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Is a Startup Crazy if They Don't Use Cloud IaaS?

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Today’s tech entrepreneurs would be out of their minds to build out their own data centers rather than renting capacity from Amazon or another low-cost provider.  --Barb Darrow recounting the statements of Andy Bechtolsheim (former Sun Micro)

Really?  You'd be crazy not to use something like AWS if you're a startup?  We can all admit, the flexibility of many low-cost IaaS providers has significant advantages for new companies without a lot of cash.  But this excerpt from a GigaOM article seems to buy in a little to heavily with the statement from a guy who is running a cloud networking services company.

Just because it's cheap, doesn't mean it's the best way to go.  DZone has used both data center hosting and IaaS for different projects.  The cloud instances were the right choice for quickly spinning up SaaS instances to sell as demand grew.  Whereas, the data center we use for hosting provides the stability we need for our sites and it's located not far away so we know where the data is.

True, the pay-as-you go IaaS model, combined with a cheap open source stack, is a lucretive (and seemingly risk-free) setup for startups.  But it's not going to be the best way for everyone.



Gregory Pierce replied on Mon, 2011/11/14 - 10:03am

While it is true that there are needs that span beyond cloud IaaS, for a startup it is absolutely true that you're nuts if you're concerning yourself with building out infrastructure as opposed to getting your product in front of investors and customers as quickly as possible. Dealing with hardware is a concern you can have once you're more established and stable - until you ARE stable you need to go with a more agile solution.

Craig LaValle replied on Mon, 2011/11/14 - 1:26pm

It is folly to rely on any other company for your core business needs. The way many companies use cloud services create a single point of failure that is potentially catastrophic if things don't go right. That, coupled with limited control in ensuring that something will not fail is a recipe for heartbreak. If you are going to use the cloud for your core business make sure you have redundant systems from at least two different companies. That being said, cloud services are /fantastic/ for proof of concepts, ancillary services, initial roll out and the like. Cloud services were not built for the convenience or advantage of any company but the hosting companies and people would be wise to remember that.

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