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AP
Cloud computing: nice growth, no profit

After a series of disappointing quarterly results in the technology industry, expect some good news today. When Salesforce.com reports earnings, it is likely to confirm its place among the world’s fastest-growing big software companies. Revenue is expected to grow by a third this fiscal year, to nearly $5.4 billion. But not all is well for the star of cloud computing, which mainly supplies web-based tools for sales and marketing folk: it is still bleeding red ink. One reason is that Salesforce, even more than other tech firms, pays its employees in shares and options, in addition to cash. Yet it is also a sign of a deeper problem, which doesn’t just plague Salesforce. The computing cloud is clearly rising, but it is taking much longer than many expected to rain money. Losses in cloud computing help explain why Amazon, too, struggles to make a profit. Some think the e-retailer should spin off its cloud business.

Nov 19th 2014
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