The SMAC Revolution Could Make You Rich – Investments On The Horizon
“We've arranged a civilization in which most crucial elements profoundly depend on science and technology.” – Carl Sagan
If you haven't noticed yet, we are all connected. Electronically that is. From social media to smart phones, the world is a very electronically social place. But not only social, the same technologies that keep us updated on what Jane wore to work today is making Billions for companies all over the world. Can you imagine being with out your smart phone? I'm from the time when we considered the first 3 Star Wars movies to be the pinnacle of motion picture special effects. My kids couldn't imagine a world without Xbox.
There is a storm on the horizon, a technological storm.
All this could start to change again, and fast. We are at the dawning of a new era, a new wave of technology if you will, and many people might not even notice it happening. Its called SMAC or social, mobile, analytics and cloud. The SMAC Stack. Its a new master IT architecture that many companies are racing to keep up with. Why? Because it represents multiple billions of dollars in revenue and productivity.
For investors, these should be exciting times because this new IT wave will present major ground floor opportunities for growth. It is times like these where millionaires are made almost over night, and new household names appear. When the oceans will part and the sun will appear over the … ok maybe not that dramatic, but you get the point. Billions of dollars are already being spent in research and development and acquisitions.
When the internet age was upon us, many didn't know what to do with it at first. But affordable technologies became available and soon, people were surfing the net. To see how big of an impact the internet age had just on just the stock market, take a look at the Dow during those times.
Do you see the chart about 1995? That's about the time masses of people started to get connected. It was also around the birth of the online discount broker. In fact, In August 1994, K. Aufhauser & Company, Inc. (later acquired by TD Ameritrade) became the first brokerage firm to offer online trading via its “WealthWEB”. Notice how the trading volume dramatically increased and the price started to boost significantly. Also note how fast the price could swing. The increased volume came with increased volatility. And more opportunity.
Not too long after we started to see the IPO craze. Companies wanted to go public. Why? Because the internet gave them easier access to capital. We also saw the dot.bomb era. Hopefully, we have learned from that short lived bubble. However, what came out of that changed our lives forever. It changed the way we shop, communicate and live.
Many people believe that we are seeing something life changing on the horizon again. To put it on an IT timeline, you can see the impact technology has had in recent history.
- 1950s-1960s: Main frame computing was developed enhancing everything from business to military capabilities.
- 1960s – 1980s: Mini, or micro computing was developed. Putting the processing power of the main frame into smaller devices. Allowing for huge growth in electronics.
- 1980s – 1990s: Personal Compters, or PCs were created. Leaders such as IBM, Apple and Microsoft emerged. If you bought just a handful of these company's stock back then it would be worth millions today.
- 1990s – Now: The internet was born. While the internet was actually being theorized and developed as far back as the 60s, no one could imagine creating a whole new, ever expanding universe.
- Now – future: SMAC or Social, Mobile, Analytics and Cloud. Or the SMAC stack, bring all these technologies together. Why? Because we want it. Or we have said we want it based on how we use applications, shop, talk, communicate and spend our free time.
These are direct examples of how technology affects your life, for better or for worse. Here's a question. Do you think that at the beginning of each of these eras there was a company, if not lots of them, that you could have invested in and made some great money? FYI, the answer is yes.
Here is another thing you should be ware of. While many new major companies were born from these technology waves, many, were also put right out of business. Remember the local arcade where you played Pacman, replaced by the home gaming systems. Kodak was put right out of the picture. That building down the street that used to be a Blockbuster now houses a Pizza Hut or local insurance agent.
Keeping Up With the Jone's
When you see Ronald McDonald tweeting out about his Happy Meal, something has to give.
The McDonald’s mascot, who has ditched his yellow jumpsuit for some cargo pants, will soon have a presence on social media and tweet from the fast food giant’s Twitter account using the hashtag #RonaldMcDonald. – http://www.nydailynews.com
Everyone is going social, including your favorite trash.. I mean fast food. Why? Because they have to in order to compete. To stay in front of potential customers. Visibility is a key component to marketing, and now days in order to stay visible, you have to have a large presence on the internet. This is where the SMAC Stack comes in.
A basic example of merging the SMAC Stack is at the Apple Store. Ever bought something there? They email you your receipt. You just have to be sure to it doesn't to go spam. They also collect data on your purchase.
Another thing to consider too, is that while Kodak may have went the way of the Dodo on us, camera makers like Nikon and Cannon are still going strong. They adapted with the technology.
When disruptive technologies enter the market place, you really need to be aware of your investments, because even the bellwethers can be affected.
Along with this technology will come something called the “Semantic Web” which could actually hurt Google's position as the “goto” search engine for just about every question or query you have. But we will write about this part another time. If you want to know more information about the semantic web visit http://semanticweb.org/wiki/Main_Page.
“Getting information off the Internet is like taking a drink from a fire hydrant.”- Mitchell Kapor
With SMAC, companies who want to sell you things want to know who your talking to, what your looking at, what your interests are, and where you go. On top of that they want to know how you get there, and what routes you take. They want to store this information and analyze it, and quite possibly predict what you like, what you would most likely want to buy, or even what movies you want to watch. Hmm.. sounds a little bit “Big Brother” there doesn't it? Data is already being collected, its how to use this data that makes SMAC so revolutionary.
These developments will most likely give rise to concerns over privacy and security of personal and sensitive information. Probably another peripheral market that will get a boost from this is the Identity Theft Protection sector or online security.
So who will benefit the most from this new wave of computing? Probably small R&D companies that either get bought out, or get lucrative contracts. This is barring the majors already pushing to the forefront.
Who could be hurt? Its the larger companies, Fortune 500s, that have the most to lose, that is if they don't keep up. Remember Kodak?
“During the gold rush its a good time to be in the pick and shovel business.” Mark Twain
Here are some companies that could benefit from the coming “SMAC Down” revolution:
1. Solarwinds (SWI):
SolarWinds' comprehensive products and services are used by more than 90,000 customers in more than 170 countries worldwide, including military, Fortune 500 companies, government agencies and education institutions. Our customer list includes:
- More than 425 of the US Fortune 500
- All ten of the top ten U.S. telecommunications companies
- All five branches of the U.S. Military
- The US Pentagon, State Department, NASA, NSA, Postal Service, NOAA, Department of Justice and the Office of the President of the United States
- All five of the top five US Accounting Firms
- Hundreds of Universities and Colleges worldwide
2. SAP AG (SAP)
Sap AG is engaged in enterprise applications in terms of software and software-related service revenue. The Company’s core business is selling licenses for software solutions and related services to deliver a range of choices fitting the varying functional needs of its customers. Its solutions cover business applications and technologies, as well as specific industry applications. In-memory technology across its data management offerings enables customers to access the data, which they need, where they need it, when they need it.
3. Oracle (ORCL)
Oracle Corporation is a provider of enterprise software and computer hardware products and services. The Company provides cloud services as well as software and hardware products to other cloud service providers, both public and private. The Company’s software business consists of two segments: new software licenses and cloud software subscriptions and software license updates and product support. The Company's hardware systems business consists of two operating segments: hardware systems products and hardware systems support. The Company’s services business consists of the remainder of its operating segments and offers consulting services, managed cloud services and education services. Effective March 13, 2013, it acquired Nimbula Inc. Effective February 6, 2014, Oracle Corp acquired the entire share capital of Responsys Inc.
4. EMC Corporation (EMC)
EMC is known as the disk storage market leader. EMC management has a vision for improving disk storage, understands the power of effective marketing and sales, and is willing to invest heavily in internal development activities, acquisitions, marketing programs and events to ensure that it can set market expectations. EMC has tightly integrated its VPLEX with VMware to enhance the attractiveness of the EMC VMAX and VNX storage systems in virtualized server environments. EMC is continuing to enhance VMAX, VNX and Isilon series performance, functionality, software agents and management tools to improve ease of use and value.
5. Symantec (SYMC)
Symantec Corporation is an information protection expert that helps people, businesses and governments seeking the freedom to unlock the opportunities technology brings – anytime, anywhere. Founded in April 1982, Symantec, a Fortune 500 company, operating one of the largest global data-intelligence networks, has provided leading security, backup and availability solutions for where vital information is stored, accessed and shared. The company’s more than 20,000 employees reside in more than 50 countries. Ninety-nine percent of Fortune 500 companies are Symantec customers.
6. Nuance Communications (NUAN)
Carl Icahn said he had taken a 9.3 per cent stake in the technology company, becoming its third-largest shareholder.
Nuance Communications, Inc. is a leading provider of voice and language solutions for businesses and consumers around the world. Its technologies, applications and services make the user experience more compelling by transforming the way people interact with devices and systems. Every day, millions of users and thousands of businesses experience Nuance’s proven applications.
The above stocks are just to get you started on your research. There will be many others popping out of the wood work as new developments and technologies integrate into the marketplace. One thing is for sure, a great deal of money is being pushed around in this area and when that is happening, its time to take notice. Peripheral profit opportunities will present themselves on the fringes. Small companies cutting deals with any of the large players. One way to keep on top of the news is to create a Google News Alert http://www.google.com/alerts.
A great service for finding opportunities in emerging markets and technologies is Microcap Millionaires. Matt, the editor, is always creating great reports and identifying timely investment ideas.
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