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A key issue here is that Cloud computing is incredibly sticky.

Take the market leader, AWS as an example.

Companies, particularly the large enterprises, use so much data that it would have taken years and posed security challenges to upload it over the internet. So Amazon made it easy for customers to switch to AWS through the introduction of a 100 Terabyte super secure data device, which they called a Snowball, that they would send to a company’s office. The company would transfer data from its on premises infrastructure to the Snowball, which was then sent to Amazon to be uploaded to the cloud infrastructure. Problem solved. As computing power and data consumption increased, Amazon offered what they called a Snowmobile, which was a huge truck full of Snowballs that would be used to transfer the enormous quantities of data to the Amazon cloud. Even then it could take months to complete the process.

To give you an idea of the scale of the process, Amazon transferred its own data from Oracle infrastructure to its AWS cloud and the process took 13 years from start to finish, commencing in 2006 and completing in 2019.

So once this process is complete, people need a very good reason to switch to another provider.

It is a cliche, but the value of a business is the discounted value of future cash flows. It isn't about what you earn today, it's about optimizing what you will earn tomorrow. Every new customer increases tomorrows cash flows exponentially and this compounds over time. NPV that back to today and you have a valuable company that is growing in value all the time, regardless of today's earnings numbers.

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