Business Opportunities in Cloud Computing

Identifying the major types of new business opportunities in cloud computing.

Chip Hazard, a partner at Flybridge Capital in Boston (VC firm), has a blog which focuses on IT. His first post is about opportunities in cloud computing. Hazard identifies four major types of new business opportunities from cloud computing:

Enable enterprise data centers to be more cloud like (enterprise IT will operate using a cloud computing model)
Bridge the cloud and enterprise boundary (enterprise computing will use cloud computing to handle peak loads)
Provide tools to better manage cloud environments (self-explanatory)
Develop SaaS applications for vertical markets (Hazard believes that horizontal SaaS (CRM, ERP, etc.) is closed but industry specific applications are wide open

Hazard's last point is perhaps the most important for entrepreneurs--create companies enabled by the cloud.

"One of the aspects of cloud computing that excites us the most is that it is a huge enabler of innovation. Cloud computing makes it so easy to develop and deploy applications that it levels the playing field for start-ups versus large, well capitalized, competitors. As an entrepreneur, I can now buy access to world-class data center infrastructure for dollars an hour that would have previously cost me millions to purchase and deploy. As a result, savvy start-up executives can look to create companies that would have previously been too capital intensive to contemplate."

Think about the perfect business model from a financial/economic perspective. It would have three characteristics:

Low initial capital requirement
Low fixed costs
Marginal cost to scale the business

Cloud computing allows the entrepreneur to meet all three requirements. As additional technology is added to cloud computing (e.g. Oracle, Calais, etc.) it will only get easier and more attractive to start new businesses.

Business Opportunities in Cloud Computing

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