If you’re thinking about starting a cloud-based business, there are a few essential factors you need to pay attention to if you want to succeed.
It seems that organisations of every size want to move their operations into the cloud. From file sharing to business and billing systems, the cloud architecture is in high demand, which is why it’s such an attractive business model.
While the cloud does offer a number of business opportunities, it is fast becoming a competitive space, which means entrepreneurs need to be very strategic in their approach.
There are three main types of cloud computing services:
This model involves offering and managing virtualised infrastructure to other businesses. An IaaS cloud business uses servers, data centers and cloud networking components to offer backup, recovery, hosting and clustering services. Amazon EC2, Google Cloud and Microsoft Azure are examples of IaaS businesses.
A PaaS vendor would offer cloud-based software as well as hardware infrastructure components designed to develop and test application. Basically, clients would enlist the help of a PaaS vendor if they wanted to install and host data, analytics applications or development tools. OpenShift, SAP and Google App Engine are examples of PaaS vendors.
SaaS businesses are a combination of PaaS and IaaS, offering entire software suites on a pay-per-use basis. SaaS vendors allow users to access software applications online. Some examples of SaaS brands include Adobe Creative Cloud, Zoho and Marketo.
While it has become more difficult to enter this market, it is certainly not impossible. Along with the traditional competitors, new cloud businesses need to compete with businesses that started out in the cloud too.
If you want to give your cloud-based business the best chance of succeeding, here are some important aspects to keep in mind:
It’s much easier for a business to start off in the cloud than it is to transition to the cloud, mainly because of how revenue is generated. Most businesses are used to selling products and services upfront for a once-off cost but a cloud-based business works off of a subscription-based model, which means revenue streams in over the course of 36 – 48 months. If you are already a business owner and want to transition to the cloud, start by selling to new customers on a subscription basis first and then start migrating existing customers.
It is possible to speed up time to market by forming partnerships with the right distributors. The more established cloud-based businesses have advanced ecosystems that took years to build up. You may already have the necessary IT expertise; however, you may need to partner with distributors and vendors who can assist you with picking products and bringing them to market. Identify vendors and distributors who can offer you reliable and scalable services if you want to speed up your success.
Before you take your business to market, it’s important that you figure out what differentiates your services. For most businesses starting out in the cloud, their differentiating factors are linked to their expertise or a specific type of technology. Unfortunately, a vanilla offering won’t quite cut it in such a competitive space.
In order to start strong, you need to find the right entry point. Basically, you want to find a need that your services can meet and use that as a way to appeal to new customers. For example, if a customer is currently using an on-premises product, they want to consider moving over to a cloud-based offering as a way to increase security. Again, this is another area where it’s useful to partner with other vendors and distributors who can help you identify entry points using their customer base. While a strong initial offering is always a good start, it’s also important to consider the management of users and services as this will be important to potential customers too.
The cloud isn’t going anywhere and if you want to stay ahead of the pack, ongoing skills development is going to be essential. This also means surrounding yourself with people who have the necessary skills to take your business to the next level. Staff training will need to be done on a regular basis and not staying abreast of updates and changes could make or break your business.
A cloud-based business can be highly-profitable but it does require thorough planning and an ongoing effort to stay relevant, all the while ensuring customers receive exceptional service.