We’re looking into the cloud. See what we see.
The power of thematic investing is the ability to cross sectors and industries to pursue less obvious beneficiaries of thematic tailwinds.
Facts
- In 2010, data created every two days exceeded the total amount of information created from the dawn of civilization through 2002.
- By 2014, that same amount of data was created every 10 minutes.
- 90% of all the data in the world has been created in the past two years.
- 99.4% of physical objects (everything from video cameras to temperature sensors) that may one day be connected the internet are still unconnected.
- Today, a computer not much larger than a grain of salt can include a solar cell, battery, memory, pressure sensor, wireless radio and antenna.
Insights
- The enormous amount of data being created has no value until it is contextualized and processed into useful knowledge.
- The “cloud” is a metaphor for the virtualization of data storage and processing through the Internet. It is technology that is essential and invisible.
- The “cloud” is characterized by the ability to access and process data independent of location and device, taking advantage of economies of scale and high performance remote computing power.
- The provision of “cloud” services is consolidating in a select group of companies with almost all other companies and enterprises outsourcing to these few providers.
Action
- We invested in one of the largest “cloud” services providers, which just happened to also be one of the world’s largest online retailers.
- Some clients who outsource data storage include: NASA, General Electric, Netflix, the CIA, Johnson & Johnson and the NASDAQ Stock Market.
- Part of a multifaceted company, the cloud services division is one of the fastest growing and most profitable.
Chevy Chase Trust’s thematic research led it from the theme of Transformative Technologies to a retail company with an under-appreciated technology business.
