Cloud companies take over FAANG stocks — 2021 cloud predictions by Bessemer

On Mar. 10, Bessemer Venture Partners published its annual report — the State of the Cloud 2021.

(Non-technical definition) Cloud-based software are online tools that can be accessed anywhere with internet availability via a web browser. Think Slack, Dropbox, Zoom, etc.

2020 was a big year for cloud companies:

• Largest IPO in history — Snowflake ($SNOW)
• Twice as many cloud IPOs in 2020 than 2019
• 2nd largest acquisition in the history of Slack ($WORK) for $27.7b by Salesforce ($CRM)

The FAANG stocks (Facebook, Amazon, Apple, Netflix and Google) famously defined the internet. Over 20 years, an investment in these companies would’ve increased by over 235x.

But there’s a new set of acronyms in town — MT SAAS (Microsoft, Twilio, Salesforce, Amazon, Adobe and Shopify) — as coined by Bessemer, who believe cloud leaders will become the drivers of growth.

• Over the last 4 years, MT SAAS stocks had a return of 800% compared to 330% for FAANG stocks.

Bessemer’s 2021 predictions:

1. Unbundling of the office — the work from anywhere movement is here to stay and tools that serve the remote workforce will continue to benefit.
2. SMB (small-medium-sized businesses) SAAS makes a comeback — as more small businesses see the importance of cloud software.

See 5 more predictions and the full report here.