cloud computing and startups
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What does cloud computing mean for startups and small businesses?TRANSCRIPT
What’s the big deal about
cloud computing?
Vishy Venugopalan · Longworth Venture Partners · @midtownninja
© Dan Reynolds
About me
Analyst at Longworth Venture Partners
Prior LivesPrior Lives
• Infrastructure software analyst at The 451 Group
• Software engineer, Morgan Stanley
Everything old is new again…
… or is it?
Cloud computing buzz
Job postings mentioning “EC2”4500%4500%4500%4500% in 18 months
Amazon.com vs AWS network bandwidth over time
So what is cloud computing?
And why the buzz?
Photo creditPhoto creditPhoto creditPhoto credit: Gerard Casey, Rob Graham, Paul Loebig
Source: UC Davis networking documentation from 1998
Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable
computing resources (e.g., networks, servers, storage, applications, and services) that can be
rapidly provisioned and releasedrapidly provisioned and released with
minimal management effort or service provider
interaction.
-- NIST Cloud Computing Project
A (very) brief taxonomy
• Software as a Service
– $21bn by 2012 (20% CAGR)
• Platform as a Service
– $9bn by 2012 (160% CAGR)– $9bn by 2012 (160% CAGR)
• Infrastructure as a Service
– $4bn by 2012 (60% CAGR)
SourcesSourcesSourcesSources: AMR, Gartner, IDC, William Blair & Co.
But is the market real?© teri-hatcher.com
Strong on-ramp for existing applications
The market is real and spectacular
New kinds of applications
60
70
Projected cloud computingspend
SourceSourceSourceSource: IBM, Enterprise Cloud Summit 2009
0
10
20
30
40
50
2008 2009 2010 2011 2012
$$ $$bnbn bnbn
spend
Smaller Enterprises Larger Enterprises Cloud = IT’s Cambrian Explosion--Irving Wladawsky Berger
Credit: Credit: Credit: Credit: UC Paleontology Museum + Nat’l Center for Science Education
This is how startups see the cloud
© DisneyCopyright holder unknown
This is how large enterprises see the cloud
© Disney
Killer apps for the cloud (so far…)
• Web applications
• Batch jobs
– Scientific computing
– Rich media processing– Rich media processing
• Test+dev and one-off projects
• Getting out of the business of IT
Credit: Geek and Poke
So why should startupsSo why should startupsbe excited?
Cloud as new business enabler
• Low user friction
• Internet standard abstractions
• Easy client access
• Potential cost savings (?)• Potential cost savings (?)
What’s so cool this time?
Economies of scale
+ Low user friction+ Low user friction
+ Ease of integration
Opening up the SMB IT opportunity?
What’s so cool this time?
Openness & network effects
Giant market opportunity
No single winner
Summary
• Cloud computing is a tectonic shift and it’s real
• There are many issues yet to be worked out
• The cloud enables new apps and new business modelsmodels
• The cloud’s inherent openness encourages innovation
• The cloud’s unique characteristics might open up the SMB market
Resources
• NIST Cloud Computing Project
• McKinsey and Berkeley reports on cloud computing
• Intuit Partner Platform
• Everyone who’s here!• Everyone who’s here!