Public Cloud for Startups - 9 Reasons

Public Cloud, for startups, is a godsend mechanism of technology consumption. It was mainly due to the existence of Public Cloud, a twelve-person company, Instagram was sold to Facebook for $1 billion US dollars within two years of its inception. Before the invention of Public Cloud, startups needed to get into a CapEx intensive technology consumption model. They needed to get a space for data center/arrange colocation, procure/rack and stack servers, and storage, wire the networks, and then start coding and rollout of products and/or services. More than Capital needs, this process is time-consuming and change-averse. It normally takes six to eight weeks to get the infrastructure going in a private data center before the first line of code can be deployed. Also, once the infrastructure is in your private data center, you cannot change the type or scale of it on a short notice. In other words, infrastructure becomes illiquid. Along with the availability of Public Cloud, the rise of Open Source and convergence of other technological advancement like REST APIs has considerably lowered the barrier to starting software companies. Following are eight key advantages of Cloud for startups.

1. Lower Barrier to Entry: Using Public Cloud, startups can start with bare minimum infrastructure with zero cost, as most Public Cloud Service Providers have free limited introductory services for a period. If your startup happens to be part of an incubator (startup school), Public Cloud Service Providers will give you up to $150,000 (amount varies by provider and country) to be used in the?first year of your startup’s inception. Besides cost benefits, the barrier to entry is lowered on the skills side as well, your workforce doesn’t need to know how to build and operate a data center, and you also get out of the hardware procurement business.??
2. Better Partnerships and Alliances: Being in Public Cloud enables you to partner with vendors which have complex products and services compared to your products and services. Major reason for this is data proximity (better latency) and Cloud Service Providers startup community programs. For Startups, another benefit of such Partnerships and Alliances can be in the shape of joint sales opportunities. VC community also facilitates such partnerships and alliances via their preferred Public Cloud Providers and their Startup ecosystem.?
3. Simplifies Geographic Access/Coverage: For a startup, which is using Public Cloud, it’s much easier to expand into markets in secondary geographic markets/countries because of service availability in those countries, otherwise setting up a new data center in a foreign country is very expensive proposition and a huge hassle on many fronts.
4. Access to (almost) Infinite Infrastructure Capacity: One of the hardest parts of running any technology company is the resource planning on the infrastructure side. How much compute and storage are needed and when it’s needed are nearly impossible to predict. Prior to the introduction of Public Cloud, companies always planned their data center capacity based on peak (even worse, expected peak) workloads. Being in Public Cloud takes that hassle away, as long as your application is written in a way, where it can leverage the elasticity of Cloud, you can add or shed compute and/or storage capacity on a minute-by-minute basis and you pay for what you use. Besides infrastructure-related economic benefits, it saves you a lot in management costs and it makes product development and operations much more agile. Also, being aware of underlying technology stacks helps startups in their technology choices as scale grows. For example, with the knowledge of underlying infrastructure, a media or gaming company can assess if it is more cost effective to run in a colo or private data center. Making choices around technology which has common architecture between Public Cloud and on-prem infrastructure increases the optionality for the high growth startups.
5. Begs Better Valuation: It is proven that the startups which leverage Public Cloud, invent at a higher pace, their product/service delivery cycles and delivery mechanisms are more streamlined as compared to their peers or incumbents which do not use the Public Cloud. Investors tend to reward such companies with higher valuations for their next rounds of funding.?
6. Access to Latest Technology: I believe that around year 2018/2019, the innovation in Public Cloud surpassed the innovation in “on premise data center technologies”. There is another huge factor while consuming technology via Public Cloud, I call this effect “The Feature Proximity”. The idea of Feature Proximity is that when you are using five services, as an example, from a Public Cloud Service Provider and you need to get to two new technology services to enhance your products and service, those additional services are available in close proximity to your Cloud Service Provider (or their partner sitting in your Cloud Service Provider’s environment). This eliminates the need for data movement and new contractual agreements with different technology and/or service providers. This will remove technical friction which helps your startup grow at a faster pace.
7. Access to Better Talent Pools: Being in Public Cloud, your startup gets to hire people who have already been trained in the technology of your Cloud Service Provider. Major Cloud Service Providers invest tens of millions of dollars into their training and certification programs every year. During 2020 reInvent, Amazon Web Service announced that they will help 29 million people globally grow their technical skills with free cloud computing skills training. Similarly, in October 2021, Google has announced that Google is aiming to train 40 million people with Google Cloud Skills. Intel's Cloud University also provides training and certification in multiple cloud environments.
8. Security: Before the 2006-2007 timeframe there was a myth that Public Cloud is less safe than private data centers. That is just a myth, and with time it has been proven that Public Cloud Service Provider environments are more secure than that of private data centers. This is mainly because Cloud Service Providers can procure and deploy the best-of-the-brest security technology, and they can afford to hire the best security personnel.
9. Workload Specific Optimized Compute: Achieving performance optimization and value can only happen if you are intentional in your instance purchase and aware of the underlying technology. Startups which are working in Crypto/Web3 arena need access to specific types of compute for their workload. These benefits come from enhanced software performance and functionality, resulting in infrastructure cost savings, development productivity gains, and more efficient and effective use of open-source software to generate improved business results, which makes startups more cost-effective as compared to incumbents they compete with in their respective domains. The Title figure from an Intel? sponsored IDC study shows the business benefits of Intel Optimized Software to businesses.?

In closing, besides giving a huge time-to-market advantage, Public Cloud provides huge benefits to startups in the shape of pay as you go, feature breadth, market reach (through marketplaces), and simplifying SDLC and SysOps. From all the benefits listed above, agility is the best benefit that Public Cloud provides you as a startup. It is also a fact that Public Cloud has created a level playing field between mature technology vendors and startups. There is no doubt about the fact that Public Cloud will remain the most attractive choice of platform for startups for the foreseeable future. It’s highly suggested that entrepreneurs do their due diligence on Startup related programs from major Cloud Service Providers and build their products and services leveraging all these Public Cloud benefits. Building startups in private data centers should be a rare exception.

Go build!

[THIS CONTENT IS SPONSORED BY Intel?]