He follows the lead of numerous other technology multi-billionaires who have purchased important publications in the last few years, including Jeff Bezos, who bought the Washington Post, and Laurene Powell Jobs, wife of Steve Jobs, who purchased The Atlantic magazine.

Salesforce is one of the most successful technology companies in the U.S., and the largest employer in San Francisco, with annual revenue of $11 billion, and a market cap of $118 billion.

Salesforce successfully commercialized a cloud computing service called Software as a Service, or SaaS, for its primary product offering, which helps businesses manage sales cycles with their customers.

More about Benioff and Salesforce

Benioff, a San Francisco native, reportedly conceived the idea for Salesforce while floating off the Big Island in Hawaii more than 20 years ago. He launched his company from his apartment in 1999.

He was something of a child genius, designing apps from an early age, and launching a programming business as a teenager that earned him $1,500 a month—reportedly enough to pay for his own tuition by the time he went to the University of Southern California. He briefly wrote code for Apple in the 1980s before becoming one of the youngest vice presidents at Oracle, where he focused on sales and strategy.

Salesforce and the cloud

Salesforce was an early pioneer of using SaaS for commercial enterprises. SaaS is one way that consumers and businesses use the cloud, accessing software from distant servers via the Internet.

Want to learn more about the cloud computing industry? Read here.

Salesforce is active in an industry called customer relationship management, or CRM. It’s an industry, largely developed by Salesforce, devoted to using data to manage relationships with current and potential customers.

Rather than sell CDs with the company’s software, or otherwise installing its software on customer networks, Salesforce gives its customers access to Salesforce’s products from the company’s own network, on a subscription basis.

In so doing, Salesforce has lowered the costs of its software product, enabling customers to tap into the most recent version of the software, without having to license the product themselves and monitor for the latest updates.

More about the cloud

The cloud computing industry has three different components. In addition to SaaS, there is Infrastructure as a Service, which allows businesses to host their offerings on servers in the cloud; and Platform as a Service, which enables customers to run multiple software applications from a distant computer network.

Salesforce competes directly with Oracle, SAP, and Microsoft, which have similar CRM products.

Some other large cloud computing companies include:

• Amazon (Amazon Web Services)
• Microsoft (Azure)
• Google (Google Cloud Platform)
• Oracle
• SAP
• IBM

Amazon and Google provide cloud infrastructure services. That means they host the servers that store information for other companies that use the cloud to deliver services. Salesforce, for example, uses Amazon Web Services for its offering.

Tech titans that own publications

• Time magazine was one of the most famous magazines in the print news world in the 20th century, owned by Time Inc. Founded nearly 100 years ago as a news journal tackling some of the toughest stories of the times, the magazine has since fallen on hard times as its readership has shrunk and advertising for print media has dried up. In 2017, Time Inc. sold itself to Meredith Corp. for $2 billion.
• Jeff Bezos purchased the Washington Post for $250 million in 2013.
• Laurene Powell Jobs, the widow of Steve Jobs, purchased a controlling stake in the Atlantic magazine in 2017 for an undisclosed sum.
• Marc Benioff has an estimated personal fortune of $6.7 billion.

The post Why is the King of the Cloud Buying Time? appeared first on Stash Learn.

These days, Wu-Tang Clan could alter the lyrics to say the “cloud rules everything around me,” and probably make just as much sense.

What is the cloud?

The cloud lets you save your homework without a USB thumb drive, to binge-watch “Ozark” on Netflix, and even allows President Trump to fire off his famous early morning tweets.

But what is it? Despite calling it the cloud, it’s not actually a wall of cumulus clouds in the sky.

Cloud computing is a method of storing, accessing, and syncing data and software through the internet, rather than on the hard drive of a local computer. So, the “cloud” refers to a global network of computers, or servers, that store information, and that we access remotely from devices such as laptops, desktop computers, and smartphones.

For example, if you want to watch a movie on-demand through Netflix, you’re using the cloud to access it—the movie isn’t stored in or on your TV or laptop. You have to request it from Netflix’s servers to watch it. Similarly, every time you log in to a free email service such as Google or Yahoo, you’re accessing it in the cloud.

How the cloud is used

With cloud services becoming more universal, increasing numbers of businesses and industries are jumping on board. Companies that previously lacked IT resources can now purchase them affordably, and can even test and market new products and services without hiring armies of software developers and engineers, or by purchasing huge numbers of new servers themselves.

They can do this either through the public or private cloud. The public cloud is network space any business or individual can use from a cloud provider. A private cloud is a dedicated space that companies can purchase from providers, for their own exclusive use.

In addition to using the cloud to stream on-demand TV and movies, we use it to log into our social media networks, and see what’s happening with our friends and families. Many people also use it for work, by creating, saving, and sharing documents through Google Docs, for example, or storing a customer’s information in a Salesforce database.

The cloud is at work all around us, and in ways most people never actually see. Cloud computing has allowed us to become untethered, thanks to ubiquitous wireless internet networks, small devices like smartphones and tablets, and a smattering of digital products and services.

The cloud computing industry is typically broken down into sub-industries, including:

• Infrastructure-as-a-service (IaaS), which is the hosting of server networks (example: Amazon Web Services)
• Software-as-a-service (SaaS), offering software over the web (example: Salesforce)
• Platform-as-a-service (PaaS), creating a platform available over the web (example: Facebook)

All of these services are expected to continue growing in coming years, and become increasingly profitable for the companies working in the industry, according to industry data:

We can now work, shop, order meals, send messages to our friends, schedule a yoga class, and listen to music on Spotify, and even play video games all because of the cloud.

Cloud computing’s biggest players

The idea of cloud computing may seem new, but it’s actually been around for some time. In the 1950s, computer scientists first developed the technology, which predated the modern internet.

The cloud didn’t develop into a commercial enterprise until the early 2000s when cloud computing company Salesforce became the first major cloud-based company, and also the first to market it as an advantage.

Other companies followed suit, and today, many products and services that we use every day are available only through the internet.

Some of the biggest and most important companies in the cloud computing industry include:

• Amazon (Amazon Web Services)
• Microsoft (Azure)
• Google (Google Cloud Platform)
• Oracle
• SAP
• IBM

And in terms of cloud infrastructure services—that is, the companies that actually host the servers that store information that we all request from our devices—just five companies including Amazon and Microsoft have cornered the market, according to industry data.

And as the cloud becomes bigger and consumers rely on it more, the potential profits for cloud computing companies continues to grow, too.

Companies providing cloud infrastructure services like Amazon and IBM make money by selling server space and computing power to other companies that use it to provide a product or service, such as Netflix, cloud storage company Dropbox, or social media networks Twitter and Facebook.

Cloudy, with a chance of…

The future of the cloud computing industry actually seems pretty sunny.

In 2018, the worldwide public cloud services market is expected to grow more than 21% from 2017 to become a roughly $186 billion market, according to the business consultancy Gartner. And by 2020, the market for cloud services could increase to $411 billion.

But while cloud computing seems set for growth, for those looking to invest in the industry, there are still reasons for caution.

Security is one factor. As the volume of personal details about consumers continues to flood online, the industry has experienced multiple large-scale data breaches over the past few years. One of the most infamous was the 2014 iCloud hacking scandal, in which numerous celebrities’ Apple accounts were accessed and their personal photos were stolen and leaked.

Consumer confidence is another potential hurdle. For example, more than two-thirds of U.S. consumers are afraid companies aren’t doing enough to protect their personal data in the cloud, according to survey data.

And there’s also the possibility that governments could introduce new regulatory standards, particularly when it comes to companies using the cloud to conduct financial services, which could create roadblocks for the industry.

Despite these issues, the future of the industry seems anything but cloudy.

You can invest in companies working with and in the cloud computing industry on Stash.

The post Cloud Computing Runs the World appeared first on Stash Learn.

The company hopes to raise $648 million from its stock offering, according to reports. The offering will take place in the next few weeks.

When a company has an IPO, it sells shares to the public through a stock exchange such as the Nasdaq or the New York Stock Exchange (NYSE). It has an IPO typically to raise cash to fund operations, to build new stories or factories, or to conduct research and development, among other things.

But why is Dropbox selling shares to the public now?

What’s an exit?

Venture capitalists and other investors put money into a company not only because they believe in its vision and want to help it grow and become successful, but because they hope some day to make a profit from their investment, just like any other investor.

One way they do that is through something called an exit. An exit occurs when an investor, or set of investors, sells its ownership in a company, with the goal of making a profit. One way investors achieve an exit is through an IPO, which lets them sell their shares to the public.

What’s a “unicorn?”

All along, the company has a value. And as investors put more and more money into a company, its value typically keeps growing.

In the tech world, private companies that have reached a valuation of $1 billion or more are called unicorns. That’s a big milestone for any company to reach. There are about 200 of these today.

Dropbox was founded in 2007 by Drew Houston, and since that time, it’s received more than $1 billion in funding from outside investors, in various rounds.

In Dropbox’s case, it has a valuation of about $7.1 billion, according to recent reports. That puts it in the company of other unicorns such as Uber, which has a valuation of $68 billion, and Airbnb, which has a valuation of $30 billion.

Angels and investors

Typically, the first money a company receives is called an angel round, from wealthy individuals known as angels who put a small amount of money into the earliest stages of a company. From there, a company will often graduate to venture capital money, which is more formal financing from a partnership that organizes a fund.

Many of the most prominent venture capital companies are in Silicon Valley, where some of the fastest-growing tech companies in the U.S. are. But a number of important VCs also exist in Silicon Alley in New York.

The venture financing rounds are usually given letter names to indicate when they happen. So the first round will be called an A round. The second will be called a B round, and so on down the line. Typically, the rounds get larger as they advance.

Over the past few years, financial experts have talked about the increasing length of time it has taken unicorns to go public. These companies have received big valuations and pots of money, but often wait ten years or longer to go public, which is more than double the time it took companies to go public in 1999.

Amazon, for example,went public in 1997, just three years after its founding in 1994.

One important reason for the change, according to consultancy McKinsey & Company, is that promising young tech companies have more private capital available to them now than they did in the past.

Pricing shares

Before a company goes public, it has to set the value of its shares. It does this based on previous valuations the company has received, but also following a process called the “road show.”

The road show is when the investment bank in charge of the offering goes out to big investors to assess their interest in the stock. The price is usually determined following the roadshow, when the investment bank has a better sense how much people are willing to pay for the stock.

Dropbox’s $7.1 billion valuation is lower than the $10 billion valuation it received several years ago from private investors, which indicates Wall Street may not be willing to pay as much for the company as previous investors, according to reports.

Good to know: Dropbox’s Houston owns 25% of his company today, according to the company’s prospectus. Each time he received more venture capital money, he had to sell off part of his ownership of the company. (Venture capital company Sequoia, for example, owns about 23% of the company.) Nevertheless, considering its current valuation, Houston’s stake would be worth about $1.7 billion.

The post What Took Dropbox So Long to Go Public? We Explain What an Exit Is appeared first on Stash Learn.

In simple terms, cloud computing is a way of storing, accessing, and syncing data and software through the internet instead of your local computer hard drive. The ‘cloud’ is actually a global network of servers. To say those servers host massive amounts of data is an understatement.

Through web-based tools and applications, information is accessible anytime from any device with internet access and can be shared with others as you choose. Have a Gmail account? Your web-based email system is in the cloud. Share business documents with colleagues via Dropbox or Google Docs? That’s the cloud.

According to a 2016 study, the big data and business analytics industry is expected to grow 56% and become a $203 billion market by 2020.

Backup your phone’s photos and videos? Stored in the cloud. Netflix? You guessed it – they host their video content on Amazon Web Services, aka the cloud.

The cloud takes shape

The cloud isn’t only about data storage. Cloud-based applications have transformed the way we do business. Remember the days when email chains included twenty different versions of the same document, all at various stages in the editing process? As part of a whole suite of cloud-based applications, Google Docs allows users to collaborate and work simultaneously, showing real-time updates from anywhere in the world.

The cloud isn’t only about data storage. Cloud-based applications have transformed the way we do business.

Businesses that leverage big data use the cloud to capture, organize, and analyze massive data sets, something that was not possible before the cloud. According to a 2016 study, the big data and business analytics industry is expected to grow 56% and become a $203 billion market by 2020. In 2016, the banking industry led the way, investing almost $17 billion in software for risk management and fraud prevention.

Salesforce, Netflix, and Facebook don’t offer cloud services, but they rely on the cloud to provide their service to you

It takes more than just computer software companies to make the cloud possible. Sure, there are the pure play cloud computing companies that offer direct services such as network hardware and software, internet marketing and services, IT support, communications equipment, storage, and peripherals.

But there’s also non-pure players, like Salesforce, Netflix, and Facebook. They don’t offer cloud services, but they rely on the cloud to provide their service to you.

The technology behind cloud computing was first developed in the 1950s, but what we have come to know as ‘the cloud’ didn’t take shape until the turn of the 21st century when Salesforce stopped selling its software on disc and started providing their applications via the web.

If you think the best is yet to come with cloud technology, then consider an investment in an ETF on Stash that’s all about the cloud.

What’s inside On Cloud 9?

This investment (Ticker: SKYY) includes cloud computing companies – both pure play and non-pure play alike. Remember, pure play means the company actively supports and forms the cloud, and non-pure play companies utilize the cloud to provide their service.

• Tech hardware companies like Netapp and Hewlett Packard that create the systems and the equipment
• Software masters like Microsoft, Oracle, and Adobe
• Industry giants like Amazon and Apple that provide cloud storage data centers
• Companies like Google that provide industry-leading cloud-based applications
• And yes, even social media giants like Facebook and providers like Netflix who rely on the cloud to enable your binge-watching marathons.

At the time of this post, On Cloud 9 includes 33 companies. On Cloud 9 is ‘The First Trust ISE Cloud Computing Index Fund’ (SKYY) and has a 0.60% expense ratio.

Is the sky the limit?

What’s next in the world of cloud computing? More mobile capabilities, wearable technology, machine learning and AI (artificial intelligence). The Internet of Things (IoT), where machines connect to other machines and sensors, gathering data and leveraging it thanks to cloud computing, will one day revolutionize everything from smart refrigerators to smart stethoscopes to smart roads, bridges, and cars.

The cloud has the potential to touch almost everything we do – and companies of all sizes, including those that are still only an idea, will use the cloud to grow bigger, faster, and more innovative.

If you think that we’re just getting started, consider an investment in On Cloud 9.

The post Investment Profile: On Cloud Nine appeared first on Stash Learn.