NEW YORK (TheStreet) -- Corporate enterprises are in the midst of a technological shift, one that removes customer and employee restrictions from within the boundaries of their headquarters and into the cloud. The advantages presented by this transition cannot be overstated.For investors, the preparation process is now even more critical in assessing which cloud ideas will thrive for a chance at producing solid market-beating performances. If anything was learned from the tech bubble, it was that not every idea was going to work. So it stands to reason that among the numerous successful possibilities with the cloud such as Oracle ( ORCL) or VMware ( VMW), there will undoubtedly be some misses. The challenge for investors comes with trying to make contact with every swing, but that is not often possible.
|Salesforce.com announces its first-quarter results Thursday.|
While the tech sector as a whole will continue to lead the market, investors are waging huge bets on software companies such as Salesforce.com to produce the type of growth investors crave. Sometimes absent in all of that optimism are the realities that competition (from those known and unknown) can throw a wrench into those expectation and send shares back down to true fundamental levels. For Salesforce, the odds are stacked against it from the standpoint that it needs to be perfect -- often causing unwarranted volatile reactions. Investors wanting to play the cloud can do better by looking into names such as Oracle, IBM and EMC ( EMC). Salesforce is better suited as a good short candidate from current levels.