The use of cloud-based technology and artificial intelligence has the capacity to change the way governments and corporations operate in a way that will make “happier” citizens, according to Mike Seidenberg,, who jointly runs the £1.2bn Allianz Technology investment trust.
Seidenberg says cloud computing has already made many businesses more efficient in how they are administered, but says there are further waves of change to come.
He says: “The overarching theme we see is continued digitalisation of business processes resulting in people having more time and a better customer experience, as they are not waiting on hold anymore.
"There are so many inefficient procedures with respect to businesses and governments. For example, San Francisco has a great primary customer service center where you can report any problems on their website.
"The tools and technologies that exist today, if embraced by governments who are increasingly budget constrained, could result in lower costs and hopefully happier citizens.
"The corporate world is relooking at every process and asking themselves how do we move this to lower cost infrastructure and not become stranded with an expensive legacy infrastructure to manage.
"The Cloud solves this problem, and granted there is a cost involved, it does allow corporations to focus on their core business and offload technology risk to the cloud vendor. None of this will happen overnight but we are big believers in software, data, and low cost computing improving people’s lives.”
He says the next wave, presently being worked on in silicon valley will involve using Artificial Intelligence to process and analyse the data to discover the best way of operating.
In terms of what this means for technology investors, the portfolio manager says: “In general companies are coming to market later in their life cycles, resulting in more mature proven business models but correspondingly higher valuations.
"At the margin, it has made our jobs more difficult because the proven business models can immediately trade to very expensive multiples.
"Net/net the quality is better and that is good for investors in the long run. There have been times in our careers where subpar businesses were taken public because they could.
"We operate on anecdote around here: just because it is public does not mean it is a great business.”
david.thorpe@ft.com
