Amazon, Microsoft, and Google (Alphabet Inc.) have been battling for dominance in the arena of cloud computing for almost as long as the term has been around. The growth of software as a service (SaaS) was started and fueled by enterprises seeking ways to deliver tools over large networks. This industry is not only growing, but it is also evolving to include more than just SaaS.

According to the Wall Street Journal, the combined capital expenditures for the big three were $31.54 billion in 2016, which is 22 percent higher than investments from 2015. A substantial portion of these costs has gone into server farms.

Amazon just announced plans to plunk down a massive collection of data centers in Stockholm, reported WSJ.

Amazon did not reveal how much the new region of data centers would cost, but analysts estimate that several hundred million dollars is not an unreasonable guess. An investment of this size would obviously have a proportionately high ROI (return on investment), and according to the Wall Street Journal, it does.

Software as a service is evolving into what is being called, hyperscale computing. It is not just software in the cloud that businesses are looking for anymore. Now they want their infrastructures hosted as well.

Gartner research firm estimates that in 2016 alone, enterprises and startups spent $500 billion in computing, storage, networking, database technology and more.

Most of that spending was in moving from company-owned servers to servers in the cloud. Part of the draw to infrastructure as a service (IaaS) is scalability. With physical, on-premises servers, companies are limited during peak traffic periods.

The WSJ provides an example of how a fantasy football site crashes right before kickoff due to the traffic volume being higher than its servers can handle. With IaaS, resources are virtually unlimited and can be scaled on-demand and in real time.

Oracle is another company that has been seen investing in data-center development. In its most recent fiscal year, Oracle funded $1.7 billion on server farms. While this expenditure is small in comparison to what the big three have budgeted in the last year, Oracle is confident that it can compete.

Steve Daheb, senior vice president of product marketing for the company thinks Oracles infrastructure services are superior to its competitors. For this reason, he feels the company does not need to spend as much on data centers. However, the Journal points out that the numbers do not seem to support this claim.

In the most recent quarter, [Oracles] infrastructure-as-a-service revenue grew 17% to $178 million. Net sales at Amazon Web Services, comprised largely of Amazons infrastructure-as-a-service business, grew 47% to $3.54 billion in its most recent quarter.

It would seem that Oracle is significantly lagging behind and it will be difficult to catch up. Amazon, Microsoft, and Google have already invested so much into computing capacity that they have built a barrier that can only be breached by investments going into the tens of billions of dollars.

Such massive expenditures are easy to see when a region for Amazon Web Services runs between $300-$600 million. Add to that the maintenance and other overhead involved with running the facility, and one can understand why Amazon, Microsoft, and Google are expected to dominate this growing industry.

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Amazon, Microsoft, and Google want to own the Cloud - TechSpot

Private Cloud Server Market is suitable to businesses with unpredictable or dynamic computing requirements that need direct control over their environment. Companies that have a data-center and developed IT infrastructure will fuel the industry demand over the future. Technological advancements pertaining to firewalls, threat monitoring, and space availability are expected to offer ample opportunities.

Data security and protection is a prime concern restraining the growth of the private cloud server market. Third party attacks, for instance, viruses can threaten the reliability of these solutions. Stringent government rules and regulations tightly protecting the collection of private customer information can provide obstacles to industry growth. Installation, maintenance, and hardware costs of the technology are very high and can discourage businesses from integrating them into their businesses.

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Private Cloud Server Market size will be fueled by the rising awareness of the benefits of private cloud server demand among enterprises. These solutions maximize resource flexibility and usability and elevate the business performance. The risk of organizational data theft and privacy breach by public cloud usage is extensively reduced as the enterprise is responsible for the management. These solutions allow access to authorized members and business units of the organization by implementation of a virtualized environment that ensures the optimal management of available computer resources. As loss of data can have a major impact on an organization, private cloud server market software allows data recovery, which is vital in times of system failures.

The transition of businesses from profit-focus to customer-focus has given rise to big data. Big data can provide business insights based on historical and real-time data. This requires large storage capabilities and access to information databases across various business units of the organization. Big data platforms hosted by these servers can offer better scalability, lower costs and better resource utilization as compared to traditional big data deployments driving the private cloud server market demand. The growth of hybrid cloud technology is predicted to create lucrative market opportunities. Hybrid platforms combine the private and public clouds to enable effective workload movement between them. It is particularly useful in dynamic or highly changeable work environments and in businesses which require high access to big data.

Private cloud server market segmentation by application includes storage, disaster recovery, development and testing. Storage segment is expected to lead the industry owing to the high availability of customer and organizational data. The data recovery segment is predicted to gain prominence during the forecast timeframe. Critical information requires a back-up in case of system failure, theft or external attack.

Segmentation of the private cloud server market based on organization size comprise of SMBs and large businesses. SMBs are predicted to grow significantly owing to rising awareness about the benefits of the technology.

By industry verticals the private cloud server market consists of BFSI, defense, entertainment and infotainment, retail and consumer goods, aerospace, travel and hospitality, government, healthcare and life sciences, IT and telecommunication, logistics, and others. Managed private services are estimated to experience substantial growth in the retail vertical segment. The requirement of resources at high speed access is essential for the smooth functioning of businesses operating in this sector. Private cloud server market solutions are useful in accumulating and managing of real-time data which can be used in capacity planning of the organization. Although public cloud server market offer economies of scale, higher ROI and cost benefits, private technology offers better reliability and security and ensures data is not lost or misplaced.

The private cloud server market can by integrated by platform types comprising on-premise and external private clouds. On-premise private technology is primarily used by businesses that have already invested in data-center capabilities, infrastructure and have hardware available that can be repurposed for this these solutions. Moreover, on-premise private cloud server market provide higher security as compared to external servers. External service providers offer off-site solutions to data storage to multiple tenants. They provide resources to multiple users, for instance physical hardware. The compromise on security is met with lower costs due to hardware reusability. These benefits are factors promoting the increasing adoption of external solutions segment in the private cloud server market.

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The U.S. private cloud server market is anticipated to lead the private cloud server market due to escalating demand for secure severs and rapid industrialization. APAC is estimated to witness high growth rate during the forecast period. This is attributed to increasing awareness of the advantages and rising demand for big data storage in emerging economies, for instance China and India.

Players operating in the private cloud server market need to employ business strategies such as collaborations, mergers and acquisitions to sustain growth in the global marketplace. Vendors providing these solutions include Amazon, Microsoft Corp, D-Link Corporation, Cisco Systems, Accenture PLC, Rackspace, BitCloud, Seagate, Google, Just Cloud, MEGA Ltd, ElephantDrive, Hewlett-Packard Development, Hivelocity Ventures, International Business Machine, and Cisco systems. On February 2016, Rackspace announced the release of Rackspace private cloud powered by Red Hat. This strategy will deliver the most easy-to-use and reliable Open stack private and hybrid clouds across the world.

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Private Cloud Server Market Global Industry Analysis, Share, Growth, Trends, and Forecast 2016 2024 - MilTech

Servers are, in many respects, the backbones of technology industry. They serve as critical infrastructure on which a host of other functions rest. Considering their importance, it should come as no surprise that the server market is one of the largest sub-industries in all of tech; global server sales totaled $14.6 billion in Q4 2016, according to research firm IDC.

Cloud computing is undoubtedly changing the industry, but the leading server manufacturers remain several well-known tech companies. In this article, we'll look at three dividend-paying, large-cap stocks that investors interested in the server market should consider.

Image source: Getty Images.

It is the world's largest server provider, and servers sales constitute the single-largest revenue contributor among Hewlett-Packard Enterprises'(NYSE: HPE) six reporting sub-sections, accounting for $14.0 billionof the IT giant's $50.1 billion FY 2016 sales. Like the rest of the market, Hewlett-Packard Enterprise's server sales have remained fairly static, declining just 0.7% from 2015 to 2016.

For those unfamiliar with it, the company was formed from the 2015 split of the iconic tech conglomerate Hewlett-Packard. HP Inc. was created to house the PC and printer division, which remain in secular decline, while Hewlett-Packard Enterprise was created to hold the more promising businesses. However, looking at current analyst estimates, it isn't immediately clear that those businesses are, in fact, more promising.

Wall Street analysts see the company's 2017 estimated sales falling 28% and its FY 2018 revenue declining a further 17%.Interestingly, this kind of sales attrition did not reveal itself in HPE's most recent 10-K filing; FY 2016 total revenues fell a mere 3.8%.As such, investors considering buying HPE for its income-producing abilities should keep in mind that many observers widely expect its business to gradually deteriorate in the coming years. Buyer beware.

In terms of its dividend stats, HPE yields slightly less than the market average of 1.94%. The company raised its dividend in December, so its shares yield 1.28% on a trailing-12-month rate basis, and 1.48% on a forward basis. It also enjoys plenty of room for future rate increases -- HPE's payout ratio sits at just 12.6% -- though its revenue growth outlook profile remains a critical consideration for anyone looking at HPE stock.

Unlike HPE, the dynamics at International Business Machines'(NYSE: IBM) server business better reflect the on-the-ground reality of the server industry. IBM organizes its sales of its three main server products under the umbrella of its Systems reporting segment. For its fiscal 2016, sales of IBM's physical servers plummeted 21.8% to $5.9 billion. This might seem dire, but it's important to remember that cloud computing and IBM's various software-as-a-service offerings still rely on servers to power their systems. In fact, IBM's cloud revenues grew 49% in 2016 to a run rate of $5.8 billion, or roughly the same size as IBM's current server sales base. Said another way, IBM's shifting business model hasn't eroded the server as a key driver of its sales. Rather, the rise of cloud computing means IBM is selling server-powered software to customers, rather than physical servers themselves.

In terms of its dividend payments, IBM shares currently yield 3.2%,well above market averages. The company has done an admirable of job steadily increasing its payouts as well. Though not a Dividend Aristocrat, IBM has increased its annual cash payments for 17 consecutive years. It also bears noting that IBM has been one of the most active companies in corporate America in terms of rewarding its shareholders through stock buybacks as well. So, while IBM doesn't command the same kind of server market share as HPE, the company's continued progress in its ongoing business pivot and above-average yield make it one of the more appealing income-producing stocks to appear on this list.

Another interesting dividend play tied to the server industry could be investing in one of the suppliers that provides hardware components to the industry at large. If that's your flavor, then chip giant Intel (NASDAQ: INTC) is perhaps your best bet.

Intel is widely acknowledged to control an estimated 99% of the server microprocessor market, making it a proxy for the industry as a whole. As such, companies that make and sell physical servers to customers, like HPQ and IBM, use Intel chips to power their products. However, major cloud computing providers -- like Amazon, Alphabet, and others -- also use Intel server chips to power their respective cloud infrastructures. As such, investing in Intel can be seen as a nice way to invest in the industry growth as a whole, while saving the headache of having to determine which specific server manufacturer will perform the best.

Seasoned tech investors will also recognize Intel as one of the industry's best-known dividend stocks. Though fairly mature from a sales growth perspective, Intel handsomely rewards its shareholders through cash distributions and stock buybacks. Intel's current dividend yield sits at a respectable 2.9%. Its 49% payout ratioshould give the company the flexibility to continue to raise payouts in the future as well. And while not a Dividend Aristocrat -- Intel missed raising its dividend as recently as two years ago -- the company has demonstrated a general commitment to growing its dividend. As just one example, Intel's cash distributions grew from just $0.07 in its FY 2000 to $1.04 in its FY 2016. So, while Intel doesn't directly produce servers, its shares can still be an interesting way for investors to generate dividend payments from the server industry all the same.

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3 Top Dividend Stocks in the Server Industry - Bloomington Pantagraph

Pebble was one of the first major players in the smartwatch space. But when Fitbit acquired the company late last year, pretty much the entire product lineup was scrapped and plans were made to only continue supporting Pebble software and services through the end of 2017.

But that doesnt necessarily mean that your Pebble watch will become useless at the end of the year.

Pebble has just released updates to its Android and iOS apps that will allow you to keep using Pebble watches even after the Pebble cloud servers shut down.

The new apps will let you skip the login process, sideload apps, and install updated firmware even if a Pebble authentication server cannot be reached something that you can be pretty sure will happen in the future.

Pebble has also released new developer options, including an offline mode option that will prevent an app from even trying to communicate with Pebble servers. Developers can also sideload a service configuration to change which servers the Pebble app communicates with, which could allow developers to continue offering cloud-based services for Pebble smartwatch users even after the Pebble servers are gone.

Now its just up to developers to decide whether they want to continue investing in updates to their apps for a dead platform.

Other changes in the latest app include the removal of options to suggest new features or contact support, and health data collection and telemetry reporting have been removed.

via The Verge

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Pebble releases update so that watches will work when cloud servers shut down - Liliputing