Is It Time to Short Cloud Computing Stocks?
February 24, 2013
Hackers have taken a bigger interest in the cloud lately, and that’s bad news for investors in the publicly traded companies that operate there. On Thursday, Zendesk, which provides an online platform for customer support, reported in a blog post that an intruder breached its servers and accessed data from three of its customers. Wired has since identified the victims as three social-network sites: Twitter, Tumblr, and Pinterest.
"We’re incredibly disappointed that this happened and are committed to doing everything we can to make certain it never happens again," Zendesk CEO Mikkel Svane said in a blog post announcing the breach. "We’ve already taken steps to improve our procedures and will continue to build even more robust security systems." …
So far, Zendesk’s troubles haven’t done much to dampen enthusiasm for related public equity issues such as NetSuite (NYSE: N ) , salesforce.com (NYSE: CRM ) , and Workday (NYSE: WDAY ) . Yet any one of them could be next. Six years ago, hackers accessed one of Salesforce’s email databases and used the information to launch attacks against two of the company’s largest customers at that time: Automatic Data Processing and SunTrust Banks. Both NetSuite and Workday list potential damage from a security breach among the major risk factors facing their businesses in SEC filings…
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