NASDAQ: CSCO)
Market cap: $192.85 billion
Cisco develops and manufactures IP-based network devices and security applications and offers cloud services. Cisco provides cloud computing services from analytics to security, streaming private networks into public clouds, IoT, data center, and cloud applications. Cisco also offers Cloud apps for the healthcare industry. For instance, Cisco offers the WebEx app for online medical consultation and treatment.
8. Salesforce.com (NYSE: CRM)
Market cap: $226.28 billion
Salesforce.com is a cloud-based provider of enterprise software centered on customer relationship management (CRM). Its cloud services include Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, Community Cloud, Analytics Cloud, Salesforce Quip, and Salesforce Platform.
Salesforce announced in 2020 that it would acquire workplace messaging company Slack Technologies (NYSE: WORK) for a $27.7 billion cash and stock deal. Shares of CRM rallied 34% over the past twelve months.
Pixabay/Public Domain
7. Adobe Inc. (NASDAQ: ADBE)
Market cap: $229.35 billion
Adobe is one of the most valuable cloud computing companies that develops and offers creative software products. The Adobe Creative Cloud is the digital creation gold standard that offers digital creation content products (Photoshop, Illustrator, After Effects, Premiere Pro) and cloud storage which are sold as a monthly subscription.
Shares of ADBE rallied 34.05% over the past twelve months.
Copyright: photogearch / 123RF Stock Photo
6. Intel Corporation (NASDAQ: INTC)
Market cap: $251.134
Intel’s chips and data center technologies power the Cloud computing services for major companies. It also plays a key role with its “Edge” Cloud technology, which delivers real-time and cost-effective cloud computing storage and security. In 2019, Intel announced a partnership with Google to help enterprise customers easily deploy applications across Cloud environments. Intel also has Cloud partnerships with Amazon and Microsoft.
5. Alibaba Group Holding Ltd. (NYSE: BABA)
Market cap: $713.18 billion
The e-commerce giant Alibaba Group is also included in the 15 most valuable cloud computing companies. Alibaba Cloud offers an array of cloud computing services including database, storage, networking, security, analytics, artificial intelligence, and hybrid cloud. Alibaba Cloud also provides a one-stop IoT management platform for enterprises. Earlier in February, Alibaba said its Cloud revenue jumped 50% in the most recent quarter to reach $2.47 billion
In 2019, Alibaba and Salesforce announced a strategic partnership wherein Alibaba became an exclusive provider of Salesforce software and services in Asian markets such as China, Taiwan, Macau, and Hong Kong. Shares of BABA rallied 23% over the past twelve months.
Pixabay/Public Domain
4. Tencent Holdings Limited (OTCMKTS: TCEHY)
Market cap: $909.29 billion
The largest internet company in China, Tencent Holdings offers high-performance cloud computing services through Tencent Cloud. Tencent Cloud provides low-cost yet accessible cloud computing, storage, database, and security to global business enterprises.
Tencent Cloud achieved a reputable name in the gaming industry as it offers top-class cloud infrastructure and an optimal gaming ecosystem trusted by leading gaming companies such as Garena, Supercell, Shiro Games, and PUBG Mobile.
Claudio Divizia/Shutterstock.com
3. Alphabet Inc (NASDAQ: GOOG)
Market cap: $1.41 trillion
Alphabet has one of the fastest-growing Cloud divisions in the world, trailing only Amazon and Microsoft. Alphabet is investing heavily into its Cloud division to beat Amazon and Microsoft, which is resulting in operating losses. In the fourth quarter of 2020, the company’s Cloud revenue jumped a whopping 47% on a year-over-year basis to $3.84 billion. Google Cloud posted operating losses of $1.24 billion in the fourth quarter, more than the $1.19 billion loss posted in the same period a year ago. Google is ramping up its efforts to dominate the Cloud industry. In 2018, it appointed former Oracle executive Thomas Kurian to spearhead the growth efforts.
Some of the biggest companies in the world are using Google Cloud’s services, including Paypal Holdings Inc (NASDAQ: PYPL), The Home Depot (NYSE: HD) and Etsy Inc. (NASDAQ: ETSY).
Pixabay/Public Domain
2. Amazon.com Inc (NASDAQ: AMZN)
Market cap: $1.64 trillion
Amazon is the second most valuable cloud computing company with a market cap of $1.64 trillion. However, in terms of market share, it is the biggest Cloud company in the world. Amazon’s Cloud business, AWS, has over 34% of the total public Cloud market. In the fourth quarter, AWS revenue jumped 28% and reached $12.7 billion, up from from $9.95 billion a year earlier. AWS accounted for about 10% of the total sales of Amazon.
AWS’s biggest clients are Netflix (NASDAQ: NFLX), Baidu (NASDAQ: BIDU), Facebook (NASDAQ: FB), and ESPN. According to a CNBC report, Apple (NASDAQ: AAPL) spends over $30 million per month on AWS cloud computing services.
1. Microsoft Corporation (NASDAQ: MSFT)
Market cap: $1.82 trillion
Topping the list of the most valuable cloud computing companies is Microsoft Azure. Azure offers a wide range of services, including service platform (PaaS), service infrastructure (IaaS), and managed database service capabilities. In 2020, Microsoft’s Cloud revenue jumped 31% to reach $59.5 billion, beating AWS growth levels. Recently, Microsoft revealed Azure Quantum to the public. Azure Quantum is a cloud-based platform that utilizes quantum hardware and software tools from partners such as Honeywell Quantum Solutions, IonQ and 1QBit.
The biggest companies that spend the most budget on cloud computing services by Azure are Verizon (NYSE: VZ), Lumen Technologies (NYSE: LUMN) and News Corp (NASDAQ: NWS). Shares of MSFT gained close to 40% over the past twelve months.
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This article is originally published at Insider Monkey.
