One fact came out loud and clear last week among the deluge of big technology companies last week.

You want to hitch your wagon to cloud based investments in any way, shape or form you can.

That was the writing on the wall after Amazon Web Services (AMZN) announced a blistering 45% growth in sales off of an already enormous base. Microsoft followed up with an eye-popping 98% jump is cloud services. Cloud is even starting to account for a noticeable share of Apple's (AAPL) earnings.

The future is about the cloud.

These days, the average investor probably hears about the cloud a dozen times a day. If you work in Silicon Valley you can triple that figure.

So before we get deep into the weeds with this letter on cloud services, cloud fundamentals, cloud plays, and cloud Trade Alerts, let's get into the basics of what the cloud actually is. Think of this as a cloud primer.

It's import to understand the cloud, both its strengths and limitations. Giant companies that have figured it out, like Salesforce (CRM) and Oracle (ORCL), are some of the most profitable companies in the world.

Understand the cloud and you will readily identify its bottlenecks and bulges that can lead to extreme investment opportunities. And that's where I come in.

Cloud storage refers to the online space where you can store data. It resides across multiple remote servers housed inside massive data centers all over the country, some as large as football fields, often in rural areas where land, labor, and electricity are cheap.

They are built using virtualization technology, which means that storage space spans across many different servers and multiple locations. If this sounds crazy remember that the original Department of Defense packet switching design was intended to make the system atomic bomb proof.

As a user you can access any single server at any one time anywhere in the world. These servers are owned, maintained and operated by giant third-party companies like Amazon, Microsoft, and Alphabet (GOOGL), which may or may not charge a fee for using them.

The most important features of cloud storage are:

1) It is a service provided by an external provider

2) All data is stored outside your computer and in-house network

3) A simple Internet connection will allow you to access your data at any time.

4) Because of all these features, sharing data with others is vastly easier, and you can even work with multiple people online at the same time, making it the perfect vehicle for our globalized world.

Once you start using the cloud to store a company's data, the benefits are many.

1. No Maintenance

Many companies, regardless of their size, prefer to store data inside in-house servers and data centers.

However, these require constant 24 hour a day maintenance, so the company has to employ a large in-house IT staff to manage them, a costly proposition.

Thanks to cloud storage, businesses can save tons of money on maintenance since their servers are now the headache of third-party providers.

Instead, they can focus resources on the core aspects of their business where they can add the most value, without worrying about managing IT staff of prima donnas.

2. Greater Flexibility

Today's employees want to have a better work-life balance and this goal can be best achieved through letting them telecommute. Increasingly, workers are bending their jobs to fit their lifestyles, and that is certainly the case here at Mad Hedge Fund Trader.

How else can I send off a Trade Alert while hanging from the face of a Swiss Alp?

Cloud storage services, like Google Drive, offer exactly this kind of flexibility for employees. According to a recent survey, 79% of respondents already work outside of their office some of the time, while another 60% would switch jobs if offered this flexibility.

With data stored online, it's easy for employees to log into a cloud portal, work on the data they need to, and then log off when they're done. This way a single project can be worked on by a global team, the work handed off from time zone to time zone until it's done.

It also makes them work more efficiently, saving penny pinching entrepreneurs money.

3. Better Collaboration and Communication

In today's business environment, it's common practice for employees to collaborate and communicate with co-workers located around the world.

For example, they may have to work on the same client proposal together or provide feedback on training documents. Cloud-based tools like Hightail, Dropbox, and Google Drive make collaboration and document management a piece of cake.

These products, which all offer free entry level versions, allow users to access the latest versions of any document, so they can stay on top of real time changes, which can help businesses to better manage their work flow, regardless of geographical location.

4. Data Protection

Another important reason to move to the cloud is for better protection of your data, especially in the event of a natural disaster. Hurricane Sandy wrought havoc on local data centers in New York City, forcing many websites to shut down their operations for days.

The cloud simply routs traffic around problem areas as if, yes, they have just been destroyed by a nuclear attack.

It's best to move data to the cloud, to avoid such disruptions because there your data will be stored in multiple locations.

This redundancy makes it so that, even if one area is affected, your operations don't have to suffer and data remains accessible no matter what happens. It's a system called de-duplication.

5. Lower Overhead

The cloud can save businesses a lot of money.

By outsourcing data storage to cloud providers, businesses save on capital and maintenance costs, money which in turn can be used to expand the business. Setting up an in-house data center requires tens of thousands of dollars in investment, and that's not to mention the maintenance costs it carries.

Plus, considering the security, reduced lag, up time and controlled environments that providers like Amazon's AWS have, creating an in-house data center seems about as contemporary as a buggy whip, a corset, or a Model T.