Cloud computing stocks can be great growth plays, but they can also quickly collapse on concerns about slowing sales growth, widening losses, and lofty valuations. That's exactly what happened to two recent cloud IPOs -- Twilio (NYSE:TWLO) and Nutanix (NASDAQ:NTNX).

Twilio went public at $15 per share last June, soared to nearly $70 three months later, then fell back to the mid-$20s. Nutanix went public at $16 per share last September, peaked in the mid-$40s in early October, then stumbled back to the mid-teens.

Image source: Getty Images.

Let's discuss what happened to these two recent IPOs, and whether or not investors should consider them potential turnaround plays at current prices.

Twilio's cloud service delivers voice calls, SMS messages, videos, and other content for mobile apps. If developers want users to call or text each other from within their apps, they subscribe to Twilio's service and integrate its API into their apps. This is generally cheaper and more scalable than creating comparable features from scratch.

Facebook (NASDAQ:FB), for example, uses Twilio's API to enable WhatsApp and Messenger users to add other users via phone numbers. Twilio has also been gradually adding additional video, security, and enterprise administration features to this platform to boost its revenues per user.

Nutanix is the market leader in hyper-converged infrastructure (HCI) appliances and software-defined storage solutions. These products bundle traditional silos of server, storage, networking, virtualization, and data center management into a single turnkey solution.

Nutanix claims that collapsing all those product categories into a single "converged" enterprise cloud platform will gradually make data center infrastructure "invisible." This can be a cost-effective solution for younger companies which haven't installed on-site infrastructure yet, and it can help older companies pivot away from on-site private cloud models toward more flexible "hybrid" cloud models that straddle both the private and public clouds.

Twilio's sales surged 66% to$277.3 million in fiscal 2016. Its "base" revenue -- which excludes revenue from "Variable Customer Accounts" (large customers which haven't signed 12-month minimum revenue commitment contracts) jumped 79% to $245.5 million.

Image source: Uber.

However, Twilio expects just 28%-31% sales growth this year, partly due to waning business from itstop customer, Uber. During its first quarter earnings report, Twilio disclosed that Uber -- which contributed 12% of Twilio's sales during the period -- plans to use other internal or third-party platforms for its calls and texts in the future.

That bombshell caused Twilio shares toplummet 26% on May 3. That development was also troubling because another Twilio customer, Lyft, recently announced that it would start testing Vonage's (NYSE:VG) Nexmo platform as an alternative to Twilio's service.

Nutanix's sales soared 85% to $444.9 million in fiscal 2016 on growing demand for HCI solutions. Wall Street expects salesto rise another 66% this year. Those numbers look solid, but a slowdown in sequential growth last quarter indicates that sales could peak this year. Moreover, Nutanix faces tough questions regarding Hewlett-Packard Enterprise's (NYSE:HPE) recent acquisition of itsrival SimpliVity.

That $650 million buyout is troubling because it makes HPE -- which already has a massive presence in enterprise hardware, software, and services -- the second largest player in the HCI market after Nutanix. HPE will inevitably bundle SimpliVity's services with its other enterprise products -- which could render Nutanix obsolete.

The short of it is that both businesses could lose customers in the near future.

Twilio and Nutanix are both unprofitable, and analysts don't see them achieving either non-GAAP or GAAP profitability anytime soon. That's because the cost of running cloud servers, securing new customers, and offering competitive prices doesn't leave much room for profits -- unless the companies scale up dramatically.

Twilio posted a non-GAAP net loss of $0.16 per share in 2016. Due to the gradual loss of Uber, the company expects that loss to widen to $0.27-$0.30 per share this year. That bottom line decline won't be good for its cash flow -- the company's cash and equivalents already dropped 61% sequentially to just $118.4 million last quarter. This raises the troubling possibility of another secondary offering in the near future.

Nutanix's net loss in fiscal 2016 is unknown. But the company's quarterly net loss nearly tripled last quarter, and it's expected to post a non-GAAP net loss of $1.49 per share this year. On the bright side, Nutanix's cash cushion remains strong, with its cash and equivalents staying nearly flat sequentially at $226 million last quarter.

Twilio trades at 4.8 times sales, which is slightly lower than its industry average of 5.6. Nutanix's P/S ratio of 3.6 is also lower than the industry average of 5.5. Nonetheless, investors probably shouldn't consider either stock "cheap" due to their top line challenges and lack of profitability.

Both stocks remain highly speculative plays, but I'd still pick Twilio over Nutanix because it dominates a valuable niche service and faces less direct competition. Nutanix is well-poised to profit from growing demand for HCI solutions, but I have doubts that it can survive competition from HPEand other tech giants which are all aggressively expanding into the same market.

Leo Sun owns shares of Twilio. The Motley Fool owns shares of and recommends Facebook. The Motley Fool recommends Twilio. The Motley Fool has a disclosure policy.

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Better Buy: Twilio Inc vs. Nutanix Inc. - Motley Fool

Free security software Panda Free Antivirus uses cloud processing to protect your PC, eliminating the need for hefty software updates and demanding scans. This collective intelligence should lead to more harmful programs being detected while using a fraction of the system resources.

According to the antivirus testers at AV-Test, Panda Free Antivirus right on the industry average in terms of virus detection, sitting at around the 98% mark for zero-day attacks and a hair under 100% for established threats.

Those are good numbers, and Panda is good software providing you remember to deny it permission to take over your browsers home page and search facility upon installing. Its process monitor is very useful, it scans quite quickly, and its simple enough in its presentation for even the most technophobic user to find their way around.

You might not realise at first, but Panda Free Antivirus begins scanning as soon as it's installed to ensure your PC is protected immediately. You can also perform three types of manual scan: full, critical areas, and custom.

The suite's other tools include a process monitor, which lets you see active processes and whether they are using a secure connection. Processes that don't are blocked, but you can undo this manually if you're confident it's safe.

There's also a handy vaccination tool that checks attached USB drives for malicious software. We recommend changing the settings so it runs automatically to pick up any threats as soon as possible.

If one of your PCs has been locked by a malicious program, Panda Free Antivirus can create an emergency rescue USB drive that you can use to scan the affected machine. This feature uses Panda Cloud Cleaner a specialist scanner that detects viruses and malware other scanners might miss.

All of of these options are presented in a clear dashboard, with moveable tiles that you can customize to suit your preferences or remove if you never use a particular feature.

Unfortunately, in our tests, Panda Free Antivirus still had a significant impact on system performance, despite its cloud-based approach. Its emergency cleaner and USB vaccination tools are well worth investigating, but if you're looking for a free antivirus tool that will have a minimum impact on other system processes, you might want to look elsewhere.

See more here:
Panda Free Antivirus - TechRadar

ARMONK, N.Y., May 9, 2017 /PRNewswire/ -- IBM (NYSE: IBM) today announced plans to release a new virtual server offering, called Dedicated Hosts, that provides enterprises with more precise placement control over their cloud workloads. A Dedicated Host is a physical server with workload capacity entirely dedicated to a single client's use. The introduction of this offering will enhance IBM's existing suite of virtual server offerings and is ideal for enterprises transitioning to a public cloud environment who require exact control and visibility into where their data and workloads reside to meet compliance or security needs.

Enterprises largely want to be able to access the cost savings and speed benefits of the cloud, but 53 percent of organizations surveyed by IDG Enterprise cite concerns over where data is stored as a key challenge to implementing a cloud computing strategy[1]. Single tenant cloud offerings such as Dedicated Hosts are designed to enable enterprises in highly regulated industries to capture the benefits of the public cloud while helping to meet complex challenges.

The introduction of Dedicated Hosts will take IBM's current single-tenant virtual server offerings a step further by providing clients with complete control over how each of their virtual servers are provisioned on a Dedicated Host. Additionally, clients will be able to select where their Dedicated Host is located within an IBM Cloud data center. This level of control can help clients in heavily regulated industries overcome barriers to cloud adoption. For example, clients in the health care industry may require precise information on where data is stored so that they can meet their compliance standards. With Dedicated Hosts, clients will be able to provide auditors with more precise information on how and where their workloads are running.

With Dedicated Hosts, clients will benefit from three distinct features:

"Enterprises turn to IBM because they want cloud infrastructure that is flexible and easy to scale, while providing higher levels of control and visibility to help as they meet their regulatory and compliance requirements," said John Considine, general manager, cloud infrastructure services, IBM. "Dedicated Hosts are another example of IBM's commitment to providing enterprise-strength capabilities on our cloud platform so that clients can do more with their data."

IBM plans to make Dedicated Hosts available in June 2017. Dedicated Hosts will be available to order monthly or hourly in IBM Bluemix. The initial offering will be available in the following configuration:

Dedicated Host Configuration

Core (vCPU)

RAM (GB)

Local Storage (TB SSD)

56 x 242 x 1.4

56

242

1.4

About IBM Cloud:For more information, visit: https://www.ibm.com/cloud-computing/.

[1] IDG Enterprise: 2016 IDG Enterprise Cloud Computing Survey, November 2016

Media Contact:Sarah Murphy IBM Media Relations srmurphy@us.ibm.com 336-337-7584

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ibm-to-provide-enterprises-with-precise-placement-control-of-their-cloud-workloads-300454089.html

SOURCE IBM

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IBM to Provide Enterprises with Precise Placement Control of their Cloud Workloads - PR Newswire (press release)

Remember pets and cattle? CERN's 2012 metaphor to describe on-premises servers you name and care for lavishly versus virtualized cloud servers you never name, run in a herd and snuff out without a second's thought?

Well the metaphor's evolved: VMware and Pivotal are now talking about McMansions and hotels to explain how they will bring virtual networks into the world of DevOps.

The companies feel that most DevOps work is taking place either with cloud-native applications or on the margins of a big organisation's software flet. Core applications remain largely untouched in the push to continuous deployment, largely because even small changes to older code in the heart of a business require detailed security and compliance oversight. That slows things down because large organisations have silos to take care of those things. Between politics and governance, that makes it hard to get close to continuous delivery.

That state of affairs got the two companies thinking about the surprise breakout use case for NSX. VMware first imagined NSX as a control plane for networks comprised of different vendors' hardware. It's turned out to be more immediately useful for microsegmentation the practice of creating virtual networks to link a small set of resources, often tied to a specific workload. Because these virtual networks are only required to do certain things, they are defined by policies that don't let them do anything else. If behaviour not defined in policy is detected, microsegmented networks either isolate themselves or make red lights and klaxons go off down in Ops.

At Dell EMC World the companies will explain how NSX will be integrated with Pivotal Cloud Foundry so that when developers work on stuff that touches compliance-and-security-sensitive applications, they'll do so inside virtual networks that reflect all the worries security and audit teams want taken into account. Instead of creating compliance-friendly new development environments a McMansion with a room for everyone and every household activity - they'll check into a hotel with just the services needed for a short stay, but a policy-enforced empty minibar.

These development environments will have their own IP and MAC address spaces and, while they may run on shared hardware, will be logically discrete from production environments and from other testbeds.

The two companies think this approach will be especially attractive to developers building containerised systems on top of core applications, because spawning containers, chaining them and they destroying both the containers and the connections between them sets off alarms among compliance pros. Those folks are accustomed to being able to trace transactions with great granularity, a task that possible with containers but made harder by the fact containers are treated as even more disposable than cattle. Showing governance types that all of this whacky work happens within virtual environments that adhere to policy makes for greater comfort.

We're not sure at this stage exactly what Pivotal and VMware will announced, but The Register understands this is a day two announcement. Michael Dell, David Goulden and Intel's Diane Bryant are the day one speakers at the show.

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Servers as pets or cattle was 2012. Now it's McMansions or Hotels ... - The Register

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Our Storm Dedicated Servers are cloud servers on your own dedicated hardware. With the intent of making Storm Servers' powerful features available to all levels of application, we also offer Storm Cloud Servers, which are servers in a shared cloud environment. In addition to these two levels, you can add solid state storage in the form of Storm SSD -- in a number of packages -- that will help you achieve speed and performance levels that represent the future of hosting, now!

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The Storm Platform | Liquid Web