Why is the cloud important for a new business? This is an amazingly broad question that needs to be unpacked quite a bit before any analysis can take place. And of course, opinions are woven throughout, and you know what they say about opinions….

First, what do I mean by “the cloud”? Wikipedia is pretty clear: “Internet-based computing that provides shared processing resources and data to computers and other devices on demand.” The Internet-base lead-in is a critical distinction here; it is possible to create a “private cloud” for a single business with many of the same capabilities and benefits as the “public cloud,” just on a smaller scale. I’ll be speaking specifically to the public cloud here. “Shared processing (and storage + network) resources… on demand.” The fact that these critical IT resources are available on demand is a game changer; it is nearly equivalent to electricity or water (when in metropolitan areas) where it is reliable delivered by some other party with a service level and predictable costs.

Second, what do we mean by a “new business?” Interestingly, the scope here is broader than what is initially implied… Cloud is a game changer, not just for technology companies, but for all companies; technology is a necessary component for any company's success. New businesses can (and must) leverage the cloud because it provides a faster path to adopting technology than building an entire IT stack themselves. No company starting today would think about building a power plant to provide electricity, they would put their headquarters in a location where electricity is reliably provided by someone else at a good price with sufficient supply.

Businesses that successfully leverage technology will grow larger, faster, and become more profitable. In particular, software is the major aspect of technology that provides both the minimum and the differentiated IT capabilities the business need to be successful. A full technology stack is required, software needs to run on hardware, but there is no longer a need to build the entire stack yourself. Outsourcing the infrastructure (compute, storage, network) and platform (operating system, container management, etc.) is the fastest way to leverage software in your business processes. In most cases it is also the cheapest for a new business; large capital outlays are no longer required.

Cloud service providers are now far more reliable than any IT department with a budget smaller than $100M a year. They are also far more efficient due to benefits of scale and location; which results in low prices thanks to heavy competition. It makes sound financial sense to leverage cloud computing for all new technology projects, unless using internal resources is better for some reason (legal, available capacity). A new business has no available capacity, it has no IT technical debt, and it has no processes based on infrastructure management. This presents an opportunity to take a different path from companies that started as recently as 10 years ago.

It is obvious that starting a new company whose product is software will benefit significantly from using the cloud. But what about a company whose product is a great dining experience, or one whose product is connecting other companies with qualified job candidates? Software either exists or can be created to streamline and automate core business processes and/or necessary enablers. This is not just email (from Office365 or Gmail for business) and websites (from Godaddy or Quicken), those are table stakes.

Restaurants need customers, who first need to be aware, second need to determine interest, third need to determine how to connect, then to actually connect, consume the product, pay, refer others, and finally, to return. Restaurants need to ensure that their operation has the right facilities, staffing, stock, and procedures to deliver the dining experience. Public websites can help with awareness, promotions, and connecting with customers, but generally don’t help with internal business processes. Numerous, off the shelf, software packages can help with staffing (7Shift), stock management(Syrus), and point of sale transactions (TouchBistro). The cloud is the best place to run these applications, because maintaining hardware and operating systems is not and should not be a point of investment for a restaurant.

The real game changer comes when these different business processes are integrated to improve the customer and employee experience; creating a more engaging, effective, and efficient business. We will explore that in a future post…

About the Author:

Greg Bertoni serves as a trusted consultant and advisor in support of Business Operations, company strategy and direction, and management. Since his arrival at Cloud Construct, Greg has led the team through new development cycles, product offering expansion, project life-cycle planning and execution.

Prior to joining Cloud Construct, he received his Bachelor of Science in Management Information Systems at Northeastern University.