newsinsights

Browse our recent blogs, articles and papers below and sign up here for our regular newsletter. 

Cloud Technology Monthly Report | October

 

Cloud Technology ETF Monthly Report: Key Takeaways

 

  • Total Global Cloud spending will exceed $1.3 trillion by 2025 - annualized growth rate (CAGR) of 17%. [1]
  • New Wireless communications - 5G, R16 & R17, pushing cloud adoption broader & deeper. [2]
  • Multi/Hybrid Cloud is increasingly popular due to open architecture enabling more firms to switch. [3]
  • Big US banks making significant bet on the Cloud - due to its speed, scalability and resilience. [4]
  • Wells Fargo bank deal - shift away from private data centres to the Public Cloud. [5]
  • Morgan Stanley shifting workloads to Microsoft’s Azure cloud. Capital One bank using Amazon Web Services. [6]
  • Asian Cloud usage fast tracked for digital entertainment/streaming – likely fastest growing region in 2022. [7] 
  • Demand surging still due to COVID and WFH - work, school & social activities increasingly digital. [8]
  • SaaS (Software as a Service) will continue to receive ~50% of Cloud spending. [9]
  • SKYY’s expanded holdings from 50 to 75 - representative of Cloud industry with SaaS holdings (Software as a Service) now the largest weighting at 66%, PaaS 20% and IaaS 14%.
  • Now EU Article 8 compliant for ESG.  
  • Globally diversified - US exposure 77.2%, followed by China 7.8%, Israel 3.6%, Germany 2.8% and Japan 2.2%.
  • Equal Weight captures smaller, innovative Cloud companies. Each holding averages 1.3%.
  • Microsoft to launch its cloud gaming service on Xbox consoles shortly. [10]

 

Macro Outlook

IDC forecasts total Cloud ("whole") spending will surpass $1.3 trillion by 2025 while sustaining a compound annual growth rate (CAGR) of 16.9%. [11]

The trend to move to more hybrid/multi-cloud platforms and infrastructure is becoming more apparent. Salesforce, IBM and SAP are expected to benefit from this open architecture - allowing the easy flow of data across multiple Clouds. Multi-cloud platforms ensures more businesses can adopt Cloud services to scale up faster. GinsGlobal believe multiple cloud platforms allow the faster movement of data.  

Cloud spending across healthcare and banking is seeing a big increase in demand – with recent deal by Morgan Stanley and Wells Fargo. [12] Enhanced mobile banking experiences and healthcare transformation will soon emerge. The majority of IT corporate spend is moving away from onsite hardware and servers to remote Cloud usage [13] with data centre chip revenues and Hyperscale Cloud seeing significant revenue boosts during COVID. [14]

Cloud spending is set to grow further as remote work habits set in. Cloud computing is arguably the centrepiece of the world’s technical response to the COVID-19 crisis. Gaming and online Video streaming continues to boost cloud usage.  Gaming is now significantly larger than the size of Hollywood’s Box office. [15]

Cloud security firms continue to be rerated upwards, benefiting from the increased spending following the growing number of cybersecurity/hack attacks. Those involved in the detection and prevention of major cyber-attacks are increasingly acquisition targets. [16]

SaaS (Software as a Service) will continue to dominate Cloud spending (see chart below).  Infrastructure- and Platform as a Service areas together currently represent the remaining ~50% of Cloud computing revenues. [17]

AI, analytics, security, IoT, and Edge Computing - likely key differentiators among the top cloud service providers, along with serverless and managed services.

Cloud security firms are benefiting from increased spending in response to the growing number of hacking and cybersecurity attacks. [18] 

IDC confirms SaaS as the largest spending category, representing over half of all public cloud spending.  IaaS is reported as the second largest spending category and is the fastest growing with a projected five-year CAGR of 32.0%. PaaS is the lowest spending category, with the second largest five-year CAGR of 29.9%. [19]

The flexibility of Cloud contracts and improved US COVID situation has increased corporate confidence in committing to multi-year contracts.

For 2021, leading contributors for our cloud computing ETF are shown below.

 

 

Cloud Technology ETF Performance (As of 30.09.2021)

 

 

1M

3M

6M

YTD

12M

2Y

SI

HAN-GINS Cloud Technology UCITS ETF 

-4.52%

-5.16%

5.76%

7.63%

16.73%

54.55%

65.31%

Solactive Cloud Technology

-4.48%

-5.05%

6.05%

-21.69%

17.34%

56.28%

67.89%

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 30/09/2021. Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. 

 

Learn more about our Cloud Technology ETF

Tell us how we can help