The cloud computing market continues to gain traction as more businesses and organizations are opting for cloud services and cloud solutions.
On October 20, global bank UBS and Microsoft Corporation announced an expansion of their partnership to accelerate UBS’s public cloud footprint over the next five years. With this expansion, UBS plans to have over 50% of its applications and critical workloads running on Microsoft Azure, solidifying Microsoft as the bank’s primary cloud services provider.
In 2018, UBS outlined its cloud strategy and partnered with Microsoft with plans to bring one-third of its application to public cloud within four years. This target was achieved in February 2021.1
Recently, Microsoft reported that its Azure cloud business had increased by 35% in the quarter ending in September. Adjusted for currency, the cloud business grew 42%.
Microsoft isn’t the only cloud services company reporting growth. Last month, Amazon.com, Inc. reported that its cloud computing business, Amazon Web Services (AWS), had grown by 27% for the quarter ending in September.
Amazon’s Chief Financial Officer, Brian Olsavsky said that due to current macroeconomic pressures, customers are focusing on controlling cloud-related costs and the company is working to help customers optimize those costs. Similar comments were made by Microsoft, as well.2
Oracle Corp. is a leading cloud services provider. Recently, the company announced that it has been getting a lot of traction and is seeing growth rates the company hasn’t witnessed in over a decade.
The company grew eight percent organically in the quarter ending in August and it expected to grow double digits organically in the near future.
Regarding the fear of economic slowdown, the company is being vigilant and careful about expenses. However, if there was a slowdown, the company would likely see it.3
Nutanix was recently named as a Visionary at the Gartner October 2022 Magic Quadrant for Distributed File Systems and Objects Storage. This was the second consecutive year that Nutanix has been recognized with this title.
At its core, Nutanix believes that new applications provide a competitive advantage to customers who don’t have time to plan, manage, and secure separate block, file, and object platforms. The recognition by Gartner suggest that the company’s products are consistent, challenge storage norms, and help high-capacity storage users.4
Investing in the Cloud with Evolve ETFs
Cloud Computing is transforming the global economy. Over the past decade, the cloud has fundamentally changed the way businesses and individuals access data. From physical servers to portable drives, the cloud has helped eliminate the need to store information on-premise. If you’re interested in investing in cloud, consider a cloud computing ETF.
Evolve Cloud Computing Index Fund (DATA ETF), Canada’s first cloud computing ETF, invests primarily in equity securities of companies located domestically or internationally that have business operations in the field of cloud computing. To learn more about DATA ETF, visit the fund page here: https://evolveetfs.com/data/
DATA ETF PORTFOLIO STRATEGY AND ACTIVITY
For the month, Oracle Corp. made the largest contribution to the Fund, followed by SAP SE and Salesforce Inc. The largest detractors to performance for the month were Datadog Inc., followed by Snowflake Inc. and Amazon.Com Inc. On last rebalance, these securities were added to the portfolio: Dropbox Inc., Fortinet Inc, and Nutanix Inc. By weight, the Fund’s largest geographic exposure was to the United States, followed by Germany and Israel.
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- “UBS and Microsoft announce landmark expansion of cloud partnership,” Microsoft Corporation, October 20, 2022; https://news.microsoft.com/2022/10/20/ubs-and-microsoft-announce-landmark-expansion-of-cloud-partnership/.
- Savitz, E.J., “Cloud Stocks Fall After Earnings Results From Amazon, Microsoft,” Barron’s, October 28, 2022; https://www.barrons.com/articles/snowflake-stock-price-amazon-microsoft-51666985106?noredirect=y.
- Savitz, E.J., “Oracle’s Stock Looks Cheap Again. ‘We’ve Got a Plan,’ CEO Says,” Barron’s, October 17, 2022; https://www.barrons.com/articles/oracle-stock-price-buy-safra-catz-51665779058?noredirect=y.
- “Nutanix is Named a Visionary in the 2022 Gartner® Magic Quadrant™ for Distributed File Systems and Objects Storage for the Second Year,” Yahoo! Finance, October 28, 2022; https://finance.yahoo.com/news/nutanix-named-visionary-2022-gartner-150000659.html.