When a business offers its services “in the cloud,” they are offering
access to their software, platform, and infrastructure remotely through the
Internet, so that the end user can simply log onto that network, without having
to download anything. So with cloud computing, users can at any time simply log
on to their own secure workspace, using almost any Internet-connected device
they desire, from any location and immediately have access to the right
software and tools, without having to install anything.
Crexendo, Inc. is one of the faster growing cloud-based web and
communications services companies, and winner of the 2013 Internet Telephony
Excellence Award for its leading communication technology, Crexendo Cloud
Telephony Solution from Internet Telephony Magazine. Crexendo operates through
three main business segments: (1) the Crexendo Network Services segment which
offers hosted telecommunications services that transmit calls using IP or cloud
technology, and broadband Internet services; (2) the Crexendo Web Services
segment which provides search engine optimization, link building, paid search
management, conversion rate optimization, and website design and development
services; and the StoresOnline segment which offers website hosting services
through in-house telemarketing, online marketing channels, and direct
prospecting for small office/ home office business owner and entrepreneurs.
Cloud computing is definitely a strong growth area to build a niche. IBM
has suggested that by the end 2014, businesses in the United States will spend
over $13 billion on cloud computing and managed hosting services. On a global
level, by 2015, end-user spending on cloud services could grow to a $180
billion market. Among the chief reasons for this remarkable growth include cost
reduction, increased productivity, shortening of development cycles, and
increased access to better analytics. Small businesses and mid-sized businesses
in particular benefit from cloud services, so rather spend the money on
software, expertise to run the software and additional technological infrastructure,
they can just pay a subscription fee and access all they need on the cloud.
According to IT publication SiliconAngle, more than 60% of American
businesses already report using cloud-based services, and of those that do, 82%
have reported cost savings. Over the next five years, business workloads
performed over the public cloud are expected to grow at an annual compounded
growth rate of 44% versus an 8.9% annual compounded growth rate for workloads
performed at a business’s premises. Of the businesses using cloud computing,
14% recognized further cost savings by downsizing their information technology
departments.
A significant of businesses see cloud computing as the future, and there
is really only one issue that may be in question, and that’s regarding the
future of net neutrality. Net neutrality is the notion that all Internet
traffic and data should be treated equally and not be discriminated against or
meddled with. Net neutrality safeguards a level playing field ensuring that
cloud service providers and cloud consumers both small and large have an equal
stake on the pathways of the Internet regardless of what they are up to.
If net neutrality is removed, the typical cloud computing company may be
forced to strike a deal with the Internet Service Provider (ISP) to prioritize
their data over everyone else’s to maintain competitiveness. This would be an
added cost to cloud companies that would either shrink profit margins or have
to be passed on to their consumers.
Verizon took the Federal Communications Commission (FCC) to court
regarding the net neutrality rules and effective won a victory in the U.S.
Court of Appeals D.C. Circuit this past January of 2014, where the judge
essentially ruled that the FCC Open Internet rules could only be applied to
common carriers. The FCC currently classifies ISPs such as Verizon and Comcast
as information providers and can simply maintain the same net neutrality by
re-classifying ISPs as telecommunication services. However, Tom Wheeler, the
current chairman of the FCC has instead proposed a two-tier “pay for
prioritization” scheme which effectively does end net neutrality, and the FCC’s
proposal is open for public comment on FCC.gov. Right now it does appear that
the ISPs have more influence on the FCC than content providers such as Netflix
and Amazon.com. Tom Wheeler himself was formerly the president of the corporate
lobby, the National Cable and Telecommunications Association (NCTA), and the
current president of the NCTA, Michael Powell, was formerly the previous
chairman of the FCC. There is a significant grassroots movement demanding that
net neutrality stay in place as well as the elites of the companies that
provide the content, so it is difficult to say which direction the FCC will
ultimately take.
Senator Patrick Leahy (Democrat of Vermont) and House Representative
Doris Matsui (Democrat of California) have jointly introduced a bill called the
Online Competition and Consumer Choice Act which would maintain net neutrality
and prevent any pay for prioritization schemes, but with a Republican dominated
House of Representatives, the bill may not have a chance to move forward for a
vote. In the meantime, regardless of what occurs to net neutrality, the cost
savings alone will virtually guarantee double digit growth in the usage of
cloud computing services.
Recently, Crexendo, Inc. has acquired the Voice-over-Internet protocol
company, One Stop Voice, which focuses on the small to mid-sized business
market. This acquisition is expected to bring in $500,000 in added revenues and
to be accretive to earnings immediately. The rollout of a new web builder
program called Slingshot is expected to revive growth in the Crexendo Web
Services division. Overall, with the promising outlook for cloud computing,
Crexendo, Inc. is very well positioned.
About
MissionIR
MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
