IPOs, the Cloud and the Unwary Investor
In June 2011, during Steve Jobs' final presentation to the Apple Worldwide Developer Conference, he set the scene for every IPO that will follow for years to come.
Until that time, the Cloud was something that techies talked and knew about. The general public, on the other hand, wasn't aware of what it was, let alone that they were using it on a daily basis. Whether at home accessing Google or Amazon or at work using Salesforce.com's CRM system, they were 'in the cloud' every day.
But once Jobs let the cat out of the bag that there was this 'thing' called the Cloud and that Apple users would have access to it - free - it was guaranteed to become the next big thing for investors.
Especially the unwary ones - not least because they would notice that companies like Amazon were getting on the bandwagon and selling Cloud services. Or they would hear "Dropbox" being referred to as everyone's preferred Cloud provider.
Put that together - now - with the wannabe investors in the Facebook IPO and all the people who won't have a chance to buy in at a decent price and you've got easy pickings for the broker/dealers who are suddenly in a position to sell everything that sounds like "cloud" to their customers.
And that's what's happening. Just like during the dotcom boom of the late 1990s, it's now the "Cloud" boom for everyone who wants in on any IPO that includes 'cloud technology' as part of its offering.
Recently, a number of generalized and industry-specific Cloud providers have had their IPOs. From BazaarVoice (tracking social media) and Brightcove (for corporate customers to publish online videos) to Greenway Medical Technologies (for the medical profession), these IPOs have performed far better than their metrics warrant. Only the recent Guidewire IPO, a cloud-based service for the insurance industry, seems to warrant the share price and growth they're experiencing.
But that's the way the system works. For those who desperately want to get in on what Michael Lewis so appropriately called, "The New New Thing," the technology space provides more than ample opportunities for investors to spend their money - both wisely and otherwise.
In the case of the Cloud and IPOs, the best advice is "Buyer Beware."