As I have been going through my plans to adjust the structure of the Next Wave Portfolio, I have been looking at a variety of segments across the emerging tech landscape. Over the coming months, I will be reorganizing the portfolio to give it more exposure to some of the most promising broad trends—including the cloud, mobility, security and Big Data analytics.

Within these general growth themes, I am searching for individual companies that have the ability to expand the top line at a faster rate than their market segment in order to gain share. Upside revisions to revenue growth are always a positive factor. I want companies that are driving innovation, introducing new products and solutions to expand their portfolios.

I am looking for names that are bringing on new customers at a rapid pace, while at the same time selling deeper into the installed base. The pricing environment is always important, as gross margin should be relatively steady or advancing. And I always want to see growth companies meaningfully expanding their sales forces to help drive new business.

Standalone valuation is a key metric (especially compared to historical levels and those of direct competitors), but valuation relative to expected top-line growth is more important.

To get started, I am adding two names to the Next Wave Portfolio. Both are benefiting from the massive shift to cloud software from legacy on-premise solutions that is taking place these days at organizations big and small. The move to the cloud is all about cost savings, quick implementations, ease of use and overall improved efficiencies.

The first addition is Marketo (MKTO), a provider of cloud-based marketing automation solutions. Customers use the Marketo platform to maintain communications (via a variety of social-selling channels) with current customers and attempt to find new ones. The company is known as a specialist in lead nurturing, helping its customers move a potential prospect to a completed sale.

Marketo’s current positive trajectory (the CFO believes the company can do 30%+ revenue growth for some time) provides a good indication that customers view marketing automation as an important communications channel to customers, and not just some adjunct to the sales functionality.

There is no question that marketing automation these days is a highly dynamic segment that has become increasingly dominated by larger enterprise-software players that have recently bought into the space. All of the big enterprise names are involved here—including Oracle, SAP and Salesforce.com.

But Marketo, one of the very few remaining independent publicly traded companies in this segment, argues that marketing efforts, to be successful, can’t just be a bolt-on afterthought to other types of enterprise software, such as customer relationship management (CRM).

Clients want a vendor that’s agile and fully capable of grasping the intricacies of marketing to businesses and consumers alike, not just some enterprise resource planning (ERP) player that acquired a marketing automation solution to add to its portfolio.

While there has been no pivot away from Marketo’s focus on customers in the business-to-business (B2B) segment, the company continues to expand its presence in the business-to-consumer (B2C) market, which is now a material part of new business bookings, and represents as much as 75% of the company’s total addressable market.

Marketo is pushing ahead with new endeavors, including entering the Japanese market via a joint venture; introducing a Real-Time Personalization (RTP) offering that allows marketers to make their website and mobile channels as personal as their emails; and debuting Marketing Calendar, a tool that allows customers to plan and manage dozens of marketing campaigns in real-time via a highly interactive and intuitive user interface.

With its own dedicated sales force, the RTP app holds a lot of promise because it can bring in new accounts in addition to being sold into the established customer base. The company in general has been getting more “share of wallet” from the installed base, as evidenced by the subscription dollar retention rate trending up to 103%.

In the second quarter, Marketo’s revenue grew 60% year over year to $36 million, vs. the consensus estimate of $34 million. Gross margin of 69.2% was unchanged from the first quarter, but up sharply from 59.5% in the year-ago quarter. Deferred revenue rose 74% year over year to $53.2 million.

The company in the June quarter added 144 new customers, bringing the total count to 3,359. Among Marketo’s largest customers: Cisco Systems, General Electric and Honeywell.

For the third quarter, the company’s revenue guidance of $36.5 million to $37.5 million came in above the consensus estimate of $35.8 million.

For 2014, Marketo recently lifted its revenue guidance to a range of $143 million to $145 million from $138 million to $141 million previously. On the 2014 consensus revenue estimate of $144.9 million, the expected growth rate is 51.1%. For next year, analysts on average look for top-line growth of nearly 33%.

Down from the January high of $45, Marketo shares have a market cap of $1.1 billion, 5.9 times the 2015 consensus revenue estimate of $192.1 million. Recently trading around $28.35, the stock is attractive up to $30.

The second addition to the Next Wave Portfolio is Paycom Software (PAYC), a provider of cloud-based solutions for payroll and human capital management (HCM). From a single database, Paycom’s solution set includes talent acquisition (applicant tracking), time & labor management, payroll processing, talent management and HR management.

The company, founded in 1998 by CEO Chad Richison, has more than 10,000 customers. The average annual revenue retention rate (for existing customers during the three-year period ended 2013) was 91%.

When looking for new accounts, Paycom targets companies with between 50 and 2,000 employees (nearly half of all U.S. workers are employed by companies in this size range). In terms of the current customer base, 86% of Paycom’s revenue comes from companies in this target range.

Paycom went public in April 2014 (in the middle of the big momentum-stock correction) at $15 a share and opened for trading at $17.90. The stock got lost in the shuffle of recent tech IPOs, falling to a new low of $12.28 in the middle of July. Following a strong second quarter earnings report, the shares have bounced back to around $15.25.

In the second quarter, Paycom’s revenue of $33.3 million rose 39% (acceleration from growth of 34% in the first quarter), beating the consensus estimate of $31.5 million. Gross margin of 80.9% advanced from 80.1% in the year-ago period. Annualized new recurring revenue (an estimate based on the annualized amount of the first full month of revenue from new customers) hit $11.5 million, up 38.5% from a year ago.

Paycom plans to grow by increasing its presence in existing markets. It now has sales offices in 25 of the 50 largest U.S. metropolitan areas, with a total of 31 sales teams (made up of seven to nine sales reps per team); management believes its current markets could support up to 100 teams.

The company also looks to expand into new markets. Since September 2012, it has opened 10 sales offices, including five so far this year. Management sees an additional 50 untapped metropolitan areas where it could open sales offices staffed with at least one team. Paycom expects to open an additional six to eight sales offices over the next two years.

Another growth driver: expanding business with existing customers. In 2013, Paycom customers (new and old) utilized an average of 5.2 of 18 available individual applications on the platform, while new customers brought on last year averaged 6.2.

Part of the growth plan is to begin to target larger accounts (those with more than 2,000 employees), which today represent less than 5% of Paycom’s total revenue.

As a greater number of customers take a broader range of the company’s solutions, this bolsters Paycom’s overall gross margin. That’s because HCM solutions have higher margins than Paycom’s core payroll processing business, which accounted for 58% of total 2013 revenue, down from 60% in 2012 and 68% in 2011.

For the third quarter, Paycom issued upbeat guidance: revenue of $34 million to $35 million, above the consensus estimate of $33.7 million. For 2014, revenue guidance was lifted to a range of $143 million to $145 million from $139 million to $142 million previously.

The latest 2014 consensus revenue estimate of $144.1 million indicates growth of 33.8%. At a recent market cap of $775 million, Paycom trades at 4.2 times the 2015 consensus revenue estimate of $185.2 million (implied growth of 28.6%).

Paycom has a solid top-line growth rate and a reasonable valuation relative to that growth. The valuation also looks attractive going up against other comparable cloud-based HCM providers (including Ultimate Software and Cornerstone OnDemand). Paycom shares are attractive up to $17.50.