December 21, 2011

Some Cloud-Based Enterprise Solutions Companies Seeing Temporary Slowdown in Europe


Enterprise cloud solutions, which are seeing brisk sales in the U.S., have been just a little slower penetrating Europe, and the debt crisis there isn't helping. This doesn't lessen their value and potential, according to writers from The Street publishing in Forbes today. But it has caused their shares to slip a little in price.

This scenario, however, makes them a good stock buy, say many analysts, since adoption is ultimately expected to continue brisk growth in North America, Europe and EMEA. European companies have not cut back on needed information technology spending, and overseas revenue has been strong, Rajesh Ghai of Think Equity told The Street. Virtualization has an extremely compelling economic argument, and Europe has held steady, said Ghai.

While several cloud-based solutions providers saw a tiny bit of slippage during the third quarter of this year, business would appear to have bounced back, for the most part. (Though The Street notes that it is still awaiting Salesforce.com's (News - Alert) European figures, which it expects to be down slightly.)

Cloud-based computing offers too much value for anyone to worry too much about its future prospects. In many cases, these software-as-a-service solutions have replaced costly – into the tens of millions – software installations that take years of operation to recoup, not to mention install. With cloud-based solutions, companies can be up and running quickly, and revenue-neutral or even positive within the first year.

The only area in which cloud-based solutions may see a hiccup is at the point of its primary weakness (or perceived weakness): security. Companies are still shaken up by wide-scale data breaches of information stored off-site, such as the major theft of data experienced by Sony and its PlayStation component earlier this year.



Tracey Schelmetic is a contributing editor for TMCnet. To read more of Tracey's articles, please visit her columnist page.

Edited by Jennifer Russell
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