Why cloud computing is ideal for start-ups

By: Kerry Hale

Date: 18 April 2012

A recent survey by BestVendor of more than 550 US start-ups found that 57 per cent were using Google Apps for email, 71 per cent were using QuickBooks for accounting, 59 per cent were using Salesforce as customer relationship management and 39 per cent were using Dropbox for storage. All exist ‘in the cloud’ – so what is the appeal of cloud computing?

A major attraction is cost, of course. Some applications are free, and those that aren’t allow businesses to pay monthly. These applications also require no space on your computer, while businesses don’t have the hassle of upgrades or the worry of losing data if their computer should get lost or broken. Let’s face it – many start-up owners don’t want to think about their IT. They just need it to be there – and work – so they can focus on running and growing their business.
Start-ups aren’t alone; established businesses are also making the move toward the clouds, but more slowly and with slightly more anticipation. A recent survey of 511 IT professionals by InformationWeek revealed that 27 per cent said they won’t be moving to cloud computing, while only a third were actually using it.

Why are larger businesses taking their time? Aside from questions about security, they already have their software needs taken care of in-house and although they see a future ‘in the clouds’, the initial transfer is likely to be a huge task.
Start-ups are in the best position. They can start as they mean to go on; they often have little or nothing to transfer, which means they can start quickly and cheaply. Plus, as they grow, they can continue to add additional software and users.
These are the five main reasons why start-ups are reaching for the clouds.

1 No major set up

When a start-up reached a certain size, traditionally they would have considered investing in their own office-based server, which could cost between £500 and £2,500. If they use the cloud, the server is managed by a supplier, which eliminates that large initial outlay.

2 Predictable costs

Another cost benefit for start-ups is there are no surprises. New software can be added when you need it, new users added instantly. And although the monthly payment will rise to reflect the additions, there are no lump sums; it works just like your mobile phone bill and so forecasting can be done easily and accurately.

3 Scalability

Cloud computing allows expansion in line with your business growth. Many start-ups grow quite quickly, but can shrink with equal speed. With the cloud, software and users can be removed as quickly and easily as they can be added and so the bill is reduced accordingly. As soon as you grow, you don’t need to invest in further servers or software, you simply let your provider know and they’ll expand your cloud again.

4 Flexibility

In the early stages, many business-owners work from home. Collaborating with partners, associates, even employees, can be done very easily with the cloud. There is no need to work at the same location. Documents can be shared, computers remotely backed-up, and your software can be accessed anywhere.

5 It’s green

Not all of course, but many start-ups advocate sustainability. Clouds have been proven to be green and so this provides another incentive for start-ups to consider the cloud.

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