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.