Ahead in the cloud

Susannah Streeter: Hello and welcome to Switch Your Money ON from Hargreaves Lansdown. I'm Susannah Streeter, I'm the Senior Investments and Market Analyst here at Hargreaves Lansdown, and as usual, I'm joined by Sarah Coles, our Senior Personal Finance Analyst. Sarah, we should start by saying that we're speaking at a very strange time, of course, during the national period of mourning of Queen Elizabeth II, and it has been a really sad period of reflection for us all.

Sarah Coles: Yes, and when life slows down like it has over the past two weeks, it makes you really take stock of all sorts of things, including how much life has changed since the start of the Queen's reign. It's really hard to think of an area of life that hasn't changed dramatically over the past 70 years, and of course one of the most obvious examples is computing. So back in 1952, we were all still in the era of enormous machines, and they'd only just started using magnetic tape. But of course, now we hold computing technology in the palm of our hands.

Susannah Streeter: We certainly do. Computing technology is almost unrecognisable from that time. And one of the most important revolutions in recent decades has been the move to cloud computing, and that's what we're going to be looking at in today's podcast, an episode we're calling 'Ahead in the cloud'. We'll be speaking to Andy Parker, the founder of Elusive Brewing in Wokingham, who's been using cloud computing to make quite a difference to his brewery.

Andy Parker: Hello, and thanks for having me on. Yes, we've used cloud computing and IT in some really interesting ways as part of building a brewery.

Susannah Streeter: We'll also be speaking to our Lead Equity Analyst, Sophie Lund-Yates, about some of the listed companies in this space, including Alphabet and Amazon.

Sophie Lund-Yates: Yes, and I'll also be looking at a nice alternative way to get some access to the cloud action.

Sarah Coles: And we'll catch up with Emma Wall, our Head of Investment Analysis and Research, who's been speaking to Ziad Abou Gergi, a senior fund manager here at HL, about the US market, which is home to some of the biggest cloud computing companies.

Susannah Streeter: And we will of course have the quiz.

Sarah Coles: Well, I'm going to be ambitious. I'm going to try and get more than one right this time.

Susannah Streeter: Well, it has to happen at some point, I suppose. But I should start with a bit of background about cloud computing. Most of us don't spend an awful lot of time thinking about what it is. We just use it. But essentially, there is a physical network of servers somewhere in the world, holding data that we can access using an internet connection. It can simply be how businesses store data on their infrastructure on their own premises, a so-called private cloud, or they might take advantage of services that host and manage web services for them, known as a public cloud, or a mixture of both, the so-called hybrid cloud. And as time has gone on, the capabilities of cloud services have really taken off, and around five billion people are accessing data on the cloud.

Sarah Coles: Yes, I mean even outside work, you use the cloud all the time. So that's whether you use something like Dropbox to send photos to friends, or use streaming services to watch TV, play games or listen to music. And everyone who owns a smartphone is likely to be connected to the cloud.

Susannah Streeter: And at a time when war and inflation has been causing a real storm around the world, the cloud is considered to be a brighter spot in terms of opportunities for growth. With price spirals a huge challenge for economies around the world and high inflation likely to persist into 2023, despite Central Bank's determinations to try and bring it down, many companies are facing some unprecedented challenges. According to one of the latest business snapshots from the ONS, the Office for National Statistics, concerns about input price inflation and energy prices remain the top two worries for October. As consumers reign in their spending and margins risk coming under increasing pressure, the going is getting tougher to protect profits. But while some firms might be battening down the hatches and reigning in spending, others are investing more in finding efficiencies. Accelerating digital transformation to try and develop leaner business models to try and unlock productivity problems.

Sarah Coles: Yes, so Grant Thornton's international business report is a survey of senior executives of around 10,000 firms in 29 economies, and it found that only 54% of firms expected to increase profits this year. However, those that did forecast to rise said they were investing in noticeably more areas of IT than the global average, focusing on reducing operational costs and improving efficiencies. Migrating to the public cloud, hosted by an external provider, rather than trying to maintain and upgrade their own servers, can allow businesses to essentially rent digital capabilities in a more flexible way. A cloud model enables businesses to purchase only the storage they require, as and when they need it.

Susannah Streeter: And the fight for talent also plays into all of this. As we've discussed on this podcast before, there is really fierce competition for digital skills among many businesses. In the latest ONS survey, energy worries and high business costs may be at the top of the pile of financial pain, but more than a third of companies are also still grappling with the ongoing problems of staff shortages. So the idea is that by taking advantage of cloud based technologies and the services and resources they bring to automate business functions, that can lighten the impact of the labour shortages. And crucially, many businesses see the cloud as vital for pursuing growth and scale. It's seen as pretty crucial for developing technologies such as machine learning and artificial intelligence.

Sarah Coles: And of course, the cloud's just going to get bigger. Data growth is being driven by a rapidly expanding universe of internet users, apps, and the so-called, 'Internet of things' devices. Even the way we measure this data is having to change fast to keep pace. Nonetheless, there are lots of tricky decisions for businesses. There's the complexity of making the shift, plus the challenge of containing the cost for doing so. And for many, the most important concern is security.

Susannah Streeter: Yes, secure access to the outsourced cloud environment is a relatively new discipline for many IT organisations. Many companies have spent decades and millions of pounds securing apps, data, and their customers using a typical firewall approach. And in Cisco's recent survey, more than half of companies who responded said they were moving data between their premises and the external cloud weekly, so it's no wonder security is such a concern.

Let's have a chat now to one company that's made the switch, and can tell us just what factors were under consideration. Let's bring in Andy Parker. You heard him earlier, he's the founder of Elusive Brewing in Wokingham. So Andy, your background is in IT, so how did you get into beer?

Andy Parker: It was really a hobby that got out of control. Back when I was working in IT, I obviously enjoyed drinking beer, but as a bit of an escape really, from IT, I started brewing at home, and making a big mess in the kitchen, mostly. Got to the point where I was producing some reasonable quality beer. Joined the home brew club, started entering competitions, and it kind of went from there really.

Sarah Coles: They don't necessary feel like natural bedfellows, IT and beer, but it's not an uncommon transition to make, is it?

Andy Parker: No, I could say one drove me to the other. I mean, brewing is a science, there's a lot of variables involved. And in my IT career, I worked in many different roles but laterally it was working on video streaming and video streaming quality. And that involves a lot of analytics, a lot of looking at millions of lines of data, trying to tune and optimise. I think the way I've approached brewing has been kind of driven by that. That, at least, informed the way I design recipes and the way we evolve our recipes and tweak them, and aim to iterate to the result that we want to get with the beer. So I think that approach was a good grounding in how to make good beer.

Susannah Streeter: So why do you think cloud computing can improve, perhaps, your beer recipes and the way that you make the beer?

Andy Parker: If I think, when I came out of IT and started the business, we made conscious choices to have everything we did in the cloud. My last few roles in IT were working on cloud based applications and cloud computing. It seemed almost foreign to me, at that point, why would you have a physical server in a brewery? Why would you want physical infrastructure? When I started the business and started designing things, even very simple things like 'let's make sure all our recipes are accessible on a phone, on everywhere, we can look at them from any device.' That sort of thing. So those all, kind of, went into Google Docs. From there, everything that we've licensed or brought in, for example our accounts package, it's all cloud-based. And that's really made our lives a hell of a lot easier as we've grown the business, in terms of access to information and access to data.

Sarah Coles: Presumably, it makes a difference to how you can grow as well, so that you're not constantly having to worry about whether or not you need more computing power, as well.

Andy Parker: To be honest, that is the main benefit. I don't really give it any thought at all in terms of computing power. I just think about the applications we use and how we use them. And the whole infrastructure piece is someone else's problem, which is nice.

Susannah Streeter: Now, you've clearly embraced cloud computing from the off. But do you think, for example among your competitors, given that they're in such a traditional industry, it might be tricky to embrace something so new?

Andy Parker: Yes, I think so. Because a lot of it comes out of the way their equipment, and the way it's operated, is designed. I mean, we don't have state of the art equipment in terms of the brewery kit by any sense, but we have made some small changes such as having our temperature controllers, you know, we can access them via an app on the phone and change temperatures. That kind of thing maybe wouldn't be possible to some of the larger traditional breweries, without a lot of reinvestment in investment they've already made, and a lot of modifications to their kit. So I think that's definitely an advantage.

Sarah Coles: Does it become part of the conversation that you have with other brewers? So when you're talking about your processes, is it something that you end up recommending to other people?

Andy Parker: Yes, definitely. We've recently implemented a brewery management system called Breww, with an extra w. It saves us hours a week, just by-, and that's a cloud based application that we use. I was just out delivering earlier. When I deliver, I can scan a QR code on a keg, scan it to the venue, it's all updated instantly so that back in the office, they can see what's going on. They know where I am on my delivery run. Things like that, I mean, I shout about that to other breweries and say, 'Hey, you should look at this because it's saving us hours and saving us lots of money.'

Susannah Streeter: One aspect that's been highlighted by other companies looking to migrate, perhaps, to off premises cloud computing, is security concerns. Is that an issue for you, or do you feel that actually, perhaps, the way that you've done it means that you have fewer security concerns?

Andy Parker: That's a really good question, because my first, sort of, forays into cloud computing were when I was working at Channel 4 Television. And our CTO back then discovered Amazon EC2 and the Elastic Compute Cloud. We started using it to offload traffic for broadcast-, live broadcast television, such as things like Big Brother. When Davina would say, you know, 'Go and look at the website now,' and we'd all panic. Security back then was a huge concern, because the whole concept of taking our data and giving it to somebody else was like, 'Woah, why would we do that? That's a huge risk.' And I think the way the companies that provide cloud services have, kind of, recognised that and evolved their offerings, and these days it's quite an easy conversation. When we started using Breww, the application I mentioned earlier, a conversation about, 'Who owns the data?' 'Can I see it?' 'Can I get to it?' 'Is there any chance a competitor could get to our instance of that data?' It's a discussion worth having, but it's these days quite a short discussion, I think.

Sarah Coles: I wanted to ask a little bit about the business more generally. So you must be going through some challenges at the moment. Have you been affected by things like rising energy costs?

Andy Parker: Yes, we have. Brewing's a very energy intensive process. You boil liquids, you cool liquids. Either you're using electricity or gas. In our case, it's electricity. We came out of contract in May of this year, and our unit rate has trebled. I mean, we can look at efficiencies, and how we can, you know, optimise what we do and use less electricty, but it's meant cost increases because we can't swallow a trebling of our electricity. We're now paying more in electricity than we are in rent for our premises. So we've had to pass that on, and it's meant cost increases.

Sarah Coles: And is that something you're seeing, sort of, across the industry, or is it coming as a surprise for the people you supply?

Andy Parker: Everyone's seeing it, because we're supplying pubs primarily, and they're obviously painfully aware of the same challenges. I think for what we're seeing on the brewery side is that, I mean, people are coming out of contract and that's when it hits them. I guess we're a little bit earlier than some, in being May, but now if you're coming out of contract the rates you're being offered are even double what we're now paying. If they're not aware of it, they soon will be.

Susannah Streeter: Certainly, inflation is a big problem right across the board, it seems. But you're already using the cloud. I mean, sometimes people would migrate to try and find those extra efficiencies. Are there many more that you can find, given that you've pretty much started from scratch with the cloud, and already, I imagine, fine tuning every single way that you work?

Andy Parker: In terms of computing and cloud specifically, I think we've done almost as much as we can. There's a few little things that I'd like to do, but that's more using extra functionality in terms of the software we already use, and making sure we're fully optimised there. But at the minute, I'm focusing on reducing energy usage. So we're about to implement a new calling system that will be more efficient and save us money there, because we're going to get more benefit from investing in that, than we are in our computing side, which is already fairly optimised.

Sarah Coles: I know you've got a blog on your website, and you talk quite a lot there about help that you get from your neighbours. Presumably old fashioned, sort of, pitching in, is actually helping out in tougher times as well.

Andy Parker: Definitely. I mean, we started on the same industrial estate as another brewery. They've been super supportive, they're a lot bigger than us, maybe ten, fifteen times the volume that we produce. Things like, they've got a big more buying power than us and they help us out a little bit there, which is great. Supply of kegs has been an issue recently and they've helped us out a little bit there. In fact, we recently brewed there while we did some reconfiguration work, so they helped us maintain our production. I think brewing is somewhat unique in that sense, in that, yes, I have competitors of course, but we see ourselves competing against the multinationals. So the little guys tend to look after each other.

Sarah Coles: And can you explain a little bit about the cuckoo brewing that you do?

Andy Parker: Yes, so we ran out of capacity, basically. And we were looking at moving to a larger site or taking on more space where we are, and that was to be our big project this year. But because of everything going on, we've kind of tightened our belts a little bit and thought, 'Well, let's just dig in.' We've kind of invested a bit where we are, and we've expanded as much as we can. But in order to produce more beer, we've leant on some friends a little bit, and asked them if we can borrow the odd spare tank and brew into it, and that's cuckoo brewing. A bit like, you know, laying an egg in a cuckoo's nest and brewing beer elsewhere. In terms of the beer itself, they've got the same water as us, we supply the ingredients, and it tastes just like we brewed it, but it's brewed elsewhere.

Susannah Streeter: Andy, it's been really fascinating talking to you, finding out how a combination of community, tradition, and more cutting edge technology is helping you out through these pretty difficult times, so thanks very much.

Andy Parker: Thank you.

Susannah Streeter: So let me bring in Sophie Lund-Yates, our lead equity analyst here at HL. So Sophie, you've been looking at a few companies in this space, haven't you? First up, let's talk, we have to talk, of course, about Amazon.

Sophie Lund-Yates: Hi Susannah. Yes, you're absolutely right, we can't not talk about Amazon really. When we think of Amazon, most people automatically think of Amazon retail, prime, things like that. It's pretty surprising, then, to think that at the moment, every single drop of Amazon's profit is actually coming from Amazon Web Services, or AWS, which is Amazon's cloud computing business. Now, according to Amazon, AWS is the most advanced and extensive cloud platform out there. One thing AWS does have is good operating margins. So these are currently in the region of about 29%, and this is the core attraction of being involved in cloud computing. Once you've built up enough scale and invested in initial infrastructure, which is very expensive for cloud computing, once those costs are covered, profit can come along for the ride. Now, in the fullness of time, I'd expect AWS margins to move forwards even more. It is, however, relying on the boom in cloud computing. The retail division that we associate with Amazon is actually loss-making at the moment. The group has pumped so much money into building out extra infrastructure because of the boom in online shopping during the pandemic, I was guilty of participating in that, that margins in this part of the business have really suffered. The inflationary backdrop is something to watch as well because all those extra bits and bobs that people spend money on through Amazon when times are good, may well stop being placed in the virtual shopping baskets, sadly. So, certainly, quite a lot to monitor where Amazon is concerned.

Susannah Streeter: So, let's talk as well about Alphabet because it's also a pretty big player in this space, isn't it?

Sophie Lund-Yates: Definitely, but slightly different to Amazon. Google parent company, Alphabet's cloud division is currently loss-making, and that's because simply it's less mature than AWS. So, those benefits of scale that I was just discussing haven't yet come through. I'm optimistic that this will happen. As we know, the addressable market is huge. I think an important point to consider is that, as inflation continues and companies look for ways to save on costs in the long run, cloud computing is a potential solution for this. It offers businesses the chance to become more efficient and cut down on clunky processes, so while not guaranteed, it is a trend that I'll be watching. So, just to give a bit of context, Alphabet cloud had a quarterly loss of close to $860 million dollars last time they reported results, as it continued to expand and spend on that infrastructure. That is a huge number but it does reflect one of Alphabet's core strengths, there simply aren't many businesses in the world that can afford a seat at the cloud table at the moment. And in the background, Alphabet's advertising business is rumbling on too, and continues to make money, and I'm particularly intrigued to see how YouTube ads fare next quarter. All in all, an eclectic but powerful business over at Alphabet.

Susannah Streeter: Okay, so that's Alphabet and Amazon, and you promised a different look at a company in this space. What have you come up with?

Sophie Lund-Yates: I've come up with a company called Splunk and not just because I want to say that word, but it's very satisfying, but taking a different tack and instead of looking at a cloud provider, it's very interesting to look at a cloud-based company instead. Splunk, among other things, is essentially used for monitoring and searching through big data. So, it indexes and correlates information in a container that makes it searchable and makes it possible to generate alerts, reports and visualisations for companies. As you might imagine with today's, you know, data obsessed world and way of working, I view this as an attractive industry to be in. It has an offer of cloud-based and on-premises software products as well. So, the group is seeing strong growth in its cloud revenue. I mean, that was up 59% year-on-year last quarter, however, there has been a slow down in the new business pipeline. I'm not overly concerned at this point, but it is something to keep an eye on. The law of big numbers means things simply can't keep growing at the same rate but it's important to monitor if this is a structural problem for the group. I'm cautiously optimistic for now, but, as ever, nothing is guaranteed. It's also something the market has a keen eye on. You know, tech companies can suffer when ideas of slow-downs or stagnations are swirling.

Susannah Streeter: Yes, okay Sophie. Thank you so much. Certainly plenty to keep our eye on. And if you're enjoying this podcast, please do let us know what you think and do subscribe wherever you get your podcasts. You get a fresh new episode in your inbox as soon as it's ready.

Sarah Coles: So, let's bring in Emma Wall now, our Head of Investment, Analysis and Research here at HL. She's been talking to Ziad Abou Gergi, a Senior Fund Manager here at HL, about the home of many of the major cloud computing giants, the US.

Emma Wall: Hi Ziad.

Ziad Abou Gergi: Hi Emma. How are you?

Emma Wall: I'm well, thanks. How are you?

Ziad Abou Gergi: Very well, thank you.

Emma Wall: So, we're here today to talk about the US market, a market that drives global stock markets, in fact. It is the largest market in the world and it's a market that has, until the beginning of this year, done extremely well, but then we had a change of fortunes. So, perhaps before we look forward we can recap on how the market has behaved over the last twelve months.

Ziad Abou Gergi: The US market has been a challenging environment recently. If you look at the performance as we speak, if we look into the S&P 500 Index, it is down around 17% in the beginning of the year. Most of the sell-off has been the result of the uncertainty regarding inflation, where, twelve months ago, we thought, and the central banks thought, that inflation is going to be transitory, but actually, it was not. And suddenly the central banks had to act to make sure that we don't end up in a high inflation environment. So, this change of monetary policy where the policy was very accommodative to becoming more restrictive has changed the environment for the economy and for the market. And obviously the market, being forward-looking, has to adjust to this new reality, and this is what created this rotation and the volatility that we are currently seeing. Of course, it's not only reserved to the US market, it is the case in most economies in the world.

Emma Wall: Now, we always encourage our investors not to think too short-term. If we just park what's happened this year, year to date, as you say, there has been that central bank rotation. Longer-term, the US is very compelling, isn't it? Particularly for investors in the UK who tend to have a bias towards the UK market. The US has diversity and it has really, as I said in the intro, driven global returns over the last five to ten years, hasn't it?

Ziad Abou Gergi: Yes, absolutely, and this is what is fascinating with the US economy, is that it is very diversified. The US economy doesn't rely on one type of industry and what we've seen over the last few years is that the innovation has been pretty much driven in the world by US companies. And this is why as long as we are seeing these US companies innovating and driving growth, the US market will still be competitive and an interesting market to consider from a UK investor's perspective.

Emma Wall: Now, you and I at HL sit on something called the Strategic Asset Allocation Forum, which sounds very complicated, and it is quite complicated, to be fair. It determines the best mix of assets in a portfolio in order to deliver long-term performance for clients. Now, nothing is guaranteed but one of the interesting things, I think, about the US market is it's exactly as you say, the UK, great for generating income and there's some amazing industries in the UK, but the US offers something a bit different. You gave us a little bit of flavour there but perhaps you could go into that. Tech, for example, is the big one, right?

Ziad Abou Gergi: Yes, absolutely. I mean, the technology sector is the biggest in the US and pretty much in all the developed world, and we've seen all the main players in the tech industries. We all heard about Apple, we all heard about Alphabet or Google, Amazon, Microsoft, of course. These companies, which usually sits within the technology sector are really dominant players at the global stage because of that, obviously they were growing so quickly over the last ten years, driven by all this revolution in technology, really. Everything becoming connected, so that's a big driver for the groups, for these companies that they were actually capturing and helping the US market to grow and to deliver the performance that we've seen. And although the stocks has been challenged recently, the prospect for the long-term is still obviously interesting, as long as these companies are innovating and driving growth.

Emma Wall: And that's it, isn't it? We're not going to all suddenly stop using the internet or stop using our computer, or stop using our phones. Perhaps you could talk then about the, kind of-, again, nothing is guaranteed, but the longer-term outlook for the US and for those particular sectors.

Ziad Abou Gergi: The long-term outlook, it depends on the capacities for these companies in the technology sector, but also across the various industries to continue to innovate and grow, and find solutions to what we need in our daily lives, or what companies and industry needs for when they are producing the goods and services that you are consuming. So, as long as the prospect for growth is there, it's a very interesting environment for these stocks, and it's really hard not to think why it won't continue innovating and driving growth. Obviously, the US economy is the biggest in the world, so a lot of the demand and the innovation is happening, obviously not only in the US, but a big part of it is also driven by the US market being the biggest one. So, this is why over the long-term the outlook for the US economy is good because we think that the US will continue to grow, and the prospect for the US market and US companies to capture this growth is definitely interesting.

Emma Wall: We've been talking a lot about the cost of living crisis in the UK and the impact of the atrocities in Ukraine on, kind of, the European economy and the US is not completely protected from the impact of those events, but it is a lot more self-sufficient, isn't it? It's much more energy autonomous and it has a huge consumer market, which can help generate returns for said companies.

Ziad Abou Gergi: Yes, absolutely, and the US started this effort to become less reliant on the outside world for their energy consumption, because of that reason, they are slightly more immune from the rest of the world, from the rise in oil and energy prices. Now, having said that, obviously there is currently an inflation problem that the central bank is trying to tackle by raising interest rates, and at the time of the recording, tomorrow we are expecting for the reserve to increase rates again in its attempt to fight inflation. But, having said that, we look into the resilience of the economy and so far, as we see, despite the reserve having increased a number of times the interest rate, the economy is still resilient. We've seen the job market quite strong and the corporate profits that are still decent. I mean, this year, 2022, the marker is expecting around 10% in gross and earnings, which is a decent level. So, you're right, overall, the US economy seems to be more resilient than the other economies because of the diversity that I just mentioned in the beginning.

Emma Wall: Ziad, thank you very much.

Ziad Abou Gergi: Thank you very much, Emma.

Susannah Streeter: And that was Emma Wall talking to Ziad Abou Gergi, a Senior Fund Manager here at HL. And please bear in mind that these are the views of the Fund Manager and are not individual stock recommendations. You're listening to Switch Your Money ON from Hargreaves Lansdown.

Sarah Coles: And finally, it's time for the quiz, and Susannah tells me she's been hunting for some quirky facts about cloud computing, and, do you know, I've actually been swatting up on some facts about clouds as well, because I know what you're like.

Susannah Streeter: Only time will tell if that was a complete waste of time, Sarah. Well, we'll start ten years ago, when the term 'cloud computing' was being used fairly commonly but not everyone had got to grips with it. So, according to a US survey at that point, what percentage had faked an understanding of it at work? Was it one in ten, one in five, or one in three?

Sarah Coles: Oh, blimey, I'm not sure. Do you know what? I don't think I'd have had much an idea myself ten years ago, so I'm going to go for one in three.

Susannah Streeter: You are right, and apparently one in seven had faked it in a job interview as well. That had to be a spectacularly awkward interview, especially if they were one of the 50% who thought it had something to do with the weather. Right, next, there are some pretty big numbers banded about when it comes to how much data will be stored in the cloud in future. Now, you've heard of a byte, which is the unit most computers use to measure storage on devices. Well, a gigabyte is equal to 1,000 million bytes, so that's around 200 songs stored on a device. According to The United States International Trade Commission, in 2020 digital data was around 59 trillion gigabytes and is expected to reach 175 trillion of them by 2025. But what's the technical term for a trillion gigabytes? Is it a metabyte, a zettabyte or a googlebyte?

Sarah Coles: Oh, blimey. You know, none of those actually sounds real at all, they kind of sound like they're made up by Douglas Adams, but I do know that a google is a massive number, so I'm going to go for that.

Susannah Streeter: No, I'm sorry. You did try though, but it is actually a zettabyte, and I have to admit, it was a new one on me, too. Although, you're right that a google is a big number, it's a one and 100 zeros. Okay, next we go back to the beginning of cloud computing. There is an awful lot of disagreement about who invented the phrase, but out of the following three, which has never claimed to have invented it? Was it Joseph Lechleider, a psychologist and a computer scientist working in the 1960s? A group of Compac executives writing a business plan in 1996, or Google's CEO Eric Schmidt in 2006?

Sarah Coles: Well, they all sound quite believable. I reckon though, this might be one of your trick questions and that people say all of them invented the term.

Susannah Streeter: You're right. Well done, and they're not alone either. The credit has been given to all sorts of people, including the engineer who introduced the idea to Schmidt and a handful of academics in the '50s and '60s. Essentially, anyone who said, 'There must be a better way of doing this,' and then mentioned a network over a period of about 60 years, they could be in the frame.

Sarah Coles: Brilliant, in which case, when they eventually invent a device that means I never have to iron again, I want it to be known right now, that I had that idea first.

Susannah Streeter: I hope it makes you a fortune. I just don't do ironing. Anyway, finally, onto a company that has made an incredible use of the cloud, Netflix. The myth is that one of the founders came up with the idea after being fined $40 by Blockbuster for returning a copy of Apollo 13 late. However, the other founder it revealed it was something they came up with because they were forced to spend lots of time with one another, and decided to invent business ideas to pass the time. But, why were they stuck with each other for so long? Did they have to watch their kids play baseball every weekend? Did they carpool to work together? Or were they members of the same metal detecting club?

Sarah Coles: I'd love them to be metal detectors but I have a feeling it's something a bit more everyday. I'll go for watching their kids play baseball.

Susannah Streeter: No, they carpooled to Silicon Valley from Santa Cruz every day.

Sarah Coles: Blimey, that's an impressive amount of creativity for a daily commute. Do you know, I'm lucky if I can manage Wordle.

Susannah Streeter: Or maybe you're just not carpooling with the right Silicon Valley entrepreneurs, Sarah.

Sarah Coles: It's true. I'm probably not, that's exactly what the problem is.

Susannah Streeter: Well, that's all from us this time, but before we go, we do need to remind you that this was recorded on the 15th September 2022 and our interview with Ziad was recorded on the 20th September. All information was correct at the time of recording.

Sarah Coles: Nothing in this podcast is personal advice. You should seek advice if you're not sure what's right for you. Investments rise and fall in value, so you could get back less than you invest and past performance isn't a guide to the future.

Susannah Streeter: Yes, this is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value, or price, of any investment, and investors should form their own view on any proposed investment.

Sarah Coles: And this hasn't been prepared in accordance with legal requirements designed to promote the independence of investment research, and is considered a marketing communication.

Susannah Streeter: Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however, HL has put controls in place including dealing restrictions, physical and information barriers to manage potential conflicts of interest presented by such dealing.

Sarah Coles: You can see our full non-independent research disclosure on our website for more information. So, all that's left is for me to thank our guests, Andy, Ziad, Sophie, Emma, and our producer, Elizabeth Hotson.

Susannah Streeter: Thanks so much for listening. Goodbye.