A few years ago, cloud computing was considered an experimental technology. No one knew whether big companies eventually would use Internet-based technologies to access and store their corporate data. But clearly, customers have been voting in the affirmative — with their wallets.
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During the past six months or so, traditional software companies like Oracle (NASDAQ:ORCL) and SAP (NYSE:SAP) have plunked down billions for cloud operators like SuccessFactors, Taleo and RightNow. And there also have been a variety of successful IPOs in the space, such as Guidewire(NYSE:GWRE), Brightcove (NASDAQ:BCOV), Jive (NASDAQ:JIVE) and Bazaarvoice(NASDAQ:BV).
But the glut of offerings is far from over. The Wall Street Journal has a short list, but here’s a closer look at some of the likely players (many of whom I’ve gotten to sit down with):
WorkDay was co-founded by Dave Duffield and Aneel Bhusri, the masterminds of PeopleSoft — a pioneer in the enterprise resource planning (ERP) market during the 1990s. This type of technology helps companies with things like payroll, inventory, HR and other core functions. But in 2005, Oracle purchased PeopleSoft in a hostile takeover, so Duffield and Bhusri went on to create a cloud version of the company, called WorkDay.
The move was spot-on. In fact, WorkDay has quickly been picking off Oracle clients. And to boost growth, WorkDay raised $85 million last November.
A hot technology trend is “Big Data,” and Splunk is one of the leaders. Essentially, Splunk has a search engine that helps companies analyze their data logs. It has proven extremely helpful in finding security breaches.
Splunk recently filed for an IPO, with Morgan Stanley (NYSE:MS), Credit Suisse (NYSE:CS),JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC) all in as underwriters. The proposed ticker symbol is “SPLK.”
Splunk has 3,300 customers, which include biggies link BofA, Comcast (NASDAQ:CMCSA),Salesforce.com (NYSE:CRM) and Zynga (NASDAQ:ZNGA). And the company has been growing at a fast clip — from fiscal 2009 to 2011, revenues soared from $18.2 million to $66.2 million.
Palo Alto Networks
The security firewall market has mega-players like Check Point Software (NASDAQ:CHKP), but security pro Nir Zuk realized there was a big opportunity to innovate the industry.
Traditional solutions tend to block all incoming threats, but this can reduce corporate efficiency. For example, a rank-and-file employee’s access to Facebook might be a problem — but not so much for the marketing department, right?
Nir’s Palo Alto Networks set out to create a dynamic firewall that can deal with ever-changing technologies. So far, Palo Alto has more than 4,500 customers, and the company generated more than $200 million in sales for 2011.
ServiceNow uses the cloud to deliver a next-generation system to support the IT infrastructure library market, which includes features like a service desk and other processes. It’s a huge opportunity and includes legacy players like Hewlett-Packard (NYSE:HPQ) and BMC (NYSE:BMC).
Last year, to get the company ready for an IPO — as well as to snag more customers — ServiceNow hired Frank Slootman. Slootman led Data Domain from a startup in 2003 to an IPO in 2007, then sold it to EMC (NYSE:EMC) for $2.4 billion in 2009.
In 2002, several coders started Atlassian with just a $10,000 credit card loan. They leveraged cloud technologies to develop a platform to allow companies to collaborate on projects.
Now Atlassian has more than 24,000 customers across 138 countries. And while it remains profitable, the company still raised $60 million in venture capital from Accel Partners, which should help the company boost development and allow for acquisitions.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him viaemail. As of this writing, he did not own a position in any of the aforementioned securities.