Right cloud model critical for supporting innovation in startups

COVID pandemic has created an unprecedented level of disruption across the world. The sheer nature of the event has pressed the reset button across enterprises and the startup world is no exception. One striking feature that comes out during the pandemic is the rising pace of digitisation as enterprises try reaching out to their targeted customers through digital interfaces. This has led to accelerated cloud migration among enterprises on various types of the cloud model.

Global Consulting firm Gartner forecasts that the public cloud services market is projected to grow 6.3 per cent to touch $257.9 billion in 2020 as compared to $242.7 billion in 2019 despite a likely fall in global IT spend this year. Not only public cloud, demand for private and hybrid cloud is also projected to grow this year. With no signs of an end to the virtual work environment, demand for cloud-enabled services is likely to persist.

While big businesses with adequate financial and human resources can easily take investment decisions relating to cloud migration, startups face the dilemma of choosing the right fit due to resource constraints. In this perspective, a startup should weigh all the options before zeroing on the right cloud model.

A Sector in which the startup operates holds the key:

Usually, the cloud model depends a lot on the sector in which the startup operates. In this context, the characteristics of different cloud models have to be carefully considered. For instance, the main advantages of deploying a public cloud are its cost benefits. It is relatively cheaper and highly scalable. Public cloud deployment is also relatively easier as compared to private or hybrid cloud. However, the location of data and security & privacy of the data remain key concerns in this model. So, startups using non-sensitive client information can use this model. But startups operating in regulated industries such as financial services, medicine, and law are better up using the private cloud.

Private cloud suits best for storing sensitive information:

The key features of the private cloud are its security features. As data sets behind a firewall, it is hard for hackers to get access to the client-specific private information. The private cloud can also be deployed at scale, suiting the requirement of large startups. However, it is investment-intensive as enterprises require their own IT team to manage and maintain such kind of deployment. Usually, startups handling a lot of sensitive customer data can migrate to the private cloud. Amid rising phishing attacks during the ongoing pandemic, global research firm Technavio forecasts that the private cloud market is expected to touch $70.55 billion, growing at a CAGR over 25 per cent during 2020-24 period.

Hybrid cloud unlocks myriad opportunities:

Among the three types of cloud deployments, the hybrid cloud may be the best fit for many startups. It has combined features of both public and private cloud. While companies can store their non-sensitive data in the public cloud at a cheaper cost, they can store client-specific private information in the private cloud. In this way, it provides the best of both worlds. According to global research firm ‘Markets & Markets’, the hybrid cloud market will grow to $97.6 billion by 2023, at a CAGR of 17 per cent as it provides both agility and security.

Apart from the type of cloud model, startups also have to look at their resource strength- both financial and human- before choosing the cloud model. Meanwhile, many SaaS (Software as a Service) technology firms have started operating in the ecosystem with customised cloud solutions, taking into account the requirements of the business.

In recent years, startups have emerged as the key elements of supporting business growth along with the generation of employment. With innovation-based business models, these new-age companies solve the myriad problems of society. However, for startups to survive and prosper, the right cloud model remains the key. As most of these new enterprises don’t have ample financial resources at their disposal, they should weigh all options before choosing the right cloud model. This becomes more important in the post-COVID world, which is likely to see intense competition in the digital space. In this perspective, digital transformation with the right cloud model can play a vital role in furthering business objectives.