Sep 08 2021

Data Management for Startups: How to Choose a Cloud Platform, and When to Go Hybrid

Modern companies usually start in the cloud, but should they stay there forever?

Almost all startups start in the public cloud and prefer to remain there as they grow. But young companies’ needs change over time. As they establish their customer bases and mature, it may make sense to take a multicloud approach or even go hybrid, with a mix of cloud and on-premises data center technology.

Each startup company’s journey is unique. When it comes to IT infrastructure needs, the best compute and storage environment for a company’s business can change as its circumstances evolve. 

“When you are a startup, you have a blank slate and have the ability to plan it out,” says Teague Goddard, a startup strategist at CDW, noting that the ideal approach to infrastructure planning includes “holistically looking at your present day but also your future state.”

What should startups think about when they choose a cloud provider? When should they consider a multicloud or hybrid cloud strategy? How can startups ensure their technology choices set up their companies for long-term success?

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How to Choose the Right Cloud Platform for Your Startup  

When launching their startups, most entrepreneurs go with a cloud-first approach because they can concentrate on innovating and building their businesses. They get the infrastructure and platform services they need without having to make upfront investments or maintain any of the infrastructure.

The three major cloud vendors — Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform (GCP) — offer similar scalability, flexibility and reliability.

“There are only a few major differences where one might outshine the others,” says Leslie Silverman, a public cloud specialist at CDW.  “It comes down to, is there something specific startups are trying to achieve, where one cloud is a better fit than another?”

Do your homework before choosing a cloud provider, Silverman says. For example, AWS provides a strong Desktop as a Service offering, while Azure appeals to startups that want integration with Microsoft 365 and Windows. Meanwhile, GCP is strong with machine learning, artificial intelligence and open-source technologies.

If startups are working on cloud-native applications that use AI, and they know many developers in that space use Google, then Google Cloud is worth considering because the startups can attract developers to write their code, says Roy Illsley, chief analyst of IT ecosystems and operations for tech research firm Omdia.

MORE FROM BIZTECH: Learn how tech can power startups to thrive through three stages of growth.

“It’s a conscious decision where a startup would go based on technology,” Illsley says. “If a startup is using voice-activated technology and thinks Alexa on AWS is better, then it can use that development platform, and Microsoft is obviously a strong pull because Microsoft is used everywhere. The startup can use Azure to hook into Office and other products.”  

When Should Startups Consider Multicloud?

AWS, Azure and GCP want to build long-term relationships with startups. So, to attract their business, the cloud giants offer incentives, such as free credits, education and support, particularly to startups that have raised venture capital funds, Goddard says.

But as companies grow, a multicloud strategy might make sense for several reasons.

The startup may need to develop applications or services in other cloud platforms because its client base demands it, Silverman says. Or, a startup may want to take advantage of a technology or service that another cloud provider excels in, or may want to prevent vendor lock-in or ensure business continuity in case their current cloud provider suffers outages.

“It could be for customer-driven reasons, because a cloud that has a sweet spot where it does something better than others, or just for creating resiliency,” she says.   

A company may also go multicloud because another cloud provider has data centers in regions where the startup wishes to grow, but where its primary cloud vendor is not located, Goddard says.

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Why ShipBob Will Go Multicloud as It Grows

For example, ShipBob, a Chicago-based startup that provides e-commerce fulfillment services for small and medium-sized businesses, is a cloud-first organization that develops and hosts its applications on Microsoft Azure.

ShipBob, founded in 2014, initially went with Azure because it received incentives from the cloud provider in its early days. As the company rapidly expands across the U.S. and Europe, it continues to use Azure because its software developers find the platform easy to use and because the cloud service continually innovates with new features and functionality, says Ray Jimenez, ShipBob’s senior director of IT and cloud operations.

However, in its long-term roadmap, the company does plan to go multicloud to ensure its business operations are resilient.  

“We’ve had discussions that we can’t put all our eggs in one basket, and the fact is, there will be a time when we need to make sure we have full redundancy across multiple platforms,” Jimenez says. “If Azure ever goes down, we want to make sure we can continue to operate.” 

Should Startups Consider a Hybrid Infrastructure?

As a startup matures, it may make economic sense to migrate some workloads out of the cloud and into an on-premises data center or colocation facility. That means investing in IT infrastructure.

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“Early stage companies can afford to be purely 100 percent cloud and operate that way for a long time. But there comes a point where they realize they are a mature operation with a mature customer base and mature products,” Goddard says. “They can’t always look at it from a startup model. They have to look at how enterprises do it and start looking at a more blended approach.”

Venture capital firm Andreessen Horowitz recommends that startup companies think about so-called data repatriation from the beginning.

A recent Andreessen blog post describes the “cloud paradox,” in which the cloud is more cost-effective early on, but later in a startup’s evolution, it becomes more costly: “Make sure your system architects are aware of the potential for repatriation early on, because by the time cloud costs start to catch up or even outpace revenue growth, it’s too late.”

That means architecting workloads with technology, such as Kubernetes to containerize applications, making them more portable and making it easier for companies to migrate workloads to on-premises data centers.

It’s important for startups in all stages of growth to know whether they are using their cloud instances wisely and whether there are ways to do it more efficiently and affordably, Silverman says. In fact, because of how fast startups can grow, she says, smart startup businesses should do a “cloud health check” quarterly.

“It’s about making sure you have a well-designed and thought out strategy,” Silverman says.