Cloud Computing for Tech Startups

There was a time not too long ago when technology startups trying to make a mark on business, industry and society, were held back by the very cost of technology itself. The high voltage computing processing muscle they needed to pursue their dreams would run into thousands and thousands of dollars thanks to the prohibitive cost of computing infrastructure. Included in it was not only the cost of heavy duty servers but also the software required to run them.

With the arrival of cloud computing in all its full force, tech startups no longer had to make upfront investments in infrastructure. This was indeed a welcome development for the entire startup movement as a whole especially since their financial and business success was never guaranteed in the first place. Let us take a quick moment to understand why hosting in the cloud has not only been described as the single most powerful catalyst for the growth of the tech startup movement but also a rocket launcher that has put the tech startup industry into an altogether different orbit.

 Economies of Scale and Focus

Much has been written and said about the significant cost savings the upward mobility to the cloud tends to generate. Server investments are negligible, scalability is controlled through load balancing, and not just customer data but the proprietary code that differentiates the tech startup is safer than it can ever be at the startup’s on-premise data center. Equally significant is the fact that once the formalities with respect to a cloud presence have been completed, tech startups are free to focus exclusively on innovation using a subscription-based pay-as-you-go model. Distributed teams located in diverse geographies are able to work in unison developing and refining code, engage in simultaneous cross communication through video conferencing, and eventually serve their customer communities without having to compromise on speed and performance in any way. As Jeff Weiner, CEO of LinkedIn, has rightly observed, the cloud “makes it easier and cheaper than ever for anyone anywhere to be an entrepreneur and to have access to all the best infrastructure of innovation.”

 The Receiving End

Cloud hosting service providers, especially those who focus on managed cloud hosting either as an SaaS, PaaS or IaaS, have contributed not only to the startup movement by helping startups control costs and remain focused on their core activities, they have also provided powerful platforms for those companies which  sustain startup growth by helping to keep operations  lean. Project management companies such as BaseCamp and Liquid Planner, for instance, are able to deliver their services affordably in part because they function entirely on the cloud. The same holds true for cloud-based collaboration services such as Igloo which leverages the cloud to deliver a higher brand of performance at a price that startups can afford. Crowdsourcing conduits of Big Data research such as Kaggle, on whom startups tend to rely, also operate from the cloud while providing data analysis solutions to startups affordably.

According to a research study conducted by the Manchester Business School along with two other organizations in which 1300 companies in the US and UK participated recently, 88% of the companies reported that they had experienced  significant cost benefits of the cloud, while 56% had generated revenue using the technology, and 49% had expanded operations ever since their cloud implementation. If you are a tech startup and have already assumed your rightful place on the cloud, we would love to hear from you. Tell us how it has been so far and share your experience with others so that we can all benefit from your insights.

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Cloud Computing and the E-commerce Industry

The unprecedented growth of the Internet and the phenomenal commercial opportunity it has unveiled, has propelled e-commerce to experience growth rates that have never been witnessed before. The web hosting features and resources required for e-commerce functionality call for uninterrupted performance, reliability, and data security among other factors. This is perhaps why we have all noticed the adoption of cloud computing by the e-commerce industry at an accelerated pace. However, not all cloud hosting service providers deliver services at the same level. This is why it is a good idea to conduct a quick assessment of your needs as an e-commerce enterprise when benchmarking various cloud delivery services and platforms against your needs. We present three important considerations. ecom

Choosing a Cloud Hosting Company

There are several talking points to consider when you feel it is time to take your e-commerce enterprise to the next progressive milestone by transitioning to the cloud. Some of these factors and considerations may not come to you as a surprise because of the frequent press they receive. Others may be interesting enough to peak your curiosity. They are all, however, quite significant and deserve equitable if not equal attention as you plan the migration.

Access Speeds of Cloud Hosting Servers

Experts describe the speed of access to web pages as the single most popular reason why e-commerce companies pursue the cloud migration pathway. Amazon increased its overall gross revenue by 1% for every 100 milliseconds of improvement in the speed with which its flagship website served up web pages. Inferior access speeds typically lead to traffic losses which invariably translate into lost revenue. According to a study conducted by the Aberdeen Group, page load delays cost e-commerce enterprises up to $117 million in lost sales annually. Shopping cart abandonment has also been linked to poor server speeds. Owing to its distributed computing capability, near instant scalability during peak times, and built-in redundancies that literally guarantee a zero downtime performance record, cloud servers maintain consistent access speeds regardless of how much traffic they are experiencing at any given point in time. This functionality is even more critical during the holiday shopping season in November and December each year when e-commerce activity is at an all time high. Many leading edge cloud vendors currently use Tier 3 a+ data centers to deliver optimal performance while fully supporting dedicated e-commerce applications such as shopping carts, inventory management software, CRM, live chat and help desk solutions simultaneously without any compromise to access speeds.

Security of Financial Data

Although traditional web hosting companies provide a level of data security that is industry compliant, cloud service providers have seemingly raised the bar through superior technology and self-governance. You will experience no difficulty in locating a cloud hosting company  is ISO 27001 compliant. Many cloud vendors also achieve SysTrust certification. For credit card and financial data processing in a fully secure and encrypted environment, the cloud hosting company you eventually select should be able to design PCI-DSS solutions. It should use the highest level of SSL encryption available which currently stands at 256 kb encryption. There are several other data security measures employed by most cloud hosting service providers such as biometric screening of personnel, two-factor authentication, and IDS which are now industry standards in the cloud.

The Trust Factor

Customer perception has a great deal to do with e-commerce success. If your enterprise can communicate to your customer community through newsletters and email alerts that they will never experience down time, always receive access to your product pages at consistent speeds, and never have to worry about their privacy and credit card data security, all thanks to state-of-the-art 21st century cloud technologies, chances are high that your customer attrition rates will seldom become a cause for concern all things being equal. Share the credentials of the cloud hosting vendor you eventually select with your customers as yet another confidence and trust building measure. Educate them about the multiple layers of protection the cloud provides them. You are sure to experience positive feedback from your customers sooner than later.

Concluding Thoughts

Managed cloud hosting services provided by qualified vendors allows e-commerce enterprises to focus on their core activities related to the sale of products and services on the Internet while technology related issues and challenges are handled by cloud vendors. Moreover, the pay-as-you-go model facilitates improved levels of resource management and usually generates long-term savings. It is therefore no wonder that the e-commerce industry continues to experience unbridled growth worldwide. In a recent study published by ComScore, Q1 2014 saw desktop e-commerce spending rise 12 percent year-over-year to $56.1 billion, marking the eighteenth consecutive quarter of positive year-over-year growth and fourteenth consecutive quarter of double-digit growth. mCommerce spending on smartphones and tablets added $7.3 billion for the quarter, up 23 percent vs. year ago, for a digital commerce spending total of $63.4 billion in the first quarter of 2014.

Has your e-commerce enterprise finally decided to connect with the cloud? What are some of the other factors you will take into consideration as you plan a cloud migration strategy? We would be very interested in hearing from you about your experience so far through your comments below.

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5 Real Reasons to Migrate to the Cloud in 2014

There are many ways to classify businesses both large and small.  Some based on geographic footprint, location, age, industry, size, products, services etc. However, another way to classify businesses in 2014 which has already gained substantial attention is those that have moved to the cloud and those that have not .

Before embarking on a discussion about the five real reasons why your organization should indeed migrate to the cloud this year, here are some of the popular reasons you should have already considered:

There are other reasons which are equally strong and perhaps more convincing. Use them as talking points during your next board or management meeting and earn the credit for triggering the migration process:

  • Scalability in an instance
  • Flexibility to switch vendors and platforms with minimal notice without cost overuns
  • Resilience and an overwhelming degree of reliability
  • Resource conservation owing to workforce redundancy
  • Increased operational efficiency
  • Absence of wasted capacity, routine server maintenance or daily backup issues
  • Data security and protection from denial of service attacks and spam
  • Statutory compliance when housing and processing medical or government data
  • Guaranteed uptime and SLA
  • Access to the latest licensed software and infrastructure without having to pay for it entirely
  • Overall Cost savings

1. The importance of planning for the future

Planning today will avoid over-deployment tomorrow. You will rarely have to plan for computing resources and risk over-deployment and additional costs once your organization is in the cloud. Cloud hosting lets you scale up or scale down according to demand and pay for only those resources you consume. For instance, if you happen to operate an ecommerce company, you will definitely need to scale up for major shopping days during the festival season such as Black Friday, Cyber Monday and the entire Christmas season. Regardless of whether you choose a SaaS or IaaS service provider or a cloud computing company that combines both, you will never risk over-budgeting your resources to play it safe.

2. Improved cross-team collaboration

Because of the ‘anytime anywhere” critical coverage the cloud provides, even members of small company teams such as application developers, sales reps and others can collaborate with one another from remote locations without compromising data security and privacy. Small and medium sized businesses no longer have to invest in expensive VPNs or Intranets and maintain them.

3. Flawless Disaster Recovery

It is common practice not to dwell too much on a discussion of potential disasters regardless of whether it is related to our personal lives or to our professional endeavors. Nevertheless, disasters do strike and at times when we least expect them. When it comes to our data resources, our websites and our operations, the key issue is not what caused the disaster and the resulting down time but how soon our servers will be back up again. With cloud hosting, such possibilities are negligible because expert teams are set up by cloud service providers and are on watch 24X7 waiting for a data disaster to occur so that they can fix it instantly. Disaster recovery as a service or DRaaS is an integral component of the cloud hosting service model and will always be factored into your SLA by your cloud service provider.

4. Focus on Core IT and Innovation

Now that your IT teams no longer have to address primary server and maintenance issues, you can now deploy them in new spheres that are directly related to your core business. Examples could include upgrading to a more robust and feature rich email management system, help desk software, RFID inventory management, and new payroll and accounting processes.

5. 2 Tier Operation

If you migrate to the cloud, one of the recommendations your cloud computing company will present is to suggest that you replicate your on-the-ground infrastructure in the cloud as a real time backup in addition to using cloud resources exclusively. This is excellent advice to follow because in the unlikely event of your office premises being flooded, contaminated or even destroyed, your entire workforce can function either from home or a hotel suite without knowing the difference. If the disruption is caused due to a natural catastrophe such as a hurricane, your clients will appreciate your ability to function with zero down time. Your enterprise will undoubtedly gain an edge over your competition. This is a significant vote for the cloud which is often implied but rarely discussed at length.

A study conducted by Forrester Research of 600 respondents belonging to the information technology sector from twelve large enterprises that had migrated from on premise desktop applications to the cloud experienced a risk adjusted ROI of 307% with a break-even attained in just 7 months. The migration provided an average savings of approximately $21 per user per month.

While resource conservation does play a role in the decision-making process, there are other grounds on which to initiate a healthy internal debate. Has your organization decided to peak into the cloud yet? Have you found other reasons to migrate to the cloud that add more punch to the argument? We would love to hear from you through your comments.

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