Do Startups And Entrepreneurs Need Cloud Cover?
Having started a startup myself, I have a soft corner for entrepreneurs. Unfortunately, I was looking for venture capital when there was not a cloud in sight. If there had been, I would have managed to get venture funding. How does cloud computing enable entrepreneurs to launch new products and services?
Cloud infrastructure does not constitute capital expenditure
Here is how a venture capitalist works – first he looks at the projected balance sheet. He then strikes down anything which looks like capital expenses. For example, if you plan to buy office space. Instead, venture capitalists prefer leasing of office. Buying online and offline IT infrastructure also falls within the ambit of capital expenses. Earlier we never had the option and therefore venture capitalists had to bear the initial cost of servers and related equipment. A few years back the cost of hardware used to be high and therefore, people like me could not attract venture funding.
With cloud infrastructure the entire scenario has changed. All online hardware can now be easily hired. This means that expenses on this account need not be put under the capital account. Venture capital firms are happy that they don’t have to spend on idle infrastructure. Moreover we have flexibility in deploying server instants as required. Scaling is a fantastic opportunity for startups. In fact, it’s now possible to launch an online venture without any financial assistance. We can start with a single server instance and scale up as the demand increases.
Reduction in staff requirement and associated expenses
The beauty of cloud infrastructure does not stop with funding. We can cut down drastically on expenditure which we would otherwise incur for employing technical staff. The cost involved in maintaining technical staff had gone up dramatically. For every technical hand you employ, you need someone to look after backend work. This adds to the working expenses. With managed cloud services you can whittle down your technical staff to nil. I would consider this as the most important advantage of cloud services. With a bit of tech savvy, an entrepreneur can now start a business without any capital expenditure and with no employees. You just need an idea and you are up and running. What a miracle!
There are different types of professional managed services offered by GMO Cloud America. Outsourcing your resources with us does not only reduce your burden of server administration and costs but gives you more time to focus on your core business.
Uncertainty in startup businesses
I don’t blame venture capitalists for being extra careful. It’s a fact that for every successful startup, there are a hundred failures. Even if you are fully confident, there is no surety that you will be successful. Earlier, a few years back, if your business went down you went down along with it. You never got another opportunity. With cloud computing things have changed. You can put your ideas into practice without risking your life and savings. You can begin your venture with a single server instance and scale up as you go. In case you don’t find an audience you can always wind up and give another idea a go. This is really great for startups.
Conclusion
Cloud infrastructure is the way to go for startups and entrepreneurs. It’s a boon which must not be ignored. I wish the situation was the same a few years back. I would have been a millionaire now. Grab this opportunity and join the cloud bandwagon. Happy journey!
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About the Guest Author:
Sankarambadi Srinivasan, ‘Srini’, is a maverick writer, technopreneur, geek and online marketing enthusiast rolled into one. He began his career as a Naval weapon specialist. Later, he sold his maiden venture and became head of an offshore Database administration company in Mumbai. He moved on as Chief Technology Officer of one of the largest online entities, where he led consolidation of 300 online servers and introduced several Web 2.0 initiatives. He holds a Master’s degree in Electronics and Telecommunication.
