Is Warren Buffett a Supporter of Cloud Computing?

Is Warren Buffett a Supporter of Cloud Computing?

“It’s only when the tide goes out that you learn who’s been swimming naked.”
– Warren Buffett, legendary investor and one of the richest men in the world.

In the wake of the sub-prime mortgage crisis and the collapse of Bear Stearns and Lehman Brothers, Warren Buffett’s quote seems especially relevant. While this clearly demonstrates his aversion to risk, his recent buy may possibly indicate a support for cloud computing.

In a world full of corrupt leaders and avaricious businessmen, Warren Buffett is a role model worth looking up to. In spite of a fortune that dwarfs the GDP of several nations, he leads a life of simplicity eschewing the typical luxuries of the rich boy club. Furthermore, he has pledged to give away 95% of his fortune to charity. What’s even more impressive is that this charitable donation will not be to an organization that bears his name but to the Bill and Melinda Gates Foundation, founded by his good friend and fellow billionaire Bill Gates. And now, with the Giving Pledge, he is encouraging other billionaires to follow suit in pledging their fortunes to charity.

For several decades now, Warren Buffett has been eulogized as the “Oracle of Omaha” – the smartest investor in the world. Not surprisingly, his investments are watched with keen interest by investors worldwide, both Wall Street firms and the common man. Buffett’s investments follow a simple philosophy – he buys stock in an industry only when he understands it. And he buys for the long term. As he said, his “favorite holding period is forever.” That is why, when tech stocks ruled the market, he kept away because he didn’t understand the industry. Considering what happened next with the dotcom bubble, it seems a very intelligent thing in retrospect.

However, a recent development seems to show a change in Buffett’s aversion to the tech industry. While Buffett has, over the years, put his money in traditional industries like insurance (Swiss Re), financial services (Goldman Sachs), railroads (Burlington Northern Santa Fe) and Coca Cola, his recent foray into the tech world with $10.7 billion worth of IBM stock has come as a surprise.

Rebecca Lipman, writing on the NASDAQ Community website, has postulated that Buffett’s investment may be influenced by the company’s cloud computing initiatives (See: Tech Ideas: Buffett Shows How to Buy Into Cloud Computing, Cheaply. She has also mentioned how the ISE Cloud Computing Index, of which IBM is a part, has risen 277% over the past three years, versus 11% for the S&P 500. I had earlier covered this area of stock appreciation (See: Breakout Quarter for Cloud Computing Stocks) as well as possible concerns on valuations (See: Are Cloud Computing Stocks Overvalued?) in previous articles.

Personally, I believe Buffett’s buy has to do with more than cloud computing, although IBM does have big plans in this field (See: IBM Expects To Generate $7 billion In Cloud Computing Revenues By 2015: CEO).
Buffett is buying into a company that meets his criteria of stable business with a consistent record; considering that Big Blue had almost $100 billion in revenues last year and the cloud is expected to generate only (relatively speaking) $7 billion by 2015, Buffett is buying more than innovations in the cloud.

By Sourya Biswas

Sorry, comments are closed for this post.

Comic
Tesla Solar Plan Would Cost Billions To Implement

Tesla Solar Plan Would Cost Billions To Implement

A 1,500-word manifesto that Elon Musk unveiled last week, outlining his plan to expand Tesla Motors Inc.’s electric-vehicle line and to build “stunning solar roofs,” may end up costing the company tens of billions of dollars to carry out. Musk, Tesla’s chairman and chief executive officer, gave the estimate on Tuesday after a tour of the…

Healthcare IoT Security To Grow To $47 Billion In 2021

Healthcare IoT Security To Grow To $47 Billion In 2021

Healthcare IoT Security It’s obvious that IoT can make the entire healthcare industry more efficient. The kind of data involved can be used to save time, physical energy and operating costs. Because of this, devices that facilitate medical data are becoming more commonplace in the industry. This includes things such as wearables that can track…

Zoho Announces Industry’s First Multichannel CRM Service

Zoho Announces Industry’s First Multichannel CRM Service

Zoho News According to Gartner, the Customer Relationship Management (CRM) software market grew by 12.3% from $23.4 billion in 2014 to $26.3 billion in 2015. Suggests Julian Poulter, research director at Gartner, “The merger and acquisition activity that began flowing through the market in 2009 continued in 2015, with more than 30 notable acquisitions. This…

How The Cloud Is Changing Online Education

How The Cloud Is Changing Online Education

Online Education Growth There’s no doubt that the internet has changed the face of education over the last two decades. In fact, by some estimates more than 80 percent of college students expect to take at least some — if not all of their courses — online. Thousands of people have earned degrees without ever…

Investing In The Future With The Introduction of Sage Cloud

Investing In The Future With The Introduction of Sage Cloud

CHICAGO, IL–(Marketwired – Jul 26, 2016) – Sage, a market leader in cloud accounting software, announced today at Sage Summit 2016 its strong commitment to future technologies, with a focus on new and existing partnerships that power business growth. Revealed during CEO Stephen Kelly’s keynote address, which opened the world’s largest gathering of entrepreneurs and…

The Security Gap: What Is Your Core Strength?

The Security Gap: What Is Your Core Strength?

The Security Gap You’re out of your mind if you think blocking access to file sharing services is filling a security gap. You’re out of your mind if you think making people jump through hoops like Citrix and VPNs to get at content is secure. You’re out of your mind if you think putting your…

Are CEO’s Missing Out On Big Data’s Big Picture?

Are CEO’s Missing Out On Big Data’s Big Picture?

Big Data’s Big Picture Big data allows marketing and production strategists to see where their efforts are succeeding and where they need some work. With big data analytics, every move you make for your company can be backed by data and analytics. While every business venture involves some level of risk, with big data, that risk…

Virtual Immersion And The Extension/Expansion Of Virtual Reality

Virtual Immersion And The Extension/Expansion Of Virtual Reality

Virtual Immersion And Virtual Reality This is a term I created (Virtual Immersion). Ah…the sweet smell of Virtual Immersion Success! Virtual Immersion© (VI) an extension/expansion of Virtual Reality to include the senses beyond visual and auditory. Years ago there was a television commercial for a bathing product called Calgon. The tagline of the commercial was Calgon…

How Formal Verification Can Thwart Change-Induced Network Outages and Breaches

How Formal Verification Can Thwart Change-Induced Network Outages and Breaches

How Formal Verification Can Thwart  Breaches Formal verification is not a new concept. In a nutshell, the process uses sophisticated math to prove or disprove whether a system achieves its desired functional specifications. It is employed by organizations that build products that absolutely cannot fail. One of the reasons NASA rovers are still roaming Mars…

Choosing IaaS or a Cloud-Enabled Managed Hosting Provider?

Choosing IaaS or a Cloud-Enabled Managed Hosting Provider?

There is a Difference – So Stop Comparing We are all familiar with the old saying “That’s like comparing apples to oranges” and though we learned this lesson during our early years we somehow seem to discount this idiom when discussing the Cloud. Specifically, IT buyers often feel justified when comparing the cost of a…

Cloud Infographic – Big Data Analytics Trends

Cloud Infographic – Big Data Analytics Trends

Big Data Analytics Trends As data information and cloud computing continues to work together, the need for data analytics continues to grow. Many tech firms predict that big data volume will grow steadily 40% per year and in 2020, will grow up to 50 times that. This growth will also bring a number of cost…

Cloud Infographic – Big Data Predictions By 2023

Cloud Infographic – Big Data Predictions By 2023

Big Data Predictions By 2023 Everything we do online from social networking to e-commerce purchases, chatting, and even simple browsing yields tons of data that certain organizations collect and poll together with other partner organizations. The results are massive volumes of data, hence the name “Big Data”. This includes personal and behavioral profiles that are stored, managed, and…

Cloud Computing Checklist For Startups

Cloud Computing Checklist For Startups

Checklist For Startups  There are many people who aspire to do great things in this world and see new technologies such as Cloud computing and Internet of Things as a tremendous offering to help bridge and showcase their ideas. The Time Is Now This is a perfect time for highly ambitious startups to make some…

Do Small Businesses Need Cloud Storage Service?

Do Small Businesses Need Cloud Storage Service?

Cloud Storage Services Not using cloud storage for your business yet? Cloud storage provides small businesses like yours with several advantages. Start using one now and look forward to the following benefits: Easy back-up of files According to Practicalecommerce, it provides small businesses with a way to back up their documents and files. No need…

Unusual Clandestine Cloud Data Centre Service Locations

Unusual Clandestine Cloud Data Centre Service Locations

Unusual Clandestine Cloud Data Centre Service Locations Everyone knows what the cloud is, but does everybody know where the cloud is? We try to answer that as we look at some of the most unusual data centre locations in the world. Under the Eyes of a Deity Deep beneath the famous Uspenski Cathedral in the…

Cloud Infographic – The Data Scientist

Cloud Infographic – The Data Scientist

Data Scientist Report The amount of data in our world has been exploding in recent years. Managing big data has become an integral part of many businesses, generating billions of dollars of competitive innovations, productivity and job growth. Forecasting where the big data industry is going has become vital to corporate strategy. Enter the Data…