There is no doubt that the market in India has welcomed cloud technologies with open arms. It is estimated that by next year, the cloud computing market will grow to reach $13 billion. With such growth, cloud computing companies on the Indian stock exchange are sure to see their shares rise too.
Seeing as India has a well-established IT industry to boast, a lot of the companies in the industry will undoubtedly benefit from the growth of cloud computing. For traders, investing in these companies will help them access the benefits that come with the cloud sector's growth.
What is Cloud Computing Stocks
Here are a few basics about cloud computing stocks that investors should be aware of:
Cloud computing stocks are stocks of companies engaged in providing cloud-based services, delivered over the internet.
These services include storage, software, databases, etc
Cloud computing companies have enabled businesses to access and make use of various technological resources in a more flexible and scalable manner.
By engaging with cloud computing companies, businesses can do away with large investments in hardware or complex infrastructure mechanisms.
One of the main reasons the cloud computing industry is growing at the pace it is because of digital transformation.
Cloud computing helps provide efficient, cost-effective solutions.
This is one of the main reasons that cloud computing stocks are becoming more and more attractive investment options,
Cloud computing stocks have the potential to offer investors long-term growth and significant returns.
Additional Read: What is Trading Account: Definition, Types & Benefits
Criteria for Selecting the Best IT Cloud Computing Stocks
When trying to pick the best IT cloud computing stocks, it is important to be aware of a few parameters. These parameters will help investors determine which cloud computing stock has the most potential for growth and higher returns. Below is a list of things to keep in mind when taking your pick:
Every cloud computing company has a specific niche they focus on
This niche should be analyzed by investors
Niches like SaaS, PaaS, or infrastructure are some of the most popular ones
Post determining the niche, investors need to recognize its growth potential
This will help determine the possibility of that specific cloud computing stock growth as well.
Cloud computing companies that have tie-ups with industry leaders like Amazon, Microsoft, Google etc will hold more profitable stocks
With the help of such partnerships, cloud computing stocks of particular companies can gain access to new markets and gain more value.
Before investing in a cloud computing stock, investors need to make sure that its parent company is financially stable and has the potential for further growth.
Investors need to analyze where a company stands in the market.
This will help investors determine how a company’s market share is doing and if it can boast of having a competitive edge.
The cloud computing stocks of a company having a strong foothold in the market will be more likely to produce higher returns.
If a cloud computing company has an extensive client base, then investors can safely determine that the company has revenue stability.
The client base of a company also points towards its ability to attract and retain customers.
Detailed Analysis of Top IT Cloud Computing Stocks in India
Here is the list of the top IT cloud computing stocks in India:
Tata Consultancy Services (TCS)
Tata Consultancy Services sits at the top of the Indian IT industry
TCS reigns supreme when it comes to cloud computing.
The company provides its clients with a range of cloud solutions.
This includes software-as-a-service or SaaS and platform-as-a-service or PaaS among other things.
TCS supports businesses across the world with digital transformation.
Infosys
Another crucial entity in the Indian IT sector is Infosys.
The company has its focus on offering various cloud services.
From application development and infra management to migration services, Infosys provides it all
With its expertise and advanced technologies, Infosys helps businesses transition to the cloud to help boost their overall efficiency
Wipro
Wipro is no doubt popular in the Indian IT scene but it also is a major part of the cloud computing industry.
From offering cloud consulting and migration services to supporting cloud-native application development, Wipro takes centre stage in everything
With the help of the company, Wipro’s clients can start their digital transformation journey via innovative cloud solutions.
Tech Mahindra
Tata Elxsi
Tata Elxsi is a part of the Tata Group.
This cloud computing company focuses on aspects of product engineering and solutions
The company also focuses on spheres like automotive, broadcast, communications, healthcare, etc,
Birlasoft
Birlasoft is a global IT company and is a part of the CK Birla Group
It is known for providing software development and consulting services.
The company focuses on helping clients in industries like banking, manufacturing, insurance, media, and healthcare reimagine their business processes with the help of various digital technologies
Factors Driving the Growth of Cloud Computing in India
Some of the main factors driving the growth of cloud computing in India include:
The cloud infrastructure guarantees better economical solutions and scalability to companies that are always on the lookout for it.
Oversees time delays, guaranteeing quick returns on investment.
With cloud computing, businesses get faster results, resulting in better revenues
Cloud computing offers better collaboration and work productivity thanks to the various productivity and collaboration tools they provide
The cloud offers superior security measures, calming any and every apprehensiion businesses have related to data security as it is efficiently protected from hackers and virus attacks.
With the help of the cloud, businesses will be able to solve issues like enterprise mobility, scalability, availability etc
Cloud will also help businesses establish a more responsive customer interaction model guaranteed to satisfy customers.
Additional Read: Difference Between Demat and Trading Account
Risks and Challenges in Investing in Cloud Computing Stocks
Some of the risks and challenges in investing in cloud computing stocks include:
Because cloud computing is a very competitive market, the chances of price wars leading to lower margins for cloud providers could happen
Since cloud computing involves the storage of large amounts of data on remote servers, the chances of these servers being exposed to issues like cyberattacks, data leaks, or unauthorized access are always there, no matter how negligible.
Despite the implementation of strong security measures like encryption or firewalls, and backup systems, the stored data could still be at risk.
Cloud computing companies need to abide by a country’s laws on data protection, privacy, taxation, intellectual property, etc when providing services to businesses.
This compliance however could lead to extra spending and add more to the risks for cloud providers and users.
Since everything revolving around cloud computing is dependent on the internet, network, and hardware infrastructure, potential technical glitches or outages could shake up the delivery and quality of cloud services.
Conclusion
The cloud computing industry in India, without a doubt, offers powerful IT sector stocks that investors can invest in. The cloud computing industry is rapidly growing and since businesses around the world are open to calling in digital transformations to aid their expansion, the growth potential of the industry is tremendous. However, before investing in any cloud computing stocks, investors must consider every aspect to ensure fewer risks and higher returns.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.
This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
For All Disclaimers Click Here: https://bit.ly/3Tcsfuc
