Over the past few years, cloud computing has become a hot topic. A variety of companies -- like NetSuite (N) -- have built applications that are based on Internet technologies. The result is improved productivity and lower costs.

Yet, in order to continue to propel the cloud-computing revolution, there needs to be a strong technology foundation, such as with servers, operating systems and application development tools. And one of the top players in the market is Red Hat (RHT).

It seems that cloud computing, which uses the Net to deliver applications, is a new trend. But some of the leaders have been in business for more than a decade. One is NetSuite (N). The company develops enterprise resource planning (ERP) software, which helps companies manage inventory, payroll and other key financial functions.

And NetSuite continues to see traction. In its latest earnings report, revenues increased 21% to $52.1 million. For the year, revenues came to $193.1 million. Operating income was $3.5 million for fourth quarter.

Analyst Upgrades

• Best Buy (BBY) was upgraded to top pick from outperform at RBC Capital, as the firm thinks the company's valuation is inexpensive while it will perform well during the holiday season.
• Credit Suisse upgraded CF Industries (CF) to outperform from neutral, citing favorable fundamentals in nitrogen and phosphate markets.
• Canadian Solar (CSIQ) was raised to buy from hold by Jefferies, which cited expectations for higher selling prices next year and cost savings from sourcing more components internally.
• BMO Capital upgraded RC2 Corp. (RCRC) to outperform from market perform as the firm believes that RC2's baby products are performing better than previously expected.
• Ericsson (ERIC) was upgraded to neutral from underperform at BofA/Merril.
• ProLogis (PLD) was upgraded to buy from hold at Stifel Nicolaus.
• Constellation Energy (CEG) was upgraded to outperform from neutral at Macquarie.

Option traders appear to be setting up for a bullish move on Cypress Bioscience, Inc. (CYPB). Traders plowed into 1,305 new call option contracts -- 19.19 times the average volume -- on the stock on Friday. And we know that traders were eager to get into this trade because 100% of the trades came in on the ask price.

Cypress has been in a downtrend since hitting a high around $10.00 in July 2009. The stock closed Friday at $3.39, down 10.79% during the past month.

For the past few years, the shares of SAP (SAP) have had little direction. While the company has solid cash flows and a massive customer base, the growth ramp has stalled. Of course, SAP is not alone. Other tech giants like Cisco (CSCO), Intel (INTC) and Microsoft (MSFT) have faced the same problem.

Yet, according to Bloomberg.com, SAP thinks it can rev things up again. How? Yes, the opportunity is China.

In the fast-growing cloud computing space, Salesforce.com (CRM) is the franchise company. However, this means that the valuation is at premium levels. For example, the stock trades at nine times revenues and 174 times earnings. In other words, this stock is now for those who think the growth ramp will continue. And yes, based on the most recent quarterly report, it does look like good times will not end for awhile.

Profits came to $14.7 million, or $0.11 per share. But excluding certain stock-based charges, the adjusted earnings were $0.29 per share. As for revenues, these climbed 25% to $394.4 million.

No doubt, the dominant player in cloud-computing is Salesforce.com (CRM). And investors have certainly benefited nicely. But what are some other plays in the sector? If cloud-computing is a growing industry, other operators should benefit as well, right?

Definitely. And it looks like one is NetSuite (N), which develops an enterprise resource planning platform (this manages payroll, inventory, HR and so on). In fact, it is the only type of its kind that has massive scale. And, as seen by its latest earnings report, NetSuite is certainly gaining momentum.

NetSuite (N), which provides a suite of web-based business applications, usually has a tough first quarter (this is typically the case for software companies). But this time around, the company was able buck the trend. In Q1, NetSuite had a record quarter, with revenues up 5.7% to $43.9 million and cash flows from operations of $4.7 million.

I recently attended the NetSuite developer's conference, and got a good background on the overall strategy. I also was able to talk to many of the company's partners. All in all, there was much enthusiasm for the NetSuite platform as companies want to benefit from the growing customer base.

Cloud computing is red-hot in the tech world. And yes, it has been a money-maker for investors, especially shareholders in Salesforce.com (CRM).

No doubt, there are other strong players in the market. But it can be easy to get overlooked.

An example is NetSuite (N). The company is a pioneer in cloud computing, getting its start in 1998. Since then, NetSuite has built a comprehensive offering of business applications for things like inventory, HR, e-commerce, accounting and so on.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Aol Inc. (AOL) reported a better-than-expected Q4 profit and said its revenue also topped estimates.
• Burger King Holdings Inc. (BKC) higher Q2 earnings topped analysts' estimates but same-store sales fell.
• Clorox Co. (CLX) higher Q2 earnings beat expectations and it lifted its full-year earnings guidance.
• Comcast Corp. (CMCSA) Q4 earnings more than doubled and beat Wall Street expectations, but shares fell.
• Gap Inc. (GPS) shares jumped after it forecast earnings above analysts' expectations, boosted by January sales.

The enterprise resource planning (ERP) software industry is mostly dominated by major players, such as Microsoft (MSFT) and SAP (SAP). However, because of the expense and complexity of the offerings, the recession has been tough. It's easy for companies to put off spending on ERP.

But there is one player in the space that continues to grow: NetSuite (N). In the latest quarter, the company posted revenues of $42.96 million, up from $41.40 million in the same period a year ago.

By any historical standard, it's been a horrible recession. Just surviving has been a big accomplishment.

However, this "survivor mentality" can be a problem. If anything, it can prevent your business from eventually growing.

Growing? Yes, that's right. Taking a look at the recent economic indicators, it does look like the economy is on the mend.

Recently, the stock market has had an explosive rally. A key reason is that Corporate America has aggressively cut costs, resulting in stronger profitability.

However, cost-cutting can be dangerous. Are long-term investments being starved? Is there a sacrifice in quality by moving to another vendor?

Well, the good news is that it's possible to cut costs without reducing quality. If anything, these efforts may mean more cash flows for other projects, which will position a company for growth when the economy makes a comeback.

Here are some highlights from last week's earnings coverage from BloggingStocks:

• Alcatel-Lucent (NYSE: ALU) reported a surprise profit but is expected to return to losses next quarter.
• Coach Inc. (NYSE: COH) profit and revenue were in line with expectations, sending shares lower.
• Corning Inc. (NYSE: GLW) posted better-than-expected earnings but other concerns drove down shares.
• eHealth Inc. (NASDAQ: EHTH) reported solid Q2 numbers but Wall Street was not impressed.
• Goodyear Tire & Rubber Co. (NYSE: GT) posted a smaller-than-expected Q2 loss, sending shares higher.
• JAKKS Pacific Inc. (NASDAQ: JAKK) reported swinging to a Q2 net loss and revenues were flat.

NetSuite (NYSE: N) is one of the top players in the cloud-computing sector. In fact, three of the four most recent tech IPOs -- OpenTable (NASDAQ: OPEN), SolarWinds (NYSE: SWI), and LogMeIn (NASDAQ: LOGM) -- use the company's software to do things like manage customer relationships, financials, ecommerce, and so on.

This momentum is helping to boost NetSuite's top line. Despite the recessionary headwinds, the company's revenues increased 10% to $40.3 million, according to the Q2 report. While there was a net loss of $5 million, or $0.08 per share, NetSuite posted positive cash flows of $1.4 million.