Wednesday, September 14, 2011

Cloud Computing Storm Drives Business Industry

A new Sand Hill Group survey reveals that over the next 12 months, it would be cloud computing and Software-as-a-Service (SaaS) that will be driving the largest amount of spending in the software industry.

There were more than 100 software company CEO’s and CFO’s who were interviewed for the Software CEO/CFO Outlook 2011study. They are expecting that their companies will grow by at least 20 per cent in 2011. Accordingly, hiring is also expected to increase.

After the economic recession in 2008 and 2009, the accounting software for businesses industry still continues to pull itself out of the meltdown. But there is a vibrating positivity as the survey respondents are seeing that more than three quarters of them are already back to pre-recession growth levels in 2011.

To increase efficiencies and reduce costs are among the biggest reasons why there will be an increased spending on online accounting software.

This news has led to the question of whether private equity groups should also jump in.

Though there is still not so many cloud computing applications available for private equity companies, the construction industry is starting to store some of its applications into the cloud.

Should there be a go-signal to do the same, one thing that has to be decided upon is the owner of the primary license for the cloud software or service. Should the Private Equity own the license, the investment companies may have the sublicense to the same package. This is called private equity owned.

On the other hand, if it is the investment companies that own the license, it will be called investment company-owned. In this case, the control will be in the hands of the investment companies and not in the private equity.

However, it is seen that the more beneficial set-up is the private-equity owned.

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