The Motley Fool

Here’s why the Bulletproof Group Ltd share price plunged today

Shares of Bulletproof Group Ltd (ASX: BPF) have been sold down today, losing 4.6% to trade at 41.5 cents. However, they did fall as much as 6.9% this afternoon, hitting a low of 40.5 cents.

The decline likely comes as a result of a report published by The Australian Financial Review regarding the supposed vulnerabilities of cloud computing.

Bulletproof is a business that assists other businesses move their operations to the cloud. It acquires public cloud infrastructure from Amazon Web Services (AWS) and then sells that space to its own clients for a profit, while it also charges them for ongoing support.

Many would argue that companies can do this for themselves, bypassing Bulletproof altogether, but moving to the cloud can be a difficult process that distracts management from running their businesses. As such, many would prefer to utilise Bulletproof’s services.

However, while many (myself included) believe that cloud computing will continue to grow over the coming years, some may have been a little spooked by the article from The AFR on Monday evening.

It reported that many Amazon Web Services customers had experienced an outage in their operations which came as a result of the damaging storms that hit New South Wales over the weekend. Among those impacted were reportedly Foxtel and Domino’s Pizza Enterprises Ltd. (ASX: DMP).

The AFR noted that it “served as a warning that sending systems to the cloud, rather than hosting them on-premise did not remove the risk of costly failures.”

The cloud mightn’t be faultless or completely protected from error. But it should also be noted from the article that many of the businesses that were impacted had insisted their systems and data remain in Australia.

AWS has many data centres around the world and if its customers structured their technology systems accordingly their data could have been switched to other data centres without such a lapse in their businesses. For smaller businesses, paying for this multi-zone service would likely have cost a fraction of the amount lost in not being able to trade when the Sydney systems went down.

What’s more, if AWS’s systems couldn’t withstand the shocking storms over the weekend, what’s to say the on-premise servers of individual businesses who were avoiding the cloud would have been able to withstand them?

All in all, cloud servicing allows businesses around the world to improve their operating efficiencies and to save money and space in not having to run their own servers. I still have faith that more and more businesses will turn to the cloud over the coming years, and that’s reason to be bullish on both Amazon Web Services as well as Bulletproof Group.

Why retirees LOVE these 5 ASX stocks

Discover The Motley Fool's top 5 ASX dividend stock ideas for 2016 to get you started building a more diversified income portfolio that is paying you back! Click here to learn more.

The report is free! No credit card required.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Motley Fool contributor Ryan Newman owns shares of BULLETPRF FPO and The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.