Whether you’re reading your email or downloading your favorite TV show, that information needs to be stored somewhere. Find out how to cash in on it! Read the companion article: 3 Top ‘Cloud’ Stocks to Own in 2012.
HUDSON: The forecast for technology is cloudy like cloud computing.
The movement to on-demand software and data storage continues to pick up in a big way. That brings us to tonight`s “Word on the Street” — cloud. James Rogers back with us now, technology editor at TheStreet.com. James, Mr. Editor, nice to see you, congratulations on the new gig.
JAMES ROGERS, TECHNOLOGY EDITOR, THESTREET.COM: Thank you very much.
HUDSON: So tell us how cloud computing is different and how it`s
ROGERS: Well, you know cloud computing has been one of the big
textbook words of recent years and it`s a trend that`s really picking up.
It`s becoming a mainstream technology. What is it? Basically there`s
different forms of cloud. Cloud could be a business that say, accessing servers and storage capacity from a hosting company like Rackspace or it could be a business that`s using specialized software services, someone like salesforce.com where all of these areas are growing.
HUDSON: You mentioned two companies there, but first, EMC. This is
kind of the granddaddy in the space, data storage and hardware. Share prices had a sharp rally in the past six weeks or so. What could fuel it higher?
ROGERS: EMC provides a lot of the core infrastructure that`s needed
for these cloud service providers, could be things as you say like basic storage hardware or virtualization software from EMC is very, very popular, VMWare subsidiary. It`s got a lot of weapons in its arsenal, a lot of other things, data security, disaster recovery, data analytics and I think because of this bigger picture, it`s really in the sweet spot for the cloud. Cloud and demands for cloud services helped push EMC to record quarterly results recently, kind of continuing a consistent run of (ph) results from this firm. I think that EMC is actually one of tech`s best performers. It may not be the sexiest stock out there, but I think that there`s a lot more upside potential for investors here, particularly with the push towards the cloud.
HUDSON: EMC is kind of the soup to nuts, the old school cloud play here, 90 seconds left and I want to get to the other two. Software side, salesforce.com, CRM the ticker symbol. It`s had a heck of a quarter, has already said it`s got a record order on its books in this current quarter.
How can it move higher?
ROGERS: I have salesforce down as one of the big tech rebound stocks
for 2012 and I think it`s really starting to live up to that billing. This is a company that is really one of the first cloud trail blazers, and if you look at its resources, what we`re seeing is that salesforce is actually clinching more and more large enterprise deals, also its social enterprise
strategy seems to be taking off. Now we`re concerned about this company`s
growth potential last year, but I think that maybe we`re seeing a bit overblown. There`s a lot more growth to this firm.
HUDSON: Finally, 30 seconds on Rackspace, RAX the ticker symbol.
This is really seen as the pure play in cloud. And the stock price kind of reflects that as the excitement has picked up in the last several weeks.
ROGERS: This is another company that`s come out strong results and
like a lot of its competitors like AT&T, Rackspace focuses solely on the cloud, really impressive reputation for customer support and also I spoke to some of the executives there recently and they were telling me that they`ve got a lot of new products planned for this year. And also on the financial side of the company, there`s a great price to earnings ratio so I think that there`s a lot of upside to have there.
HUDSON: A little bit of valuation play there in technology. Can you
or do you own any of these stocks, James?
ROGERS: No, none whatsoever.
HUDSON: You can read James` article at the street.com. You can find
a link on our website as well. It`s our guest this evening, James Rogers with the street.com.
ROGERS: Thank you, Tom.