At a recent event here in Indianapolis, also known as “Sili-corn Valley” to some, a friendly attendee named Kay submitted this question: “How can cloud computing be an advantage to a startup business?”

Let’s start with the basics. What is cloud computing? According to the NIST Cloud Computing Project, cloud computing is “a model for enabling convenient, on-demand network access to a shared pool of resources (e.g. networks, servers, storage, applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.” Yes, there are lots of definitions of cloud computing out there, but this one is very suitable and widely accepted.

Now, what constitutes a startup? Startup companies can come in all forms, including those that are simply life-style companies, but the phrase “startup company” is often associated with high growth, technology oriented companies. Investors are generally most attracted to those new companies distinguished by their risk/reward profile and scalability. That is, they have lower bootstrapping costs, higher risk, and higher potential return on investment. Successful startups are typically more scalable than an established business, in the sense that they can potentially grow rapidly with limited investment of capital, labor or land. – via Wikipedia.

Now, let’s talk about that last line about successful startups. Successful startups need to be scalable, with the ability to grow rapidly with limited investment in capital, labor or land. We are beginning to get the heart of our friend Kay’s questions. Cloud computing sets startups up for those core abilities to control their investments (and keep them “limited”).

The major benefits of cloud computing are:

  • Limit upfront capital costs – shifting infrastructure costs from capex to opex
  • Better ability to match revenue with expenses – you pay for the resources you use, which for most companies equates to how much traffic and revenue they are bringing in the door
  • Ability to scale on demand – scale resources up and down as needed, this allows for rapid growth
  • Get to market quicker – the cloud enables companies to get up and running more quickly due to rapid provisioning and infrastructure experts doing what they do best
  • Spend precious labor costs on people who will better your core business and applications rather than people who must run the infrastructure (we do that for you)
  • No need to spend time and money housing, powering and cooling the infrastructure (this just reinforces the startup comment about the ability to grow rapidly with limited investment in capital or land, we’ve already discussed people)

Check out how DECA Financial Services (a startup) slashed 91% of their first-year infrastructure costs with the BlueLock Cloud.

For more info, check out BlueLock’s Advantages of Cloud Computing Blog.

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