Trends in Tech Stocks Featured at William Blair Client Event

Friday, May 5, 2017

The technology sector is poised for explosive growth as more and more companies turn to cloud computing to manage their businesses, William Blair equity analyst Bhavan Suri told clients during a firm luncheon on May 3 in Chicago.

"The cloud" is a term used to describe "the internet," so cloud computing is internet-based computing where servers, storage, databases, software, and more are delivered over the internet. Users do not host, maintain, or upgrade their own servers. Instead, they easily manage billing, inventory, customer service, and other tasks in the cloud. The systems are rented from computing services companies such as Amazon, Microsoft, or Google, and billed similar to using water or electricity.  

"We are going to shift our systems from being managed by us, clunky and hard to upgrade, to really useable systems that someone else will manage for us," Suri told the group. "It drives companies’ economics who choose to do it—and will drive innovation."

The public cloud market is expected to grow at a compound annual rate of 18% from 2014 to 2018, compared with the expected 4% growth rate of the overall enterprise software market over the same period, he said.

Suri, co-group head of the firm's technology sector, said the companies providing cloud-computing products and services that he and his team are following include Amazon.com, Alarm.com Holdings, Atlassian Corporation, HubSpot, salesforce.com, and Talend S.A.

William Blair equity research features the insights of award-winning analysts who follow more than 630 companies. Analysts look for companies that can sustain annual earnings gains of 15% or more over the long term, with an emphasis on small- and midcap stocks.

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