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.
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