Trustnet Magazine 54 September 2019 | Page 16

Advertorial feature ecosystems that many enterprises still use. Amazon’s Cloud database, Aurora, has been a long time in the making but in Bezos’ view, the long learning time only goes to show how vast the prospects are. Aurora provides the security and reliability of commercial databases at one-tenth the cost. The attractions are obvious. As in many other facets of internet and technology, the Cloud world is increasingly polarised between US and Chinese spheres of influence. In fact, the very idea of Cloud infrastructure is different in the Chinese context. Alibaba’s Cloud business is doubling each year and focuses on providing basic tools to the small and medium- sized business sector to which it has never previously had access. Chinese enterprises have historically built their [ BAILLIE GIFFORD ] 16 / 17 own software whilst SMEs have used manual processes that exploit the abundance of cheap labour or used pirated productivity tools. All of this means that the business software sector has not yet established itself. Alibaba is changing this with affordable connected tools and is clearly channelling a big pool of pent-up demand. No matter where a business is based, the attractions of the Cloud are apparent. The likely cost savings are appealing but the value from the business intelligence it creates is even more significant. With 5G networks soon to be rolled out globally, and the explosion in data continuing, enterprises are looking for insights that can benefit their decision- making. This is where Artificial Intelligence (AI) comes into play as it excels when making predictions from large datasets and ultimately, the Cloud is how many companies are going to make use of AI. Streaming companies such as Netflix and Spotify that host their platforms in the Cloud use AI tools to recommend films and songs that they hope are to our tastes. Amazon’s product recommendations on their website are generated using machine learning algorithms hosted on AWS. There is potential that as these gradually improve, it may become more economical and profitable for Amazon to send products before the user has requested them. Their taking out a patent for ‘anticipatory shipping’ shows they are serious. This is only possible due to the Cloud, the intersection of deeper datasets and more powerful AI tools. Our holdings in Amazon, Alphabet and Alibaba should all benefit as this transition continues. This is the third in a series of three articles. Investments with exposure to overseas securities can be affected by changing stock market conditions and currency exchange rates. The views expressed in this article should not be considered as advice or a recommendation to buy, sell or hold a particular investment. The article contains information and opinion on investments that does not constitute independent investment research, and is therefore not subject to the protections afforded to independent research.   Some of the views expressed are not necessarily those of Baillie Gifford. Investment markets and conditions can change rapidly, therefore the views expressed should not be taken as statements of fact nor should reliance be placed on them when making investment decisions. A Key Information Document is available by visiting www.bailliegifford.com Tom Slater Tom graduated BSc in Computer Science with Mathematics from the University of Edinburgh in 2000. He joined Baillie Gifford the same year and worked in the Developed Asia and UK Equity teams before joining the Long Term Global Growth Team at the start of 2009. Tom became a Partner in the firm in 2012. Tom was appointed Joint Manager of Scottish Mortgage Investment Trust in January 2015 having served as Deputy Manager for the previous five years. In 2015 Tom was appointed Head of the US Equities Team and is a decision maker on Long Term Global Growth portfolios. Tom’s investment interest is focused on high growth companies both in listed equity markets and as an investor in private companies. FE TRUSTNET trustnet.com