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Netflix Drifts into the Clouds

Today's Netflix announcement with Roku about a new way to get movies from the net directly to your TV screen and bypassing the computer screen in your home office, is cool for a number of reasons.

Netflix
AP
Netflix

Sure the news popped Netflix shares in a big way before they settled back at the end of the day, but the story goes much deeper. It speaks to a massive trend gripping technology nowadays, and it's being embraced by Apple , Google , Yahoo , Microsoft , Oracle , Cisco , Intel , VMWare , and just about every other major player in tech. Netflix's announcement is a different spin on the concept of "cloud computing," that lofty idea of everything you'd ever want or need stored on a computer network or server elsewhere instead of on a drive inside your own computer.

The personal computer is "personal" no more. More like a vessel into a different, though parallel, plane. It harkens back to the glory days of Sun Microsystems when Scott McNealy, who was way ahead of his time, kept telling us "the network is the computer." Which made infinitely more sense than Ed Zander proclaiming, later as Sun's CEO, that "we're the dot in dot com." But I digress.

Back to Netflix, and all the others. We're rapidly approaching a time when memory is becoming obsolete. Not computer memory, but ours. A time when everything we need to know is a keystroke or two away. A time when watching a movie or TV show means logging on to the net and having the material wirelessly beamed to any TV, or laptop, or handset we might have laying around. Where the net becomes a massive Tivo not just for entertainment but any kind of data. AppleTV, Sony , Roku, Intel, Comcast , AT&T , Time-Warner, News Corp., and certainly our parent NBCUniversal and General Electric . They're all doing it.

This is why Cisco's acquisition of Scientific Atlanta a few years back was such a stroke of genius. And why big server farms -- and the networking and memory companies equipping them -- and the security companies trying to protect them, are such compelling investor plays right now.

Google unveiled its Google Health yesterday. Another example of key data migrating its way out of your PC and your doctor's office and into the netherworld of Google's vast electronic data storage.

HP is buying Electronic Data Systems for $13 billion. And IBM is already a services powerhouse generating $57 billion in revenue from that part of its business. All of this business will need managing and service, and HP is trying to get a bigger piece of the IBM pie because of it.

Back to Netflix and its deal with Roku today. Sure, it's a fun little story that'll give us a neat way to buy movies. But it's the tip of the iceberg. Investors with their heads in the clouds may miss out on a longer-term trend that's beginning to show dividends now. And with such a massive trend gaining traction today, the sky is quite literally the limit.

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