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Startup Opportunities in Cloud Computing

Startup Opportunities in Cloud Computing

Cloud computing is still all the rage in the business world these days. Yet I find that most business people don’t understand and fully trust it, and I defy even the technologists to define it in ten words or less for business people. Many say it’s just marketing hype applied to old principles that have been around for a long time.

A typical definition (from Wikipedia) is that “cloud computing, is Internet-based computing, whereby shared resources, software and information are provided to computers and other devices on-demand, like a public utility.” That’s about 25 words which I’m certain doesn’t paint a very precise picture to the entrepreneurs I know.

Putting aside the acronyms and technical jargon, I think I can distill the essence of the cloud computing vision to the following five key points:

  1. Buy service from a central utility, rather than buy assets. Now you can pay for a metered service delivering compute power, data, and storage, based on your business demand, through the Internet. No need to buy and manage these as assets. This is a great cost leveling advantage to businesses, which used to be called time sharing.
  2. Maintenance and support are provider responsibilities. Small companies no longer need an IT staff, with the inherent costs and management responsibilities. That allows them to focus on their core competencies, reduce overall costs, and be more agile in responding to market changes.
  3. Access to new services and data is instantly global. Employees don’t need to come to an office to do their job, and customers don’t need special software installed access a new application. International standards and localizations are assumed from the beginning, rather than added much later.
  4. Availability is 24/7, just like your electric utility. No more down time on weekends, or during the nightly backups. The Internet is a huge power grid that services computing needs (cloud computing) of businesses and consumers, just like the electricity grid services power needs (cloud power).
  5. Easy integration of customized applications. People have traditionally bought their own computers simply to provide a common platform where all their applications could talk to each other, even though customized, and share data. The cloud provides these transformations with security and integrity.

Make no mistake about it, these are the dreams, not the reality today. Even the pundits agree that cloud computing is still for “early adopters,” meaning it’s not all there yet. Many people can quote cloud computing successes, like businesses using Amazon Web Services for huge scaling, or failures, like the Google App Service major outage a while back.

Other gray areas include how to do secure credit card transactions in the cloud, tax considerations for international operations, multiple virtual machines in one cloud, and properly addressing differing geographic regional requirements in a single cloud. Then there is the connection problem of sharing data with standard applications not in the cloud.

When a vendor starts talking about his paradigm shift to a dynamically scalable and virtualized solution in the cloud, with SaaS (software as a service), PaaS (platform as a service), MSP (managed service provider), or web services in the cloud, tell him to skip ahead to the chart which shows you how well he does on the five points above, and the five gray areas outlined.

Even though “the cloud” is a familiar cliché for the Internet, cloud computing is still very much an opportunity for startups, with lots of room for innovation and better solutions. Now is the time to jump on board, but a cloud usually means you should expect a few storms ahead before you see the sunshine.


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Original Publication DateAugust 19, 2011
Related categoriesNuts & Bolts, Technology Trends

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