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Investing Theme: Cloud, Big Data, Security



September 09, 2014 – Comments (0) | RELATED TICKERS: AVT , CSCO , JNPR

Board: New Paradigm Investing

Author: anthonyms

As described in a post towards the end of last year – (, I have started to structure my investing according to some new paradigm investment themes and as a result have sought to identify potential plays that represent high growth opportunities associated with and exposed to clearly identifiable, large and potentially transformational mega themes and offer profitable participation.

One of the responding posts on the original thread suggested dissecting these in a theme by theme, play by play discussion – which I will attempt to kick start now with a follow up post for each of the 10 themes identified. Where I have taken a position in a particular play I will highlight this in the interests of transparency.

In Theme 1/10 I posted on 3D Printing – (
In Theme 2/10 I posted on Natural Gas, Shale & Clean Energy – (
In Theme 3/10 I posted on Internet of Things/M2M – (
In Theme 4/10 I posted on Robotics – (

This post I am moving onto:-

Theme 5/10:- Cloud, big data and cyber security

It’s hard describe the cloud mega theme without it sounding something like Skynet out of Terminator but anyway here goes… the cloud has been taking center stage as THE tech story of the decade and with every day that goes by the convergence of the cloud, big date and cyber security gets closer and closer as an integrated phenomenon (witness Apple’s iCloud security breaches and the acquisitions of cyber security software players providing cloud protection by the data storage companies). Having already subsumed the mobile trend, it is also closely related to the IOT theme - which might well experience a complete overlap in the future. The importance of the cloud however is not the technological significance of the theme but in the fact that more than any other technology wave since the internet itself, the cloud has the opportunity to completely disrupt business models altogether – whether it be Salesforce, AirBnB or Uber, cloud based platform operators are disrupting whole industries and shifting the value chain completely from end service providers to integrated platform businesses. As the cloud takes shape it has become inseparable from big data (and fast data) together with the implications concerning the requirements for security as a priority (both of the data and for the cloud itself).

Within this theme there is an expanding array of players that offer pure play and reasonably focused exposure to these forces. First and foremost there are the physical hardware OEM infrastructure players. Secondly there are middleware/software providers. Thirdly there are service operators/providers. Finally there are pure play cloud and/or big data based end businesses.

Key documents and resources

McKinsey’s take:{21F95813-D665-4176-80BD-3823144E3FE2}&pid={A1D4B928-3A7B-4073-AFFA-6AD78525CDB1}
The World Economic Forum take:
IBM take:
BoozAllen’s take on cloud economics:
The Economist’s take:
MIT take:
The future of data storage:
trend micro take:
IDC take:
Forbes take:
Statista take:

Ok now for the hard part as Warren Buffet identifies: “The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.” (

The plays I have identified so far are as follows. (* denotes I have an investment interest).

OEM/Hardware Infrastructure Players

Alliance Fiber Optics Products (AFOP)
Alliance Fiber Optic Products, Inc. designs, manufactures, and markets various fiber optic components and integrated modules for communications equipment manufacturers and service providers in North America, Europe, and Asia. It provides connectivity products, including connectivity modules; optical connectors, adapters, and cable assemblies; fused and planar fiber optical splitters and couplers; optical tap couplers and ultra low polarization dependent loss tap couplers; amplifier wave division multiplexers (WDM) couplers; optical fixed attenuators; fused fiber WDM couplers; and fiber array units. The company also offers optical passive products comprising filter WDMs, amplifier filter WDMs, dense wave division multiplexers (DWDMs), coarse wavelength division multiplexers, compact coarse wavelength division multiplexers, add/drop DWDM filters, optical isolators, optical bypass switches, and automatic variable optical attenuators.

AFOP is a $260m market cap corporation and sits at a p/e of 12 and a p/s of 2.8. Whilst down from its 52 week high it has been a takeoff situation over the last 2-3 years.

Arris Group (ARRS)
ARRIS Group, Inc. provides media entertainment and data communications solutions in the United States and internationally. The company operates in two segments, Customer Premises Equipment and Network & Cloud. The Customer Premises Equipment segment offers various product solutions, including set-top boxes, gateways, digital subscriber lines and cable modems, and embedded multimedia terminal adapters and voice/data modems that enable service providers to offer voice, video, and high-speed data services to residential and business subscribers. The Network & Cloud segment provides hybrid fiber coax equipment, edge routers, metro Wi-Fi, video management, storage, and distribution equipment for cable providers; and fiber-based and copper-based broadband transmission equipment for telco providers. This segment also offers video headend management system for legacy moving picture experts group/digital video broadcasting systems, as well as full Internet protocol video systems; support for multi-screen video management, protection, monetization, and delivery; and various products for performance management, configuration, and surveillance.

Arris is capitalized at $4.4bn, sits 20% off its 52 week high and at a p/e of 646 and a p/s of 0.91 (which sounds a bit weird).

Avnet (AVT)
Avnet, Inc., together with its subsidiaries, distributes electronic components, enterprise computer and storage products, IT solutions and services, and embedded subsystems in the Americas, Europe, the Middle East, Africa, and the Asia/Pacific. It operates through two segments, Electronics Marketing (EM) and Technology Solutions (TS). The EM segment markets and sells semiconductors; interconnect, passive, and electromechanical devices; and embedded products for the electronic component manufacturers, as well as offers an array of value-added services that enable customers to evaluate, design-in, and procure electronic components throughout the lifecycle of their technology products and systems. This segment offers its products and services to various customer base serving automotive, communications, computer hardware and peripherals, industrial and manufacturing, medical equipment, and defense and aerospace end-markets. The TS segment distributes enterprise computing servers and systems, software, storage, services, and complex solutions; and provides hard disk drives, microprocessors, motherboards, and DRAM module technologies to manufacturers of general-purpose computers and system builders. It also partners with its customers and suppliers to create and deliver data center and IT lifecycle solutions that solve the business challenges of end-user customers, as well as offers businesses, IT lifecycle, education, cloud, and managed solutions.

Avnet is a $6bn company sitting 10% off its 1 year high/all time high, at a p/e of 12 and a p/s of 0.22. It is a 10x over recent investing horizons.

Cisco (CSCO)
No surprise that the company that singlehandedly built the internet 1.0 is a leading cloud company contender. Whilst its hardware equipment business needs no introduction what is interesting to watch is the value chain offering build out Cisco is making to be a full hardware, software and service provider – perhaps the most integrated of all. Cisco Systems, Inc. designs, manufactures, and sells Internet protocol (IP) and other products related to the communications and information technology industry worldwide. It provides switching products, including fixed-configuration and modular switches, and storage products that provide connectivity to end users, workstations, IP phones, access points, and servers, as well as function as aggregators on local-area networks and wide-area networks; and routers that interconnects public and private wireline and mobile networks for mobile, data, voice, and video applications. The company also offers set-top boxes, cable modem termination systems, hybrid fiber coaxial access network products, quadrature amplitude modulation products, and cable modems; and video software and solutions. In addition, it provides collaboration products comprising IP phones, call center and messaging products, unified communications infrastructure products, and Web-based collaborative offerings, as well as telepresence systems; and security products such as firewall, intrusion prevention, remote access, virtual private networks, unified clients, network admission control, Web gateways, and email gateways, which deliver identity, network, and content security solutions for mobile, collaborative, and cloud-enabled businesses. Further, the company offers wireless products consisting of wireless access points and network managed services, as well as standalone, switch-converged, and cloud managed solutions; and data center products, which include blade and rack servers, fabric interconnects, software, and server access virtualization solutions; and other products, such as emerging technologies and other networking products.

At $128bn it is already a monster player and unlikely to 100x with the cloud’s arrival. It sits at a 16.8 p/e and has a p/s of 2.7. Whilst it grows revenues at around a 5% rate, the cloud is going to offer Cisco a new horizon to chase. Whilst near its 52 week high, it hasn’t retaken its 2007 high let alone its dotcom peak.

EMC typifies the confluence of Big Data, the Cloud and Security better than any company possibly. EMC Corporation develops, delivers, and supports information infrastructure and virtual infrastructure technologies, solutions, and services. It operates in three segments: Information Storage, Information Intelligence Group, and RSA Information Security. The company offers enterprise storage systems and software deployed in storage area networks (SAN), networked attached storage (NAS), unified storage combining NAS and SAN, object storage, and/or direct attached storage environments, as well as provides backup and recovery, disaster recovery, and archiving solutions. It also offers information security solutions that are engineered to combine agile controls for identity assurance, fraud detection, and data protection, as well as security analytics and GRC capabilities; and expert consulting and advisory services. In addition, the company provides information intelligence software, cloud solutions, and services, including EMC Documentum xCP for building business and case management solutions; EMC Captiva for intelligent enterprise capture; EMC Document Sciences for customer communications management; EMC SourceOne Kazeon for e-discovery; the EMC Documentum platform for creating, managing, and deploying business applications and solutions; and the EMC OnDemand private cloud deployment model for enterprise-class applications. Further, it offers VMware virtual and cloud infrastructure solutions that enable organizations to aggregate multiple servers, storage infrastructure, and networks together into shared pools of capacity that could be allocated to applications as needed. Additionally, the company provides installation, professional, software and hardware maintenance, and training services.

Whilst growth rates have fallen back from the 50% YoY peak a few years ago to single digits (for storage at least) with its stakes in VMWare and Pivotal EMC has diversified growth potential to tap whilst storage growth returns. As the storage leader it is a $60bn corporation with a p/e of 22, a forward p/e of 13 and a p/s of 2.5 sitting at its 52 week and 10 year highs (although well down from its dotcom peak). EMC is also facing activist investor to unlock the sum of valuation potential with its constituent businesses.

F5 Networks (FFIV)
F5 Networks, Inc. develops, markets, and sells application delivery networking products that optimize the security, performance, and availability of network applications, servers, and storage systems. The company offers Local Traffic Manager, which provides intelligent load-balancing and traffic management; Global Traffic Manager that automatically directs users to the closest or best-performing data center; Access Policy Manager, which provides secure, granular, and context-aware access to networks and applications; and Application Security Manager, an application firewall. It also provides Link Controller that monitors the health and availability of each connection in organizations with more than one Internet service provider; Advanced Firewall Manager to guard data centers against incoming threats; Application Acceleration Manager, which combines the application delivery features available in WAN optimization manager and WebAccelerator; and Policy Enforcement Manager that offers traffic classification capabilities to identify the specific applications and services to service providers. In addition, the company offers fraud detection and prevention software; BIG-IP application delivery controllers; VIPRION chassis-based systems; BIG-IP Edge Gateway, a remote access product that provides context-aware, policy controlled, and remote access to applications at LAN speed; and Traffix Signaling Delivery Controller for diameter signaling and routing. Further, it provides Enterprise Manager 4000, which allows customers to discover and view its products in a single window; and ARX product family, a series of enterprise-class intelligent file virtualization devices.

F5 is near its 52 week high with a market capitalisation of $9bn, a p/e of 34 and a p/s of 5.

Juniper Networks (JNPR)
Juniper Networks, Inc. designs, develops, and sells products and services for high-performance networks worldwide. The company operates in two segments, Platform Systems Division and Software Solutions Division. The Platform Systems Division segment offers scalable routing and switching products that are used in service provider, enterprise, and public sector networks to control and direct network traffic between data centers, core, edge, aggregation, campus, wide area networks, and consumer and business devices. Its routing products and services include the ACX, E, M, MX, PTX, and T series product families; and switching products and services primarily consist of the EX series and wireless local area network solutions, as well as the QFabric systems. The Software Solutions Division segment offers solutions focused on network security and network services applications for service providers and enterprise customers. Its security products and services include firewalls, Firefly, virtual private network systems and appliances, secure socket layer virtual private network appliances, intrusion detection and prevention appliances, wide area network optimization platforms, Junos Pulse, and J series products. This segment?s software products and services for the mobile and wireline network edge comprise traffic flow monitoring, dynamic application and subscriber awareness, and next generation network addressing products. Its management and virtualization products include Junosphere, Junos SDK, and JunosV App Engine, as well as Junos Space. The company also offers technical support and professional services, as well as educational and training programs. Juniper recently failed in its lawsuit against Palo Alto Networks which has not helped its market position and moat.

Juniper is valued at $10bn with a p/e of 25, a forward p/e of 12 and a p/s of 2. Juniper is 20% off its 52 week high and down considerably from its 2011 and dotcom peaks.

Micron (MU)*

Micron Technology, Inc., together with its subsidiaries, manufactures and markets semiconductor solutions worldwide. It offers dynamic random access memory (DRAM) products for data storage and retrieval, including DDR4, DDR3, and DDR2 that offer high speed and high bandwidth; and other specialty DRAM memory products, such as DDR and DDR2 mobile low power DRAM, DDR, SDRAM, reduced latency DRAM, and pseudo-static DRAM products that are used in computers, servers, tablets, mobile phones, communication equipment, computer peripherals, industrial, automotive, and other electronic devices. The company also provides NAND flash memory products, such as flash memory cards comprising CompactFlash, Memory Stick, and Secure Digital; and JumpDrive products that are used in mobile phones, solid-state drives, tablets, computers, industrial and automotive applications, MP3/4 players, and other personal and consumer applications. In addition, it resells flash memory products that are purchased from other NAND flash suppliers. Further, Micron Technology, Inc. provides NOR flash memory products that are electrically re-writeable, non-volatile semiconductor memory devices used in consumer electronics, industrial, wired and wireless communications, computing, and automotive applications.

Micron has achieved 5x over the last year or so and is valued at $35bn, with a p/e of 13 and a p/s of 2.3 and sits within 10% of its 52 week high.

Nimble (NMBL)
Nimble Storage, Inc. provides flash-optimized hybrid storage platform. The company?s software and storage systems handle various mainstream applications, including virtual desktops, databases, email, collaboration, and analytics. It offers systems that provide adaptive performance for high-input/output and high-capacity mainstream business applications and environments, such as Exchange, Oracle, SharePoint, SQL Server, virtual desktop infrastructure, and server virtualization. Nimble is extremely fast growing and has doubled or trebled its revenue over the last prior 2-3 years. Apart from the challenge of other all flash providers the question will be whether it has sufficient head start over established players like EMC and NTAP to survive and thrive.

Nimble is valued at $2bn and has a p/s of 10 and sits 50% down from its 52 week peak.

NetApp (NTAP)*
NetApp, Inc. is engaged in design, manufacture, and marketing of networked storage solutions. The company provides storage and data management software, systems, and services. It offers Data ONTAP storage operating system that delivers integrated data protection, comprehensive data management, and built-in efficiency software for virtualized, shared infrastructures, cloud computing, and mixed workload business applications; storage efficiency technologies; FlexArray storage virtualization software, which unifies and simplifies IT operations by virtualizing arrays; data protection software products; and data retention and archive products. The company also provides storage management and application integration software to control, automate, and analyze shared storage infrastructures; StorageGRID, an object storage software to manage petabyte-scale object-oriented repositories of images, video, and records for enterprises and service providers; and storage encryption solutions provide access to encryption of data at rest through the use of self-encrypting drives. In addition, it offers and E-Series systems for data storage. Further, the company provides hardware maintenance, and software entitlement and maintenance; professional services; technical support solutions; and customer education and training to help customers in managing their data. A challenger to EMC from an established player point of view, NTAP is having to re-invent its credentials in a world of flash storage.

NTAP has a market cap of $13bn, a p/e of 23, a forward p/e of 13 and a p/s of 2. It sits 25% off its post dotcom highs. NTAP shares have bounced back in line with the activist interests in EMC.

Netgear (NTGR)
NETGEAR, Inc. provides networking products to consumers, businesses, and service providers. The company operates in three segments: Retail, Commercial, and Service Provider. The Retail segment offers home networking, home video monitoring, storage, and digital media products. The Commercial segment provides business networking, storage, and security solutions. The Service Provider segment offers home networking hardware and software solutions, as well as 4G LTE hotspots to service providers for sale to their subscribers. The company?s products include commercial business networking products, such as Ethernet switches, wireless controllers, Internet security appliances, and unified storage products; broadband access products consisting of routers, gateways, hotspots, IP telephony products, and media servers; and home network connectivity products comprising WiFi range extenders, media adapters, powerline adapters and bridges, multimedia over coax alliance standard adapters and bridges, remote video monitoring systems, and wireless and Ethernet network interface cards and adapters.

Netgear has a $1bn valuation (25% down from its 2011 peak), a p/e of 23 and a p/s of 0.84

Overland Storage (OVRL)
See Sphere 3D

SanDisk (SNDK)
SanDisk is a strong player in both corporate enterprise storage (having purchased fusion IO this year) as well as consumer device storage. SanDisk Corporation designs, develops, manufactures, and markets data storage products that are used in various consumer electronics products. The company provides removable cards, which are used in various consumer electronics devices, such as mobile phones, tablets, eReaders, digital cameras, camcorders, gaming devices, and personal computers under the CompactFlash, SanDisk Ultra, SanDisk Extreme, and SanDisk Extreme PRO brands. It also offers embedded flash products that are used in mobile phones, tablets, computing platforms, imaging devices, and other products under the iNAND brand name; and solid state drives (SSDs) for client computing platforms and enterprise data centers, as well as enterprise software solutions to enhance the performance of SSDs. In addition, the company provides universal serial bus flash drives for use in the computing and consumer markets; digital media players under the Sansa brand; wireless media and flash drive products under the brand name of SanDisk Connect; and memory wafers and components.

SanDisk is valued at $22bn and has a p/e of 20, a forward p/e of 15 and a p/s of 3. It is 10% off its 52 week or all time high.

Sonus Networks (SONS)
Sonus Networks, Inc. provides networked solutions for communications service providers and enterprises. The company?s solutions enable its customers to seamlessly link and leverage multivendor, multiprotocol communications systems, and applications across their networks. Its products include session border controllers (SBC) that address the network requirements for small, medium, and large businesses, as well as for communications service providers; and open services switches for converting various types of voice signals into Internet protocol (IP) packets, and transmitting those IP packets over a data network. The company also offers policy/routing servers, a central routing and policy engine for its softswitch and distributed SBC solutions. In addition, it provides various products to help manage and integrate its networked solutions with internal provisioning and billing systems, including Sonus NetScore, a network performance analysis tool, which provides a real-time assessment of the state of a service provider's or enterprise's network, such as quality of service, call delay, network effectiveness, congestion, and efficiency. Further, the company offers Sonus Element Management Systems for centralized management and provisioning of Sonus network elements; and Sonus DataStream Integrator for integration of call detail records with back-office billing and accounting systems. Additionally, the company provides professional consulting and services, including integration, deployment, migration, and operation support services.

Sonus is valued at $1bn and is just below its 52 week high with a forward p/e of 37 and a p/s of 3.5

Seagate Technologies (STX)
Seagate Technology Public Limited Company designs, manufactures, and sells electronic data storage products in the Asia Pacific, the Americas, and EMEA countries. The company provides hard disk drives, solid state hybrid drives, and solid state drives that are designed for enterprise servers and storage systems in mission critical and nearline applications; for client compute applications comprising desktop and mobile computing; and for client non-compute applications, such as digital video recorders, personal data backup systems, portable external storage systems, and digital media systems. It also offers data storage services, including online backup, data protection, and recovery solutions for small and medium-sized businesses. In addition, the company ships external backup storage solutions under its Backup Plus and Expansion product lines, as well as under the Samsung and LaCie brand names; Wireless Plus wireless drives; and network attached storage solutions under its Central, NAS, NAS Pro, and Rackmount NAS product lines.

Seagate which has been around since long before the internet is valued at $20bn with a p/e of 13, a forward p/e of 10 and a p/s of 1.5. Whilst seemingly good value from a metrics point of view it appears to have a declining revenue base even if at an all time high having moved 6x in 2 years!

Skyworks Solutions (SKWK
Skyworks Solutions, Inc., together with its subsidiaries, provides analog semiconductors worldwide. Its product portfolio includes amplifiers, attenuators, battery chargers, circulators, DC/DC converters, demodulators, detectors, diodes, directional couplers, front-end modules, hybrids, infrastructure radio frequency subsystems, isolators, LED drivers, mixers, modulators, optocouplers, optoisolators, phase shifters, phase locked loops/synthesizers/VCOs, power dividers/combiners, power management devices, receivers, switches, voltage regulators, and technical ceramics. The company also offers MIS silicon chip capacitors and transceivers. It provides products for supporting automotive, broadband, cellular infrastructure, energy management, GPS, industrial, medical, military, wireless networking, smartphone, and tablet applications. To many Skyworks represents a favourite pick in the Cloud and IoT spaces.

Skyworks is valued at $10bn with a p/e of 33, a forward p/e of 14 and a p/s of 5 and sits pretty close to its all time dotcom high.

Ubiquiti Networks (UBNT)*
Whilst originating with hardware/equipment, UBNT is working with WISPs to disrupt the stranglehold Cisco has on the internet and is headed by one of the most highly rated CEOs in the US. Ubiquiti Networks, Inc., together with its subsidiaries, provides various networking products and solutions for service providers and enterprises in the United States and internationally. The company?s service provider product platforms provide carrier-class network infrastructure for fixed wireless broadband, wireless backhaul systems, and routing; and enterprise product platforms provide wireless LAN infrastructure, video surveillance products, and machine-to-machine communication components. Its products and solutions include high performance radios, antennas, software, communications protocols, and management tools that are designed to deliver carrier and enterprise class wireless broadband access and other services primarily in the unlicensed RF spectrum. The company offers various technology platforms, including airMAX, which includes protocols that contain technologies for minimizing signal noise; EdgeMAX, a disruptive price-performance software and systems routing platform; and airFiber, a point-to-point radio system. It also provides UniFi, an enterprise Wi-Fi System that includes Wi-Fi certified hardware with software based management controller; UniFi Video H.264 megapixel IP cameras; and UniFi Video management software controller that are used to manage multiple UniFi Video H.264 IP cameras, as well as manage digital video recorder devices; and mFi, which comprises hardware sensors, power devices, and management software that allows devices to be monitored and controlled remotely via Wi-Fi. In addition, the company offers miscellaneous products, such as mounting brackets, cables, and power over Ethernet adapters. Ubiquiti Networks sells its products and solutions through a network of distributors and original equipment manufacturers.

UBNT has a $4bn market cap and has a p/e of 26, a forward p/e of 17 and a p/s of 7. It is 20% down from its 52 week high after inventory concerns though now in a strong uptrend.

Violin Memory (VMEM)*
Violin Memory, Inc. develops and supplies memory-based storage systems to bring storage performance in line with high-speed applications, servers, and networks worldwide. The company provides flash memory arrays that integrate enterprise-class hardware and software technologies to address the limitations disk-based and flash-based storage solutions that use off-the-shelf components. Its products include 6000 Series Flash Memory Array; Violin Symphony, a system management software that enables centralized management of Violin Flash Memory Arrays; and Violin Maestro, a suite of memory services software, which bring the speed of flash memory to applications running on legacy storage environments. Churn in the business model makes YOY comparisons difficult but the business is chasing the path Nimble and Pure storage have laid out.

Violin Memory is valued at $400m and has a p/s of 4.5. It sits 45% down from its 52 week high.

Western Digital Corporation (WDC)
Western Digital Corporation, through its subsidiaries, develops, manufactures, and sells data storage solutions that enable consumers, businesses, governments, and other organizations to create, manage, experience, and preserve digital content. It provides hard disk drives (HDDs) and solid-state drives for desktop and notebook personal computers (PCs), and performance enterprise and capacity enterprise markets. The company also offers HDDs used in consumer electronics, such as DVRs, gaming consoles, security surveillance, systems, set top boxes, camcorders, multi-function printers, and entertainment and automobile navigation systems. In addition, it provides HDDs embedded into WD, HGST, and G-Technology branded external storage appliances with capacities ranging from 500 GB to 24 TB, as well as using various interfaces, such as USB 2.0, USB 3.0, external SATA, FireWire, Thunderbolt, and Ethernet network connections. The company sells its products to computer manufacturers, resellers, and retailers worldwide. It serves storage subsystem suppliers, original equipment manufacturers (OEMs), Internet and social media infrastructure players, and PC and Mac OEMs providers.

WDC has a market cap of $23.5bn, has a p/e 23 and a p/s of 1.6 and sits at its 52 week high.

Middleware/Software Providers

Check Point (CHKP)*
Check Point Software Technologies Ltd. develops, markets, and supports a range of software, combined hardware, and software products and services for information technology (IT) security worldwide. The company provides network security gateway software blades and appliances that enable its customers to implement their security policies on network traffic between internal networks and the Internet, as well as between internal networks and private networks that are shared with partners; and endpoint security solutions, which provide various software blades that run on individual computers connected to the network, such as desktop and laptop computers, as well as other mobile devices. It also offers security management solutions to ensure consistent operations in accordance with an enterprise?s security policy, as well as provides SMART-1, a security management appliance that combines functionality, and storage and turn-key deployment into a single device. In addition, the company offers technical services, such as technical customer support programs and plans; certification and educational training; and professional services in implementing, upgrading, and optimizing products comprising design planning and security implementation services. Further, it provides ZoneAlarm solutions that protect consumers from hackers, spyware, and identity theft. The company serves enterprises, service providers, small and medium sized businesses, and consumers. Check Point Software Technologies Ltd. sells its products and services through a network of channel partners, such as distributors, resellers, value-added resellers, system integrators, and managed services providers. Suffice it to say Check Point is the independent gorilla in security software and has one of the highest margins in the business.

Check Point is a $13bn company on a p/e of 21 and a p/s of 9.5. It is sitting at a post dotcom boom high. Despite the advent of next generation security players, Check Point has maintained industry leading margins and continues to grow at 10%.

Barracuda Networks (CUDA)*
Barracuda Networks, Inc. designs and delivers security and storage solutions. It offers cloud-connected solutions that help its customers address security threats, enhance network performance, and protect and store their data. The company provides various security solutions, including Barracuda Spam & Virus Firewall, an email security solution; Barracuda Web Filter, a Web security solution to protect users from rapidly evolving Web-based threats, as well as to enhance productivity and optimize bandwidth; next-generation firewall solutions; Barracuda Web Application Firewall, an application security solution for protecting Web servers from data breaches and downtime; Barracuda Load Balancer ADC that optimizes application performance, availability, and security; and Barracuda SSL VPN, which offers remote users with secure access to internal network resources from any Web browser while providing the security needed to protect internal systems from unauthorized access, viruses, and other malware. It also offers storage solutions comprising Barracuda Backup, an end-to-end solution that simplifies the backup process and enables secure offsite replication; Barracuda Message Archiver that reduces archive sizes through eliminating duplicate messages, storing only one instance of each message attachment, and then compressing the stored data; Copy, a cloud-based file storage platform that allows its customers to securely access, share, and sync files of any size from any device; and SignNow, a mobile eSignature application. The company sells its appliances, services, and software products to education, government, financial services, healthcare, professional services, telecommunications, retail, and manufacturing industries through its sales personnel, distribution partners, and value added resellers in approximately 100 countries worldwide. One of the differentiators for Barracuda is its focus on mobile cyber security which is key to the cloud.

Barracuda is valued at $1.35bn and is priced at a forward p/e of 105 and a p/s of 5.5. Barracuda has struggled to return to its 1 year highs set in March, however it is a relatively fast growing and lower market cap player which is misunderstood by analysts offering a reasonable entry point for cloud security play.

Tableau (DATA)
Tableau Software, Inc. provides various business analytics software products in the United States, Canada, and internationally. It offers Tableau Desktop, a self-service analytics product that empowers people to access and analyze data independently; and Tableau Server, a business intelligence platform with data management, scalability, and security to foster the sharing of data, as well as to improve the dissemination of information in an organization, and promote enhanced decision-making. The company also offers Tableau Online, a cloud-based hosted version of Tableau Server; and Tableau Public, a cloud-based platform that allows the users of bloggers, journalists, researchers, and government workers to visualize public data on their Websites. It also provides related maintenance and support, and training and professional services. The company offers its products and services to organizations in various industries, including business services, energy and telecommunications, financial services, Internet, life sciences and healthcare, manufacturing and technology, media and entertainment, public sector, education, retail, consumer, and distribution industries. Tableau Software, Inc. sells its products directly, gas well as through technology vendors, resellers, original equipment manufacturers, and independent software vendor partners. It has strategic alliance with Splunk Inc. to enhance the visual analytics and machine data; and strategic partnership with Brillio.

Tableau since its recent IPO has become the darling of the stock market for big data plays. It is growing at the 100% rate YoY and is valued at $4.5bn with a forward p/e of 400 and a p/s of 15. It has retreated considerably from its March highs although 40% off its lows for the year.

Datawatch (DWCH)*
Datawatch Corporation designs, develops, markets, and distributes business computer software products in the United States and internationally. Its software solutions allow organizations to visually represent and integrate data from any area of their business. The company offers visual data discovery solutions, including Datawatch Desktop to design, discover, and explore new insights; Datawatch Server to automate, manage, store, and visualize information from any data source; Datawatch Modeler, which captures and transforms data from virtually any source; Datawatch Automator that securely and automatically distribute information in the organization; Datawatch RMS, a Web-based report analytics solution that integrates with existing enterprise content management system; and Datawatch Report Manager OnDemand, which manages document images, reports, customer correspondence, statements, and more. The company also provides business service management solutions. In addition, it offers educational services, such as training choices to customers and partners; professional services to assist customers; and customer support services. Datawatch competes with traditional data modeling software companies as well as visualization companies – such as Splunk.

It has a market cap of $130m, no forward p/e and a p/s of 4. It has grown revenues at 15-20% range over recent years and sits 2/3rds off its 52 week highs.

FireEye (FEYE)
FireEye, Inc. provides products and services for detecting, preventing, and resolving advanced cybersecurity threats. Its products comprise threat prevention system that provides threat protection from network to endpoint for inbound and outbound network traffic, such as Web threat prevention appliances to analyze all Web traffic; email threat prevention appliances that detect and stop advanced attacks; and file threat prevention appliances, which analyze network file servers to detect and quarantine malicious software. The company’s products also include central management appliances that manage threat prevention system; forensic analysis system, which executes and inspects malware, zero-day, and other advanced cyber attacks; and endpoint threat prevention systems that detect, analyze, and resolve security incidents. In addition, it offers dynamic threat intelligence cloud and email threat prevention attachment/URL engine services, as well as incident response and related consulting, training and professional, and customer support and maintenance services. Further, the company provides Security-as-a-Service, including managed defense, cloud-based email threat prevention, and mobile threat prevention services.

FEYE is a $4.5bn corporation with a p/s of 17. Whilst possibly the most highly rated of the next generation security providers and one of the fastest growing it has by far the most expensive valuation.

Fortinet (FTNT)
Fortinet, Inc. provides network security appliances and unified threat management network security solutions worldwide. The company primarily offers FortiGate physical and virtual appliances that provide a set of security and networking functions. It also provides FortiManager product family to manage system configuration and security functions of multiple FortiGate devices from a centralized console; and the FortiAnalyzer product family, which enables the collection, analysis, and archiving of content and log data generated by its products. In addition, the company offers FortiAP secure wireless access points; FortiWeb, which provides security for Web-based applications; FortiMail for multi-featured messaging security; FortiDB for centrally managed database-specific security; FortiClient for endpoint security of desktops, laptops, and mobile devices; and FortiScan for endpoint vulnerability assessment and remediation. Further, it offers FortiSwitch Ethernet switches; FortiBridge bypass appliances to help ensure network availability; FortiAuthenticator for scalable secure authentication for enterprise networks; FortiADC for optimizing the availability and performance of mobile, cloud, and enterprise applications; FortiSandbox for detecting and mitigating advanced persistent threats; FortiCache for reducing the cost and impact of cached Internet content; FortiDNS for secure domain name system caching; FortiDDoS for protection against distributed denial of service attack; and FortiVoice for business telephone communication.

Fortinet is another extremely prominent next gen security provider also valued around the $4bn mark and at its 52 week high with a p/e of 110, a forward p/e of 45 and a p/s of 6.

Imperva (IMPV)*
Imperva, Inc. develops, markets, sells, services, and supports data center security solutions that protect high value applications and data assets in physical and virtual data centers. The company operates in two segments, Imperva and Incapsula. Its SecureSphere platform provides database, file, and Web application security in various data centers, including on-premise data centers, as well as private, public, and hybrid cloud computing environments. The company also offers cloud-based services, such as Web application firewall (WAF), content delivery optimization, distributed denial of service (DDoS) attack prevention, and load balancing services. In addition, it provides DDos Protection Service for SecureSphere, a cloud-based security service that safeguards businesses from the DDoS attacks; ThreatRadar Reputation Services, a subscription service that recognizes attack sources and adjusts Web security policies; ThreatRadarFraud Prevention Services, a service used to enable organizations to provide and manage fraud detection solutions; and Skyfence, which protects internal corporate applications, such as employee- and back office-oriented applications. Further, the company offers Security Operations Center, a cloud-based service that configures provisions, manages, and monitors the SecureSphere WAF appliance in the hosting partners data centers; provides maintenance updates, patch management, and backups; and delivers daily or weekly reports, real-time alerts, and incident responses for suspicious activities.

Imperva is valued at a reasonably light valuation of $800m with a p/s of 5.

Palo Alto Networks (PANW)*
PANW is a next generation security provider born out of a breakaway group out of Check Point. Palo Alto Networks, Inc. offers a network security platform in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. The company’s platform comprises Next-Generation Firewall that delivers application, user, and content visibility and control. It delivers its platform in the form of a hardware or virtual appliance, and includes a suite of subscription services, as well as support and maintenance services. The company’s products include firewall appliances; Panorama, a centralized security management solution for the global control of appliances deployed on an end-customer?s network as a virtual appliance or a physical appliance; and Virtual System Upgrades, which are available as extensions to the virtual system capacity that ships with the appliance. Its subscription services include threat detection and prevention, URL filtering, laptop and mobile devices protection, and malware and threats protection. The company also offers professional services, which include on-location planning, designing, and deployment of security solutions; application traffic management, solution design and planning, configuration, and firewall migration; and education services. Its platform enables enterprises, service providers, and government entities to identify, control, and safely enable applications running on their networks, as well as protect against cyber threats in real time.

PANW is valued at $7bn and sits at its all time high. It has one of the fastest growth rates in cyber security and has recently shaken off its legal threat from Juniper. It has a forward p/e of 134 and a p/s of 12.

Qlik (QLIK)
Qlik Technologies Inc. provides user-driven business intelligence solution that enables customers to make business decisions. It develops, commercializes, and implements software products and related services. The company offers QlikView Business Discovery platform, which enables business users to explore data; ask and answer their own stream of questions; and follow their own path to insight on their own, and in teams and groups. It also provides license, maintenance, and professional services. Qlik and Splunk are the new darlings of big data and both compete as well as compliment each other.

Qlik is a $2.6bn company (20% down from its 52 week high), with a forward p/e of 76 and a p/s of 5.

Sphere 3D Corporation (ANY)
Sphere 3D Corporation provides virtualization technology solutions. The company offers Glassware 2.0 platform that delivers virtualization of applications; and enables movement of applications from a physical PC or workstation to a virtual environment on premises and/or from the cloud. It also develops V3 systems appliances, a series of servers that are used for virtualization; and provides Desktop Cloud Orchestrator software, which allows administrators to manage local, cloud hosted, or hybrid virtual desktop deployments. The company offers V3 systems appliances for telecom and msp, healthcare, telecommunication, and education industries, as well as for professional firms, call centers, managed service providers, and government. With the acquisition of Overland it adds a storage solution to its offerings.

Sphere 3D is valued at $150m but appears to be at a pre-revenue stage of its lifecycle right now with its re-organisation.

Splunk (SPLK)
Splunk, Inc. provides software solutions that provide real-time operational intelligence in the United States and internationally. It offers Splunk Enterprise, a machine data engine with collection, indexing, search, reporting analysis, and data management capabilities that allows dynamic schema creation on the fly, enabling users to run queries on data without having to understand the structure of the data prior to collection and indexing; and Splunk Cloud service, which delivers the functionalities of Splunk Enterprise as a cloud service, as well as develops and sells apps, such as the Splunk App for Enterprise Security and the Splunk App for VMware. The company also provides Splunk Storm, a service offered as a self-provisioned service for cloud-based developers; and Hunk, a Splunk Analytics for Hadoop, for interactively exploring, analyzing, and visualizing data stored in Hadoop. In addition, it offers services, such as maintenance and customer support, training, and consulting and implementation services. Splunk is one of the leaders of the big data movement from an analytics point of view.

Splunk is valued at $7bn and has a forward p/e of 450 and a p/s of 18. It is 40% off its post IPO high but bouncing back.

Symantec (SYMC)
Symantec Corporation, together with its subsidiaries, provides security, backup, and availability solutions worldwide. Its products and services protect people and information in any environment from mobile devices and enterprise data centers to cloud-based systems. The company operates in three segments: User Productivity & Protection; Information Security; and Information Management. The User Productivity & Protection segment provides Norton solutions, endpoint security and management, encryption, and mobile offerings. The Information Security segment offers secure socket layer certificates, authentication, mail and Web security, data center security, data loss prevention, and information security services offerings that help its customers ensure their confidential information is secure wherever it resides in the network path, from the user?s device to the data?s resting place. The Information Management segment focuses on backup and recovery, archiving and eDiscovery, storage, and high availability solutions helping to ensure that its customers? IT infrastructure and mission-critical applications are protected, managed, and available. Symantec is under threat from next generation security providers as well as establishment threats (for instance there is talk of ban in China)

Symantec is valued at $17bn and has a p/e of 19, a forward p/e of 12 and a p/s of 2.5. It is close to a 10 year high.

Tibco (TIBX)*
One of the earliest big data/fast data players and led by one of the top CEOs in the world, TIBCO Software Inc. provides infrastructure and business intelligence software worldwide. The company offers products in the areas of integration and core infrastructure; business optimization; and process automation and collaboration. Its integration and core infrastructure product line helps organizations integrate their disparate systems and move towards flexible infrastructure comprising services or discrete data components that can be assembled, orchestrated, and reused; enables the creation, management, and virtualization of heterogeneous services; and provides a unified environment for policy and service management. The company?s business optimization software tracks large volumes of real-time events as they occur and applies rules in order to identify patterns that signify problems, threats, and opportunities; automatically initiates appropriate notifications or adaptations of processes; and helps employees to perform their jobs, managers to identify and analyze problems and aberrations, and executives to spot opportunities and risks. Its process automation and collaboration software helps organizations coordinate manual and automated process flows that span their business; enables employees to collaborate in real-time using social media; and coordinates the human and electronic resources inside a business and its network of customers and partners. The company also provides professional services, which include consulting services, such as systems planning and design, installation, and systems integration; maintenance and support; training; and hosted services. Whilst Spotfire is still a high performing competitive offering, Tibco is facing shareholder activism to deliver value with a potential company sale.

Tibco has a market cap of $3.5bn, a p/e of 42, a forward p/e of 22 and a p/s of 3. It is 1/3rd down from its 10 year high and a long way off its dotcom era valuation.

VMWare (VMW)
VMware, Inc. provides virtualization infrastructure solutions in the United States and internationally. The company?s virtualization infrastructure solutions include a suite of products designed to deliver a software-defined data center, run on industry-standard desktop computers and servers and support a range of operating system and application environments, as well as networking and storage infrastructures. Its solutions enable organizations to aggregate multiple servers, storage infrastructure, and networks together into shared pools of capacity that can be allocated to applications as needed. It offers VMware vSphere, a software-defined data center platform, which enables users to deploy hypervisor, a layer of software that resides between the operating system and system hardware to enable compute virtualization; and vCloud Suite, an integrated solution for building and managing a cloud infrastructure optimized for use with the VMware vSphere platform. The company also provides vSphere-based hybrid cloud computing solutions; and end-user computing solutions, which are designed to enable a user-centric approach to personal computing, and secure access to applications and data from various devices and locations. EMC still owns a large proportion of this company and their fortunes are intertwined.

VMWare is capitalized at $41bn, has a p/e of 40, a forward p/e of 23 and a p/s of 7.5. It is 15% down from its 52 week high.

Zix Corporation (ZIXI)
Zix Corporation provides email encryption, data loss prevention (DLP), and Bring-Your-Own-Device solutions to the healthcare, financial services, insurance, and government sectors in the United States. The company offers Zix Email Encryption, a software-as-a-service solution that allows an enterprise to use policy-driven rules to determine, which email messages should be sent securely to comply with regulations or company-defined policies. It also provides ZixDirectory, an email encryption community to share identities; ZixCorp?s Best Method of Delivery, which is designed to deliver email according to the sender?s encryption policy; and ZixGateway, an enterprise gateway that automatically decrypts the message. In addition, the company offers ZixDLP, an email-specific data loss prevention solution that reduces deployment time from months to hours and minimizes impact on customer resources and workflow; and ZixOne, a mobile email app, which provides access to corporate email while never allowing that data to be persistently stored on the device where it is vulnerable to loss or theft.

Zix has a market cap of $240m, has a p/e of 21 and a p/s of 4. It sits 25% below its 52 week high and continues to grow revenues 10% YoY.

Service Operators/Providers

Akamai Technologies (AKAM)
Akamai Technologies, Inc. provides cloud services for delivering, optimizing, and securing online content and business applications in the United States and internationally. The company offers media delivery solutions that are designed to enable enterprises to execute digital media and software distribution strategies, including HTTP delivery network that supports progressive media downloading and adaptive bitrate streaming to various player platforms; cloud-based media streaming and distribution solutions; and analytics solution that is designed to provide customers with quality of service and other measurement capabilities for post event analysis, real-time quality awareness, and the ability to troubleshoot issues to the individual viewer level. Its media delivery solutions also include Software Distribution solution, which handles the distribution of software for its customers, as well as tools to enhance the effectiveness of distribution model. The company also offers performance and security solutions, including Ion solution, which consists of an integrated suite of delivery, acceleration, and optimization technologies; Dynamic Site Accelerator that provides global delivery, load balancing, and storage of content and applications; Alta, an application management service and Web accelerator; Site Defender, a cloud computing security solution; Web Application Firewall service; solutions focused on monitoring, detecting, preventing, and mitigating distributed denial of service attacks on Internet traffic; and network operator solutions that are designed to help carriers operate a network that capitalizes on traffic growth and new subscriber services. In addition, it provides professional services and solutions. The company markets and sells its services and solutions through direct sales and services organization; and through active channel partners.

Akamai is a $10bn market cap company with a p/e of 37, a forward p/e of 21 and a p/s of 6. It is tripled in the last 2 years and seen a 6x rise from its GFC low. It is sitting at a 10 year high.

Amazon (AMZN)
Leaving aside the e-tailing business, In addition, the company serves developers and enterprises through Amazon Web Services, which provides access to technology infrastructure that enables virtually various businesses. Amazon’s market cap is $160bn but is a challenge to value on a p/e basis. Amazon is about 15% below its 52 week high. The e-tailing part of the business though if you accept as the ultimate cloud play then is also part of the equation if not then whilst certainly a player is not a pure play.

Arista Networks (ANET)
Arista Networks, Inc. provides cloud networking solutions for datacenter and cloud computing environments. The company offers extensible operating systems, a set of network applications, and Ethernet switches. It serves a range of industries, including Internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, and others through its direct sales force and channel partners. The company has strategic relationship with VMware, Inc. to enhance the adoption of network virtualization.

Arista has been rising strongly since its IPO this year and is capitalized at $5.6bn and is valued at a p/e of 100, a forward p/e of 64 and a p/s of 12.

Cogent (CCOI)
Cogent Communications Holdings, Inc., through its subsidiaries, provides high-speed Internet access and Internet protocol communications services primarily to small and medium-sized businesses, communications service providers, and other bandwidth-intensive organizations in North America, Europe, and Japan. It offers on-net Internet access services to bandwidth-intensive users, such as universities, other Internet service providers, telephone companies, cable television companies, Web hosting companies, content delivery network companies, and commercial content and application providers; and to corporate customers located in multi-tenant office buildings, including law firms, financial services firms, advertising and marketing firms, and other professional services businesses. The company also provides its on-net services in carrier-neutral co-location facilities, company controlled data centers, and single-tenant office buildings. In addition, it offers off-net services to businesses that are connected to its network primarily by means of ?last mile? access service lines obtained from other carriers primarily in the form of point-to-point carrier Ethernet, TDM, POS, SDH, and/or carrier Ethernet circuits. Further, the company provides Internet connectivity to customers that are not located in buildings directly connected to the company’s network, as well as offers voice services.

Cogent is a $1.6bn company with a p/e of 28 a forward and a p/s of 4. It is 25% of its 52 week high

CoreSite Realty (COR)
CoreSite Realty Corporation engages in the ownership, acquisition, construction, and management of data centers. The data centers are specialized and secure buildings that house networking, storage, and communications technology infrastructure, including servers, storage devices, switches, routers, and fiber optic transmission equipment. These buildings provide the power, cooling, and network connectivity to operate this mission-critical equipment. The company?s data centers are located in Los Angeles, the San Francisco Bay and northern Virginia areas, Chicago, Boston, New York City, and Miami. CoreSite Realty Corporation serves telecommunications carriers, content and media entertainment providers, cloud providers, enterprise customers, financial and educational institutions, and government agencies. As of December 31, 2011, its property portfolio included 12 operating data center facilities and 1 development site. The company is qualified as a real estate investment trust (REIT) under the Internal Revenue Code.

CoreSite has doubled in 5 years and sits at an all time high with a market cap of $750m and a p/e of 68 and a p/s of 3.

DuPont Fabros (DFT)
DuPont Fabros Technology, Inc., a real estate investment trust (REIT), engages in the ownership, acquisition, development, operation, management, and lease of large-scale data center facilities in the United States. The company leases its data centers to the American and international technology companies to house, power, and cool the computer servers that support their critical business processes. It also provides certain technical services to tenants, including layout design and installation of electrical power circuits, data cabling, server cabinets and racks, computer room airflow analyses, and monitoring. As of December 31, 2011, the company owned and operated seven data centers located in Northern Virginia; one data center in suburban Chicago, Illinois; one data center in Piscataway, New Jersey; one data center in Santa Clara, California.

Valued at $1.9bn which is at its 52 week high, it sports a p/e of 57 and a p/s of 4.8. It also yields a 5.1%!

Digital Realty Trust (DRT)
Digital Realty Trust, Inc., a real estate investment trust (REIT), through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. It focuses on strategically located properties containing applications and operations critical to the day-to-day operations of technology industry tenants and corporate enterprise datacenter users, including the information technology departments of Fortune 1000 companies, and financial services companies. The company?s property portfolio consists of Internet gateway properties, corporate datacenter properties, technology manufacturing properties, and regional or national offices of technology companies. As of December 31, 2008, Digital Realty?s portfolio consisted of 75 properties, including 62 located in North America and 13 located in Europe.

Also offering a yield of 5%+ DRT is valued at $9bn has a p/e of 30 but a forward p/e of 12 and a p/s of 6.

DataLink (DLK)
Datalink Corporation designs, installs, and supports data center solutions to mid and large-size companies. The company is involved in assessing, designing, deploying, managing, and supporting unified infrastructures comprising servers, storage, and networks; and reselling hardware and software from original equipment manufacturers. Its portfolio of solutions and services include consolidation and virtualization services that enable organizations to share server and storage resources; and data storage and protection solutions, such as network-attached, direct-attached, private cloud-based storage, local and remote backup, disaster recovery, archive, and compliance. The company also offers network infrastructure review services, which include an assessment of a customer’s current network design, recommendations for improvement, and a roadmap for migrating to consolidated and converged network; contracts administration services; and business continuity and disaster recovery solutions. In addition, it provides a suite of practice-specific consulting, analysis, design, implementation, management, and support services.

Despite a 50 year history it is growing revenues at 20%, has a market cap of only $280m and a p/e of 27 and a p/s of 0.5. It is 15% off its 52 week high which is a 10 year high although still down from its dotcom peak.

Equinix (EQIX)
Equinix, Inc. provides data center services to protect and connect the information assets for the enterprises, financial services companies, and content and network providers primarily in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. It connects companies directly to their customers and partners in networked data centers through the Equinix interconnection platform. The company provides colocation services and related offerings, including operations space, storage space, cabinets, and power for customers? colocation needs; interconnection services comprising physical cross connect/direct interconnections, Equinix Internet Exchange, Equinix Metro Connect, Internet connectivity services, and Ethernet exchange services; and managed IT infrastructure services, including installation of customer equipment and cabling, as well as equipment rebooting and power cycling, card swapping, and emergency equipment replacement services. It connects approximately 4,500 companies, which comprise cloud and IT services providers, content providers, financial companies, global enterprises, carriers, and mobility and other bandwidth providers.

Valued at $10bn EQIX is just below its 52 week high priced at a p/e of 100, a forward p/e of 40 and a p/s of 5.

International Business Machines Corporation provides information technology (IT) products and services worldwide. The company?s Global Technology Services segment provides IT infrastructure and business process services, including outsourcing, process, integrated technology, cloud, and technology support. Its Global Business Services segment offers consulting solutions for strategy and transformation, application innovation, enterprise applications, and smarter analytics; and application management, maintenance, and support services. International Business Machines Corporation?s Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; and information management software for database and enterprise content management, information integration, data governance, data warehousing and analytics, business analytics and intelligence, and predictive analytics. This segment also provides Tivoli software for cloud and datacenter management, enterprise endpoint and mobile device management, asset and facilities management, storage management, and security systems; Rational software that supports software development; and Mobile Software for platform and application development, mobile security, and mobile device management. The company?s Systems and Technology segment provides computing power and storage solutions; and semiconductor technology, products, and packaging solutions. Its Global Financing segment provides lease and loan financing to end users; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services for equipment.

IBM sits near its all time high at a $190bn capitalization with a p/e of 13 and a p/s of 2.

Level 3 (LVLT)
Level 3 Communications, Inc., together with its subsidiaries, operates as a facilities-based provider of a range of integrated communications services primarily in North America, Latin America, Europe, the Middle East, and Africa. The company provides core network services, including transport services comprising wavelengths, private lines, transoceanic services, and dark fiber, as well as related professional services; and colocation and data center services, such as cloud, hosting, and application management solutions. It also offers Internet protocol (IP) and data services comprising high speed IP, Internet access, virtual private network, content delivery network, media delivery, Vyvx broadcast, converged business network, and security services; local and enterprise voice services consisting of voice over IP enhanced local service, SIP trunking, local inbound, primary rate interface, long distance, and toll free services; and collaboration services, such as audio, Web, and video conferencing services. In addition, the company provides wholesale voice services, including long distance voice termination and toll free services. It primarily serves enterprises, multinational customers, portals and large search enterprises, regional service providers, systems integrators, and software service providers; online gaming providers, social networking providers, technology companies, and companies that provide video over the Internet; media conglomerates, programmers, studios and production companies, and broadcast station ownership groups; sports teams, and stadiums and venues; governments; and carriers, voice service providers, wireless providers, and broadband cable television operators.

Level 3 has a market cap of $10bn, p/e of 125, a forward p/e of 23 and a p/s of 1.7. It currently sits 10% off its 52 week high which is also a 10+ year post dotcom boom high.

Mitel Networks (MITL)
Mitel Networks Corporation provides business communications and collaboration software and services primarily to the small-to-medium sized enterprise market in the United States, Europe, the Middle East and Africa, Canada, Caribbean and Latin America, and Asia-Pacific regions. Its Mitel Communications Solutions segment provides a range of Internet protocol (IP) telephony platforms, and unified communication and collaboration (UCC) solutions to organizations. Its IP-based communications solutions include a combination of IP telephony platforms offered as software, appliances, and desktop devices; and UCC applications that integrate voice, video, and data communications with business applications. This segment also offers support, professional, and managed services. The company?s Mitel NetSolutions segment focuses on delivering a suite of subscription-based telecommunications solutions and services to business customers, including cloud-based/hosted applications, network services, and connectivity. Its services include MiCloud Business and MiCloud Enterprise, a cloud-based service that enables business customers to fulfill their communications requirements without the need to own and maintain a traditional phone system; Mitel Mobile Solutions, which provides business-class 3G and 4G wireless voice, text, and Internet services; and Mitel NetSolutions Voice and Data, which provides businesses with voice and data communication services in the United States. The company?s Other segment sells products and services related to its unified communications solutions. It serves a range of industry vertical markets, including education, government, healthcare, hospitality, and retail. The company sells its products directly, as well as through agents and strategic technology partnerships. Mitel Networks Corporation has strategic alliances with VMware, Inc. and Vidyo, Inc

It is valued at $1bn, has a forward p/e of 8 and a p/s of 1.3. It is 15% below its 52 week high even though it has achieved a 5x return in 2 years.

Service Now (NOW)
ServiceNow, Inc. provides cloud-based services to automate enterprise IT operations primarily in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company offers IT service automation applications, including incident management, problem management, change management, release management, request management, configuration management, asset management, project portfolio, software development lifecycle management, IT cost management, work management, vendor performance management, and resource management, as well as IT governance, risk, and compliance; case management applications, such as HR service automation that provide capabilities to manage the service delivery of human resources departments; and options and add-ons services, such as performance analytics and discovery services, as well as orchestration core, cloud provisioning, password reset, and configuration automation applications. It also offers custom application development products, including CreateNow development suite, a browser-based set of tools to manage the entire lifecycle of an application from creation to deployment. In addition, the company provides implementation services, training and certification solutions, and technical support services.

Having tripled in 3 years Now stands at a $9bn market cap (10% below its 52 week high) with a forward p/e of 300 and a p/s of 16.

Proofpoint (PFPT)
Proofpoint is an interesting combination of a software solution delivered as a cloud based service provider to secure the cloud for clients. Proofpoint, Inc. provides threat protection, regulatory compliance, archiving and governance, and secure communication solutions worldwide. The company’s integrated suite of on-demand security-as-a-service solutions enable large and mid-sized organizations to defend, protect, archive, and govern their sensitive data. Its security-as-a-service platform includes Proofpoint Enterprise Protection, a communications and collaboration security suite designed to protect customers' mission-critical messaging infrastructure from outside threats, including spam, phishing, unpredictable email volumes, malware, and other forms of objectionable or dangerous content before they reach the enterprise; and Proofpoint Enterprise Privacy, a data loss prevention, encryption, and compliance solution that defends against leaks of confidential information, and enables compliance with the United States, international, and industry-specific data protection regulations. The company also offers Proofpoint Enterprise Archive & Governance, which enables enforcement of data governance, data retention, and supervision policies and mandates; cost effective litigation support; and active legal hold management. In addition, it provides Proofpoint Essentials, a suite of security-as-a-service security and compliance solutions designed for distribution to managed service providers and dedicated security resellers. The company’s platform services comprise content inspection, reputation, encryption and key management, notification and workflow, and analytics and search services.

PFPT is valued at $1.5bn (10% below its all time high), has a p/s of 8 and is growing at 30% per year.

Qualys (QLYS)
Qualys, Inc. provides cloud security and compliance solutions to enterprises, government entities, and small and medium-sized businesses in the United States and internationally. The company offers QualysGuard cloud suite of solutions, such as Vulnerability Management, Web Application Scanning, Malware Detection Service, Web Application Firewall, Policy Compliance, PCI Compliance, and Qualys SECURE Seal. Its integrated suite of security and compliance solutions delivered on its QualysGuard Cloud Platform enables customers to identify their IT assets, collect and analyze large amounts of IT security data, discover and prioritize vulnerabilities, recommend remediation actions, and verify the implementation of such actions. It also provides QualysGuard core services, including asset tagging and management, reporting and dashboards, questionnaires and collaboration, remediation and workflow, big data correlation and analytics engine, and alerts and notifications, which enable integrated workflows, management and real-time analysis, and reporting across IT security and compliance solutions. In addition, the company offers QualysGuard cloud infrastructure services that include the data, data processing capabilities, software and hardware infrastructure, and infrastructure management capabilities.

Qualys has a more reasonable valuation of $800m, a p/e of 443, a forward p/e of 60 and a p/s of 7. It is growing at 20% YoY and is 20% below its peak.

Syntel (SYNT)
Syntel, Inc. provides information technology (IT) and knowledge process outsourcing (KPO) services worldwide. The company operates in four segments: Applications Outsourcing, KPO, e-Business, and TeamSourcing. The Applications Outsourcing segment provides outsourcing services for ongoing management, development, and maintenance of customers? business applications. The KPO segment offers outsourced solutions for knowledge and business processes. This segment focuses on middle and back-office business processes of the transaction cycle in capital markets, banking, healthcare, and insurance industries. The e-Business segment provides technology services in the areas of architecting, implementing and maintaining, Web solutions, data warehousing, business intelligence, enterprise application integration, business process management, and enterprise resource planning solutions. It also offers technologies, such as mobility, enterprise data management, and big data analytics. The TeamSourcing segment provides professional IT consulting services to customers on a staff augmentation basis. Its services include systems specification, design, development, implementation, and maintenance of complex IT applications involving computer hardware, software, data, and networking technologies and practices.

Syntel is valued at $3.7bn, has a p/e of 16 and a p/s of 4. It is 10% off its 52 week high having risen 9x in the last 10 years and continues to grow revenues at 15% YoY.

Vodafone (VOD)
Vodafone Group Plc operates as a telecommunications company worldwide. It offers voice, messaging, data, and fixed broadband services; unified communication solutions; Vodafone One Net, a converged service, which combines fixed and mobile services for various businesses; carrier voice and data products; machine-to-machine connection services; and cloud and hosting services, such as co-location, managed hosting, private and public cloud services, messaging services, and software-as-a-service applications. The company also provides M-PESA, a money transfer service that enables customers with limited access to bank accounts to send and receive money, top-up airtime, and make bill payments; smartphones and tablets; and mHealth solutions for healthcare providers. In addition, it offers hosting and cloud services, including managed hosting solutions, as well as cloud computing, co-location, server and Website hosting, storage, and security. The company serves approximately 434 million mobile and 9 million fixed broadband customers. Once the largest mobile telco player in the world and still one of the largest without Verizon mobile, no company stands to gain more than Vodafone from the 20x traffic increase expected from big data through to 2020.

VOD is capitalized at $88bn, has a forward p/e of 28 and a p/s of 1.4.

ViaSat (VSAT)
ViaSat, Inc. provides high-speed fixed and mobile broadband services; advanced satellite and other wireless networks; and secure networking systems, products, and services worldwide. The company?s Satellite Services segment provides retail and wholesale broadband satellite services under the Exede and WildBlue brand names, which offers two-way satellite-based broadband Internet access and voice over Internet protocol to consumers and small businesses. It also provides mobile broadband services comprising network management and high-speed Internet connectivity services for customers using airborne, maritime, and ground mobile satellite systems; and enterprise broadband services. As of April 4, 2014, this segment provided broadband satellite services to approximately 641,000 subscribers. Its Commercial Networks segment offers fixed satellite networks that comprise satellite network infrastructure and ground terminals designed to access Ka-band broadband services; mobile broadband satellite communication systems; and antenna systems for terrestrial and satellite applications, such as geospatial imagery, mobile satellite communication, Ka-band gateways, and other multi-band antennas. This segment also provides design and technology services, including analysis, design, and specification of satellites and ground systems; ASIC and MMIC design and production; and wide area network compression for enterprise networks. The Company?s Government Systems segment offers government satellite communication systems, including various broadband modems, terminals, network access control systems, and antenna systems; information security and assurance products, and secure networking solutions; and tactical radio and information distribution systems to enable real-time collection and dissemination of secure real-time digital information between command centers, communications nodes, and air defense systems.

ViaSat has a market cap of $2.7bn and a forward p/e of 34 and a p/s of 2. It continues to grow at 20% YoY.

Cloud or Big data based end businesses

Concur Technologies (CNQR)
Concur Technologies, Inc. provides integrated travel and expense management solutions for companies worldwide. Its cloud computing solutions help companies and their employees to control costs, save time, and boost productivity by streamlining the expense management, travel procurement, itinerary management, and invoice management processes. The company offers integrated travel and expense management solutions to encourage user adoption, enhance policy compliance, and deliver visibility into corporate travel spend; and travel procurement solutions that enable customers to search for travel reservation data from multiple sources. It also provides itinerary management solutions that enable individual business travelers and their organizations to manage and share travel itinerary information; and expense management solutions, which provide the process and information that enables management to reduce manual processing, improve internal controls, increase business policy compliance, speed up reimbursement, and increase expense report accuracy. In addition, the company offers other value-added and extended services, such as expense reimbursement services; expense report auditing services to streamline the process of managing and substantiating expense receipts; business intelligence services that enable customers to use captured data to analyze trends, influence budget decisions, improve forecasting, and monitor for fraudulent activity; and invoice management solutions to automate, simplify, and reduce the costs, as well as professional services.

Concur is a $6bn company with a forward p/e of 110 and a p/s of 9. It is 15% off its high and it is the definitive high margin cloud business with blue chip clientele.

Sales Force (CRM), inc. provides enterprise cloud computing solutions to various businesses and industries worldwide. The company offers social and mobile cloud apps and platform services, including Sales Cloud for sales force automation, which enables companies to grow their sales pipelines, close deals, improve sales productivity, and gain business insights; Service Cloud that enables companies to connect with their customers and address their service and support needs; Marketing Cloud, which enables companies to bring in data from any source and deliver personalized interactions to any customer across any channel through email, mobile, social, Web, marketing automation, and data analytics from a single platform; and Salesforce1 Platform, a cloud platform for developing customer apps. It also provides professional services, including consulting, deployment, training, implementation, integration, and campaign services to its customers to facilitate the adoption of its social and mobile cloud solutions., inc. sells and markets its services primarily through its direct sales force, as well as through global consulting firms, systems integrators, and regional partners. The company has a strategic alliance with Koninklijke Philips N.V. to develop and deliver an open cloud-based healthcare platform.

Possibly the ultimate cloud company Sales Force is a $37bn corporation which has unbelievably had a 6x (that should have been an obvious steal looking back) in the last 5 years sits 10% off its all time high with a forward p/e of 83 and a p/s of 7.6.

IMS Health (IMS)*
Ims was perhaps the first big data company – before even the phrase was coined, given that it has been running one of the largest datasets on the planet. IMS Health Holdings, Inc. provides information, services, and technology to the healthcare industry worldwide. The company develops healthcare measurement solutions, such as IMS LifeLink program that provides data sourced from longitudinal prescriptions, medical claims, and electronic medical records; IMS NPA Market Dynamics, a national prescription audit program; IMS Xponent Prescribing Dynamics, a solution that allows clients to segment and identify physicians, refine messages, adapt and change tactics, and align sales compensation metrics; IMS PlanTrak Market Dynamics, which integrates with patient-level data providing payer and plan level visibility within key performance indicators separating new, switch, and repeat prescriptions; and Specialty Market Dynamics that integrates patient-level data from specialty pharmacy providers, retail pharmacies, and mail service suppliers to help clients in measuring, monitoring, and benchmarking specialty market performance. The company also provides consumer health insights, forecasting solutions, payer insights, pharmaceutical measurement solutions, and publications. In addition, it offers healthcare analytics and services that include specialty healthcare analytics, pharmaceutical R and D services, government solutions, business process outsourcing solutions, patient-centric solutions, pharmaceutical commercial services, and payer solutions; and consulting services. The company also serves pharmaceutical, payers, government, providers, pharmacies, consumer health, pharmaceutical distribution, and financial community sectors. IMS Health Incorporated has a strategic alliance with BroadReach Healthcare. IMS is not only the definitive big data company but is also moving its business model into a cloud based operation.

IMS has a ~$10bn valuation and sits at a post IPO high. It has a p/e of 65, a forward p/e of 17 and a p/s of 3.5

Veeva (Veev)
Veeva Systems Inc. provides industry-specific cloud-based software solutions for the life sciences industry in North America, Europe, the Asia Pacific, and Latin America. The company?s solutions enable pharmaceutical and other life sciences companies to realize the benefits of cloud-based architectures and mobile applications for various business functions. Its industry cloud solutions include Veeva CRM for customer relationship management that enables physician-facing employees, such as pharmaceutical sales representatives, key account managers, and scientific liaisons to manage, track, and optimize interactions with healthcare providers in various communication channels utilizing a single integrated solution; and Veeva Vault, a cloud-based content management and collaboration solution for its customers to manage content-centric processes in various departments within a life sciences company, including clinical trials, quality management, manufacturing, sales, and marketing. The company?s industry cloud solutions also comprise Veeva Network, a cloud-based customer master solution to help life sciences companies in creating and maintaining a record of the healthcare professionals and healthcare organizations with which they interact. In addition, it offers professional and support services in the areas of implementation and deployment planning, and project management; requirements analysis, solution design, and configuration; systems environment management and deployment; training; and ongoing managed services, such as outsourced systems administration. The real question for Veeva is whether they can continue to grow or whether they have saturated the industry without reaching any level of value.

Veeva has a market capitalization of $4bn and has a p/e of 178, a forward p/e of 78 and a p/s of 14. They are 40% off their high.

Workday (WDAY)
Workday, Inc. provides enterprise cloud applications for global human resources and finance in the United States and internationally. It offers applications for customers to manage critical business functions that enable them to optimize their financial and human capital resources. The company provides Workday Human Capital Management application that includes global human resources management comprising workforce lifecycle management, organization management, compensation, absence, and employee benefits administration; and global talent management consisting of goal management, performance management, succession planning, and career and development planning, as well as project and work management designed to enable organizations to create and manage and track initiatives, build project plans, and utilize project breakdown structures that include phases, tasks, and milestones. It also offers Workday Payroll, a payroll application designed to address the enterprise payroll needs by allowing customers to group employees, manage calculation rules, and pay employees according to their organizational, policy, and reporting needs; and Workday Financial Management tools that provide the core finance functions of general ledger, global accounting, revenue management, accounts payable, employee expense management, and accounts receivable, along with tools to help organizations manage their cash, assets, contracts, grants, expenses, procurement, and support their financial reporting requirements, as well as offer management reporting and analysis in real time.

Workday is valued at $17bn, sports a p/s of 26 but no earnings in sight.

Some possible questions to kick around could include:

Are there any omissions, corrections or clarifications?
Which plays have the greatest potential?
Which have significant and sustainable competitive advantages and moats to their businesses?
Which will likely reward shareholders the most?
How does our investment thinking align with the conclusions of this thesis?

Now can we have some discussion this time please?

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