The three technologies that hold the most promise for investors are cloud computing, soft-as-a-service and so-called “Big Data,” according to Charlie Chai, manager of the Fidelity Select Technology Portfolio, who spoke briefly on each during a conference call hosted late last week by Fidelity Investments.

Cloud computing refers to services that use networks rather than local computers to managed data and run applications. For large companies, Chai said, the cloud can replace expensive in-house data centers and IT department with services, delivered over state-of-the-art networks that are cheap, flexible, and reliable.  For consumers, cloud computing allows applications to be delivered from a remote data center to a variety of personal devices, including smartphones, tablets or PCs.

Chai also cited software-as-a-service, which is a form of cloud computing. In a SaaS environment, individuals and companies access software applications through web browsers and are charged on a pay-per-use model.  SaaS eliminates the licensing, installations, maintenance, and consulting services that companies usually pay with hosted software. With SaaS, he said, “the cost of starting and running a business falls dramatically.”

The third opportunity for investors looking at the technology sector is “Big Data.”  Big Data basically refers to the large and varied amounts of time-sensitive data companies collect. Big Data, according to Chai, is being driven by two developments. The first is the pace of data accumulation, which has increased significantly with the rise of online transactions, social media posts, and videos. The second is the demand by businesses – always looking to increase sales and develop new products – to dig deeper into the information they have on their customers. Big Data technologies are being developed that help companies analyze large, distributed datasets in realtime.

“Big Data technologies have the potential to fundamentally change how business in conducted – as well as operated,” he said, adding the he can foresee companies exploiting Big Data to help them manage plants and labor forces.

John McCormick writes for Financial Planning.