Cloud computing is grabbing a lot of headlines these days.  As we have seen with SOA in the past, there is a lot of confusion of what cloud computing is, a lot of resistance to change, and a lot of vendors repackaging their products and calling it cloud-enabled.  While many analysts, vendors, journalists, and big companies argue back and forth about semantics, economic models, and viability of cloud computing, startups are innovating and deploying in the cloud at warp speed for a fraction of the cost.  This begs the question, “Can large organizations keep up with the pace of change and innovation that we are seeing from startups?”

Innovate or Die

Unlike large well established companies, startups don’t have the time or money to debate the merits of cloud computing.  In fact, a startup will have a hard time getting funded if they choose to build data centers, unless building data centers is their core competency.  Startups are looking for two things: Speed to market and keeping the burn rate to a minimum.  Cloud computing provides both.  Speed to market is accomplished by eliminating long procurement cycles for hardware and software, outsourcing various management and security functions to the cloud service providers, and the automation of scaling up and down resources as needed.  The low burn rate can be achieved by not assuming all of the costs of physical data centers (cooling, rent, labor, etc.),  only paying for the resources you use, and freeing up resources to work on core business functions.

I happen to be a CTO of a startup.  For us, without cloud computing, we would not even be in business.  We are a retail technology company that aggregates digital coupons from numerous content providers and automatically redeems these coupons in real time at the point of sale when customers shop.  To provide this service, we need to have highly scalable, reliable, and secure infrastructure in multiple locations across the nation and eventually across the globe.  The amount of capital required to build these datacenters ourselves and hire the staff to manage them is at least ten times the amount we are spending to build our 100% cloud based platform.  There are a hand full of large companies who own the paper coupon industry.  You would think that they would easily be the leaders in the digital coupon industry.  These highly successful companies are so bogged down in legacy systems and have so much invested in on-premise data centers that they just cannot move fast enough and build the new digital solutions cheap enough to compete with a handful of startups that are racing to sign up all the retailers for this service.

Oh the irony of it all!  The bigger companies have a ton of talent, well established data centers and best practices, and lots of capital.  Yet the cash strapped startups are able to innovate faster, cheaper, and produce legacy free solutions that are designed specifically to address a new opportunity driven by increased mobile usage and a surge in the redemption rates of both web and mobile coupons due to economic pressures.

My story is just one use case where we see startups grabbing accounts that used to be a honey pot for larger organizations.  Take a look at the innovation coming out of the medical, education, home health services, and social networking areas to name a few and you will see many smaller, newer companies providing superior products and services at lower cost (or free) and quicker to market.  While bigger companies are trying to change their cultures to be more agile, to do “more with less”, and to better align business and IT, good startups just focus on delivery as a means of survival.

Legacy systems and company culture can be boat anchors

Startups get to start with a blank sheet of paper and design solutions to specifically take advantage of cloud computing whether they leverage SaaS, PaaS, or IaaS services or a combination of all three.  For large companies, the shift to the cloud is a much tougher undertaking.  First, someone has to sell the concept of cloud computing to senior management to secure funding to undertake a cloud based initiative.  Second, most companies have years of legacy systems to deal with.  Most, if not all of these systems were never designed to be deployed or to integrate with systems deployed outside of an on-premise data center.  Often the risk/reward for reengineering existing systems to take advantage of the cloud is not economically feasible and has limited value for the end users.  If it is not broke don’t fix it!  Smarter companies will start new products and services in the cloud.  This approach makes more sense but there are still issues like internal resistance to change, skill gaps, outdated processes/best practices, and a host of organizational challenges that can get in the way.  Like we witnessed with SOA, organization change management is a critical element for successfully implementing any disruptive technology.  Resistance to change and communication silos can and will kill these types of initiatives.  Startups don’t have these issues, or at least they shouldn’t.  Startups define their culture from inception.  The culture for most startups is entrepreneurial by nature.  The focus is on speed, low cost, results.

Large companies also have tons of assets that are depreciating on the books and armies of people trained on how to manage stuff on-site.  Many of these companies want the benefits of the cloud without given up control that they are used to having.  This often leads them down an ill advised path to build private clouds within their datacenter.  To make matters worse, some even use the same technology partners that supply their on-premise servers without giving the proper evaluation to the thought leading vendors in this space.  When you see people arguing about the economics of the cloud, this is why.  The cloud is economically feasible when you do not procure and manage the infrastructure on-site.  With private clouds, you give up much of the benefits of cloud computing in return for control.  Hybrid clouds offer the best of both worlds but even hybrids add a layer of complexity and manageability that may drive costs higher than desired.  We see that startups are leveraging the public cloud for almost everything.  There are a few exceptions where due to customer demands, certain data are kept at the customer site or in a hosted or private cloud, but that is the exception not the norm.

The Zapthink Take

Startups will continue to innovate and leverage cloud computing as a competitive advantage while large, well established companies will test the waters with non-mission critical solutions first.  Large companies will not be able to deliver at the speed of startups due to legacy systems and organizational issues, thus conceding to startups for certain business opportunities.  Our advice is that larger companies create a separate cloud team that is not bound by the constraints of the existing organization and let them operate as a startup.  Larger companies should also consider funding external startups that are working on products and services that fit into their portfolio.  Finally, large companies should also have their merger and acquisition department actively looking for promising startups for strategic partnerships, acquisitions, or even buy to kill type strategies.  This strategy allows larger companies to focus on their core business while shifting the risks of failed cloud executions to the startup companies.

If you’re a Licensed ZapThink Architect and you’d like to contribute a guest ZapFlash, please email us at info@zapthink.com

Author Bio:

Mike Kavis is CTO of M-Dot Network, Vice President and Director of Social Technologies for the Center for the Advancement of the Enterprise Architecture Profession (CAEAP ), and a licensed ZapThink architect with over 23 years of IT experience including 12 years in leadership positions. Mike’s areas of expertise are Enterprise Architecture,  IT Strategy & Planning, Organizational Change Management, Cloud Computing, BPM, SOA, and Business Intelligence.  Mike has contributed to version 2 of the Cloud Security Alliance Guide with a group of top notch professionals. Mike received his BS in Computer Science from Rochester Institute of Technology (RIT) and his MBA and MSIT from Colorado Tech. Mike is a free lance technology writer, has published numerous articles for SOAInstitute.org and CIO.com, and is a frequent speaker at technology conferences.

Discussion
93 comments for “Startups, cloud computing, and the freedom to innovate”
FALKIRK GAMES CONSOLE REPAIR FALKIRK - GAMES CONSOLE - REPAIR - FALKIRK Avatar

FALKIRK GAMES CONSOLE REPAIR FALKIRK - GAMES CONSOLE - REPAIR - FALKIRK

[...]Here is a superb Blog You might Obtain Exciting that we Encourage You[...]

Google Avatar

Google

Always a huge fan of linking to bloggers that I love but don’t get a good deal of link love from.

Posted by Google | January 13, 2017
이문희 감독 Avatar

이문희 감독

[...]here are some hyperlinks to sites that we link to due to the fact we believe they're really worth visiting[...]

Posted by 이문희 감독 | January 17, 2017
tiles transfers Avatar

tiles transfers

[...]always a huge fan of linking to bloggers that I love but don’t get a lot of link like from[...]

Posted by tiles transfers | January 17, 2017
Tiles stickers Avatar

Tiles stickers

[...]Here is a superb Weblog You may Come across Fascinating that we Encourage You[...]

Posted by Tiles stickers | January 18, 2017
sky socks Avatar

sky socks

[...]please stop by the web pages we follow, which includes this 1, because it represents our picks in the web[...]

Posted by sky socks | January 20, 2017
dumpster for a day Avatar

dumpster for a day

[...]Sites of interest we've a link to[...]

Posted by dumpster for a day | January 20, 2017
Google Avatar

Google

The information and facts talked about inside the write-up are a number of the best out there.

Posted by Google | January 20, 2017
glass pleasure ball Avatar

glass pleasure ball

[...]one of our guests lately suggested the following website[...]

Posted by glass pleasure ball | January 20, 2017
Best Prostate Massager Avatar

Best Prostate Massager

[...]very few websites that take place to be in depth below, from our point of view are undoubtedly well worth checking out[...]

Posted by Best Prostate Massager | January 20, 2017
Point Base System Avatar

Point Base System

[...]very few websites that occur to become in depth beneath, from our point of view are undoubtedly nicely worth checking out[...]

Posted by Point Base System | January 21, 2017
taxi sölden Avatar

taxi sölden

[...]here are some hyperlinks to sites that we link to since we believe they are really worth visiting[...]

Posted by taxi sölden | January 21, 2017
Cash For Trucks Melbourne Avatar

Cash For Trucks Melbourne

[...]Sites of interest we have a link to[...]

Posted by Cash For Trucks Melbourne | January 21, 2017
used computers Avatar

used computers

[...]usually posts some incredibly interesting stuff like this. If you’re new to this site[...]

Posted by used computers | January 23, 2017
chat Avatar

chat

[...]just beneath, are numerous absolutely not connected websites to ours, however, they are surely worth going over[...]

Posted by chat | January 23, 2017
digital marketing philippines Avatar

digital marketing philippines

[...]below you’ll locate the link to some internet sites that we feel you'll want to visit[...]

Posted by digital marketing philippines | January 23, 2017
first time Avatar

first time

[...]Every after in a whilst we pick out blogs that we study. Listed below would be the most current websites that we choose [...]

Posted by first time | January 24, 2017
We buy houses Wichita, KS Avatar

We buy houses Wichita, KS

[...]The details talked about in the article are several of the ideal out there [...]

Posted by We buy houses Wichita, KS | January 24, 2017
G Spot Sex toy Avatar

G Spot Sex toy

[...]the time to read or visit the subject material or websites we've linked to below the[...]

Posted by G Spot Sex toy | January 25, 2017
Male Enhancement Pills Avatar

Male Enhancement Pills

[...]very handful of internet websites that transpire to be detailed beneath, from our point of view are undoubtedly well really worth checking out[...]

Posted by Male Enhancement Pills | January 25, 2017
meet new friends Avatar

meet new friends

[...]we came across a cool website which you may enjoy. Take a look in the event you want[...]

Posted by meet new friends | January 25, 2017
this is my email address Avatar

this is my email address

[...]check beneath, are some absolutely unrelated internet sites to ours, however, they may be most trustworthy sources that we use[...]

Posted by this is my email address | January 26, 2017
clasificados gratis Avatar

clasificados gratis

Clasificados Online para El Transportista encontrar todo lo relacionado en el área de la transportación. Compra y venta de Camiones usados, tráiler, volteos, utilitarios usados.

Posted by clasificados gratis | January 26, 2017
Car Wrecker Avatar

Car Wrecker

[...]although web-sites we backlink to below are considerably not connected to ours, we really feel they're in fact worth a go by, so have a look[...]

Posted by Car Wrecker | January 27, 2017
롤대리랭 Avatar

롤대리랭

[...]Here are several of the websites we suggest for our visitors[...]

Posted by 롤대리랭 | January 27, 2017
cars parts Avatar

cars parts

[...]we came across a cool web-site that you simply could possibly take pleasure in. Take a look when you want[...]

Posted by cars parts | January 28, 2017
cheap insurance companies Avatar

cheap insurance companies

[...]Here are several of the web pages we advise for our visitors[...]

Posted by cheap insurance companies | January 28, 2017
mti magnolia telecom Avatar

mti magnolia telecom

[...]just beneath, are various entirely not related internet sites to ours, nonetheless, they may be surely worth going over[...]

Posted by mti magnolia telecom | January 29, 2017
Circular Saw for Sale Avatar

Circular Saw for Sale

[...]we came across a cool web-site which you may well love. Take a look should you want[...]

Posted by Circular Saw for Sale | January 29, 2017
car wrecker Avatar

car wrecker

[...]we like to honor quite a few other online internet sites around the net, even though they aren’t linked to us, by linking to them. Below are some webpages worth checking out[...]

Posted by car wrecker | January 31, 2017
favorite sex toys Avatar

favorite sex toys

[...]Here are a few of the web-sites we recommend for our visitors[...]

Posted by favorite sex toys | February 2, 2017
open for business crotchless panty Avatar

open for business crotchless panty

[...]usually posts some incredibly interesting stuff like this. If you’re new to this site[...]

Posted by open for business crotchless panty | February 2, 2017
superior auto institute reviews Avatar

superior auto institute reviews

[...]one of our guests not long ago advised the following website[...]

Posted by superior auto institute reviews | February 2, 2017
anal sex toy Avatar

anal sex toy

[...]although internet websites we backlink to below are considerably not associated to ours, we really feel they may be truly worth a go by way of, so have a look[...]

Posted by anal sex toy | February 3, 2017
adam and eve sex toys Avatar

adam and eve sex toys

[...]Here are several of the web pages we recommend for our visitors[...]

Posted by adam and eve sex toys | February 3, 2017
bondage restraints Avatar

bondage restraints

[...]below you’ll come across the link to some websites that we think you must visit[...]

Posted by bondage restraints | February 3, 2017
bondage cuff Avatar

bondage cuff

[...]please take a look at the web sites we stick to, which includes this one, as it represents our picks from the web[...]

Posted by bondage cuff | February 4, 2017
oki Avatar

oki

[...]we like to honor lots of other world wide web internet sites around the net, even when they aren’t linked to us, by linking to them. Below are some webpages worth checking out[...]

Posted by oki | February 4, 2017
senior dating Avatar

senior dating

[...]that would be the end of this article. Right here you’ll find some websites that we feel you’ll value, just click the hyperlinks over[...]

Posted by senior dating | February 4, 2017
inchiriere apartamente constanta Avatar

inchiriere apartamente constanta

[...]check below, are some entirely unrelated websites to ours, even so, they may be most trustworthy sources that we use[...]

Posted by inchiriere apartamente constanta | February 4, 2017
Broken screen repair Avatar

Broken screen repair

[...]always a large fan of linking to bloggers that I love but do not get quite a bit of link love from[...]

Posted by Broken screen repair | February 4, 2017
bali silver smiths Avatar

bali silver smiths

[...]Wonderful story, reckoned we could combine a couple of unrelated data, nevertheless genuinely really worth taking a look, whoa did a single understand about Mid East has got more problerms too [...]

Posted by bali silver smiths | February 5, 2017
hire a professional grant writer Avatar

hire a professional grant writer

[...]we came across a cool internet site that you just might get pleasure from. Take a look should you want[...]

Posted by hire a professional grant writer | February 5, 2017
auto parts suzuki Avatar

auto parts suzuki

[...]Every once in a when we choose blogs that we read. Listed below are the most current web sites that we opt for [...]

Posted by auto parts suzuki | February 5, 2017
power of solar Avatar

power of solar

Solar Of Hawaii – Buy Solar panels & Complete Solar Systems- Solar Systems Services including #1 rated Solar World & Mitsubishi Electric Solar Power on the Big Island of Hawaii. Professional Solar Installation Available in Hawaii.

Posted by power of solar | February 5, 2017
work at home jobs 2017 Avatar

work at home jobs 2017

[...]very few web sites that occur to become comprehensive beneath, from our point of view are undoubtedly nicely worth checking out[...]

Posted by work at home jobs 2017 | February 5, 2017
Couples Enhancer Ring Avatar

Couples Enhancer Ring

[...]just beneath, are a lot of absolutely not associated web pages to ours, even so, they're surely worth going over[...]

Posted by Couples Enhancer Ring | February 7, 2017
montazni plosiny plzen Avatar

montazni plosiny plzen

[...]the time to read or visit the content or web sites we've linked to beneath the[...]

Posted by montazni plosiny plzen | February 7, 2017
pronajem plosiny plzen Avatar

pronajem plosiny plzen

[...]although internet sites we backlink to beneath are considerably not connected to ours, we really feel they're really really worth a go via, so have a look[...]

Posted by pronajem plosiny plzen | February 7, 2017
Freightliner Columbia Avatar

Freightliner Columbia

[...]below you’ll find the link to some internet sites that we assume you ought to visit[...]

Posted by Freightliner Columbia | February 7, 2017
lovedolls Avatar

lovedolls

[...]the time to read or take a look at the content or internet sites we have linked to beneath the[...]

Posted by lovedolls | February 7, 2017
morkie Avatar

morkie

[...]Sites of interest we've a link to[...]

Posted by morkie | February 8, 2017
anal plug modelleri Avatar

anal plug modelleri

[...]The information talked about inside the article are a few of the most beneficial available [...]

Posted by anal plug modelleri | February 8, 2017
magic wand sex toy Avatar

magic wand sex toy

[...]one of our visitors recently encouraged the following website[...]

Posted by magic wand sex toy | February 8, 2017
CORPORATE ENTERTAINMENT Avatar

CORPORATE ENTERTAINMENT

[...]usually posts some pretty exciting stuff like this. If you are new to this site[...]

Posted by CORPORATE ENTERTAINMENT | February 8, 2017
games for windows 10 Avatar

games for windows 10

[...]Here are a number of the sites we suggest for our visitors[...]

Posted by games for windows 10 | February 8, 2017
apps for windows 10 Avatar

apps for windows 10

[...]check below, are some absolutely unrelated websites to ours, nonetheless, they may be most trustworthy sources that we use[...]

Posted by apps for windows 10 | February 9, 2017
rabbit vibrator review Avatar

rabbit vibrator review

[...]Here is a good Blog You may Obtain Fascinating that we Encourage You[...]

Posted by rabbit vibrator review | February 10, 2017
best male masturbater Avatar

best male masturbater

[...]just beneath, are many absolutely not associated web sites to ours, nonetheless, they are surely worth going over[...]

Posted by best male masturbater | February 11, 2017
tooth extraction Avatar

tooth extraction

[...]we prefer to honor numerous other web web sites on the internet, even if they aren’t linked to us, by linking to them. Underneath are some webpages worth checking out[...]

Posted by tooth extraction | February 11, 2017
find remote support Avatar

find remote support

[...]The info mentioned inside the write-up are several of the ideal offered [...]

Posted by find remote support | February 11, 2017
스포츠닥터스 Avatar

스포츠닥터스

[...]just beneath, are several completely not connected web-sites to ours, nonetheless, they're surely worth going over[...]

Posted by 스포츠닥터스 | February 11, 2017
스포츠닥터스 Avatar

스포츠닥터스

[...]just beneath, are several entirely not associated websites to ours, nonetheless, they're certainly really worth going over[...]

Posted by 스포츠닥터스 | February 11, 2017
coffee from kona Avatar

coffee from kona

[...]below you will uncover the link to some internet sites that we think you need to visit[...]

Posted by coffee from kona | February 12, 2017
pure kona coffee Avatar

pure kona coffee

[...]the time to read or take a look at the content material or web-sites we have linked to below the[...]

Posted by pure kona coffee | February 12, 2017
legitimate work from home jobs with no startup fees Avatar

legitimate work from home jobs with no startup fees

[...]although internet websites we backlink to below are considerably not associated to ours, we really feel they're really worth a go as a result of, so have a look[...]

Evolved Avatar

Evolved

[...]usually posts some really interesting stuff like this. If you’re new to this site[...]

Posted by Evolved | February 14, 2017
Rabbit Sex Toy Avatar

Rabbit Sex Toy

[...]below you’ll locate the link to some internet sites that we feel you must visit[...]

Posted by Rabbit Sex Toy | February 14, 2017
parking stall painting Avatar

parking stall painting

[...]always a major fan of linking to bloggers that I enjoy but do not get a good deal of link enjoy from[...]

Posted by parking stall painting | February 14, 2017
Arizona Parking Avatar

Arizona Parking

[...]Sites of interest we have a link to[...]

Posted by Arizona Parking | February 15, 2017
sex toy haul Avatar

sex toy haul

[...]Here are some of the sites we advise for our visitors[...]

Posted by sex toy haul | February 16, 2017
Fake Pussy Avatar

Fake Pussy

[...]we prefer to honor several other online web pages on the web, even though they aren’t linked to us, by linking to them. Beneath are some webpages really worth checking out[...]

Posted by Fake Pussy | February 16, 2017
best love doll Avatar

best love doll

[...]the time to read or stop by the content or websites we have linked to below the[...]

Posted by best love doll | February 16, 2017
pc games download for windows 7 Avatar

pc games download for windows 7

[...]always a big fan of linking to bloggers that I love but don’t get a whole lot of link adore from[...]

Posted by pc games download for windows 7 | February 17, 2017
full apps download Avatar

full apps download

[...]check below, are some totally unrelated internet sites to ours, however, they are most trustworthy sources that we use[...]

Posted by full apps download | February 17, 2017
free download for windows 10 Avatar

free download for windows 10

[...]check below, are some totally unrelated web-sites to ours, however, they may be most trustworthy sources that we use[...]

Posted by free download for windows 10 | February 17, 2017
free tech forum Avatar

free tech forum

[...]Here are several of the web-sites we advise for our visitors[...]

Posted by free tech forum | February 18, 2017
خرید سرور مجازی Avatar

خرید سرور مجازی

[...]the time to study or go to the subject material or web pages we've linked to beneath the[...]

Posted by خرید سرور مجازی | February 18, 2017
CIO Terbaik Avatar

CIO Terbaik

[...]that is the end of this write-up. Right here you’ll uncover some internet sites that we consider you’ll appreciate, just click the hyperlinks over[...]

Posted by CIO Terbaik | February 19, 2017
beagle Avatar

beagle

[...]one of our visitors recently proposed the following website[...]

Posted by beagle | February 19, 2017
little dogs Avatar

little dogs

[...]please visit the internet sites we adhere to, including this one particular, because it represents our picks from the web[...]

Posted by little dogs | February 19, 2017
interstellar propulsion off Avatar

interstellar propulsion off

[...]always a significant fan of linking to bloggers that I really like but don’t get a lot of link appreciate from[...]

Posted by interstellar propulsion off | February 19, 2017
экзамен на гражданство сша онлайн Avatar

экзамен на гражданство сша онлайн

[...]Sites of interest we have a link to[...]

pc software full download Avatar

pc software full download

[...]we prefer to honor lots of other online web-sites on the web, even if they aren’t linked to us, by linking to them. Below are some webpages really worth checking out[...]

Posted by pc software full download | February 21, 2017
free download for windows 8 Avatar

free download for windows 8

[...]Here are several of the sites we advise for our visitors[...]

Posted by free download for windows 8 | February 21, 2017
pdr training Avatar

pdr training

[...]although web sites we backlink to below are considerably not connected to ours, we feel they're essentially worth a go as a result of, so have a look[...]

Posted by pdr training | February 21, 2017
sex toy review Avatar

sex toy review

[...]one of our guests recently encouraged the following website[...]

Posted by sex toy review | February 21, 2017
rabbit vibrator Avatar

rabbit vibrator

[...]the time to study or stop by the subject material or web pages we have linked to below the[...]

Posted by rabbit vibrator | February 22, 2017
cock ring review Avatar

cock ring review

[...]always a huge fan of linking to bloggers that I like but don’t get a whole lot of link really like from[...]

Posted by cock ring review | February 22, 2017
movies malayalam Avatar

movies malayalam

[...]usually posts some extremely interesting stuff like this. If you are new to this site[...]

Posted by movies malayalam | February 23, 2017
PHP Music website Avatar

PHP Music website

[...]always a huge fan of linking to bloggers that I adore but really don't get lots of link appreciate from[...]

Posted by PHP Music website | February 23, 2017
24/7 service Avatar

24/7 service

[...]usually posts some really exciting stuff like this. If you’re new to this site[...]

Posted by 24/7 service | February 24, 2017
Hallelujah Avatar

Hallelujah

[...]here are some hyperlinks to web pages that we link to for the reason that we feel they're worth visiting[...]

Posted by Hallelujah | February 24, 2017