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Are you a startup in search of a cloud server provider? Use this framework to help you think through the key considerations of choosing a cloud server host along with tips for getting started!
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This article is for: software startup founders who require cloud server hosting and want to choose the best option for their startup. Learn about various startup incentive programs that offer free hosting credits.
Now that your startup has a software product idea, how are you going to run the service? Will your startup hire IT experts and create massive server rooms to run your product? Or will your startup simply use cloud server hosting services?
In this article, we will outline what cloud hosting services are available to startups. Additionally, we will explain the differences between the major categories of cloud services.
This article is for startup founders who plan on developing a software product that needs to be run over the internet. This article will help founders learn the requirements of cloud computing, and if it is the right solution for your startup.
Once your startup has a software product idea, you need to begin to think about how the product will be run. Use this resource to learn about the different cloud categories, as well as the evaluation criteria that should be examined during the selection process. Ultimately, the goal is that through learning about cloud server hosting services early there will be less friction while using the service.
Topics to be covered:
- Introduction: Cloud Server Hosting Services
- Learn what a cloud hosting service is and its importance
- Why are Startups Using Cloud Server Hosting Services?
- Identify the reasons why startups are using cloud hosting services
- Types of Clouds
- Learn the differences between the types of clouds available
- Incentive Programs for Startups
- Evaluate the top cloud hosting providers available to startups
- Cloud computing AI systems
- How to Select the Right Service Provider?
- Migrating to the Cloud
- Familiarize yourself with how to migrate data to the cloud
- Are Cloud Services Short or Long Term Options?
- Learn about why some people believe cloud services are only a short-term option
We will illustrate these ideas through case studies of companies and founders who work with the Altitude Accelerator network
- Case study: AWS experience with Steve McBride from Weever Apps
- Case study: Alec Pestov from vGIS
Cloud server hosting: introduction
Key Takeaway: Cloud server hosting services provide startups an alternative to spending large amounts of capital, which they may not have, on traditional on-premises servers. The cloud allows for software, storage, databases, and more to be shared over the internet. The cloud allows startups to keep up to date on all upcoming technology, with the total costs increasing with business growth, all while not having to worry about any upgrades or maintenance.
Historically, everyone in the computer industry worked off their computer’s hard drive when they were developing software. This allowed for local storage and computing on either one or multiple computers all located on a local network. Today, the computer industry commonly uses cloud computing services instead of local hard drives.
Cloud computing is the delivery of computing services such as servers, storage, databases, or software over the internet. This means that instead of spending capital on servers, and IT professionals yourself, your startup pays another company to do so.
The cloud is used to refer to servers that are connected to the internet that can be leased as part of a software or application service. These cloud-based services can include web hosting, data hosting and sharing, and software or application use.
Google’s™ search engine is one example of an end-user product that runs using cloud technology. The search engine is run over hundreds of servers on the cloud to keep up with the number of users on it daily.
Now imagine if Google™ was run on just a couple of servers, there would be large downtime periods due to overloaded servers. Google’s™ users would be angry and would likely change to a new search engine as a result. Since Google™ runs its search engine over hundreds of servers, this prevents any potential down times.
Why are startups using cloud server hosting?
Key Takeaway: Startups are moving towards cloud hosting services in order to save initial capital. Although there is increased reliability and productivity when startups use the cloud, there are also disadvantages. Startups may suffer from vendor reliability issues or may select a vendor that is not fully compliant with all cloud regulations.
Imagine that your software product has been launched and is slowly being introduced to more users. Then one day out of nowhere there is a massive spike in user usage. Your software product is getting popular!
Your on-premises servers crash because you have not scaled to that volume yet and no one can access the product. Once the servers come back online your startup is back to the low user levels it had before the spike. Your product is now viewed by the public as unreliable, and your startup missed out on an opportunity for massive growth.
This is why more and more startups are looking at cloud server hosting services as a way to lower operational costs, as well as allow for faster growth within the company. The “divide and rule” characteristic of the cloud allows the resources required for maintaining a software product to be spread across more than one server which is rendered on a as per need basis. This prevents server shutdowns when there is a massive spike in users.
Below is a list of the advantages and disadvantages of using a cloud service provider to host your startup’s software product.
Advantages of cloud computing
Cloud server hosting services can allow for startups to quickly launch and expand their software product. Startups are choosing cloud hosting services for the following list of advantages:
- Cost – Eliminates the capital expense of buying hardware and software, setting it up, running onsite servers, and having IT experts. Many providers even offer free or low cost services, or credits to startups to help kickstart their business.
- Technology – Startups gain access to high-end technology that they may not have the resource to develop themselves.
- Speed – Most cloud hosting service providers offer self-service and on-demand server changes to allow startups to get resources in minutes.
- Flexibility – Allows startups to pay for more servers as required during times of peak user activity.
- Scale – Allows startups the ability to scale and grow quickly and efficiently.
- Productivity – Increases the productivity of a startup by freeing up resources that would have been spent on completing IT management chores.
- Performance – Cloud services are constantly being updated with new technology allowing your startup to remain up to date. Additionally, if startups use single corporate datacentres there is reduced network latency and greater economics.
- Security – Cloud service providers commonly have security efforts built into their services (for example firewalls, encryption).
- Quick Creation – Startups can quickly build and scale a software product on any platform, and access the resources they need to meet performance, security, and compliance requirements.
- Recovery – Digital files reduce the risk of a startup’s data suffering from environmental damage or theft.
Disadvantages of cloud computing
Startups choose not to use cloud server hosting services for the following reasons:
- Jurisdictional Issues – Startups may need to store their data in certain locations due to regulations surrounding their industry. Additionally, there could be concern regarding other countries trying to gain access to your information if it is stored on a server housed there.
- Vendor Reliability – Smaller cloud service providers could go out of business, or they may not live up to their service requirements. This could result in your startup needing to migrate data to a new provider which costs money. Additionally, the provider could lose your data and it may not be recoverable.
- Compliance Requirements – Some service providers are not fully compliant with the cloud regulatory requirements. This shows that they are not focused fully on customer satisfaction or the security of their cloud.
- Pricing – Cloud service providers can be expensive for some startups using the technology. Pricing has come down in recent years; however, it is still not as popular as it could be due to the price.
Overall, startups must review all the advantages and disadvantages of the technology before moving to the cloud. When reviewing the service providers available, make sure to check user feedback and other resources available to ensure that you are selecting a reputable service provider. Do all the required research early to ensure that your startup is knowledgeable about all aspects of cloud hosting services prior to evaluating the different providers.
Types of cloud server hosting environments
Key Takeaway: There are three main types of clouds available to startups; public, private, and hybrid. Each cloud type varies regarding the level of security they provide, and the amount of customization available. Startups should begin with a public cloud prior to moving into private services in order to save capital.
Though almost everyone uses the cloud, not everyone uses the same type of cloud. There are a number of different ways that the cloud resources can be deployed.
The key difference between each of the cloud deployment methods is the level of privacy your information has when on the cloud. Startups need to evaluate whether or not they wish to house their data with other companies’ data.
Public cloud
The public cloud is owned and operated by a third party cloud service provider. All hardware, software, and supporting infrastructure is owned and managed by the provider. Startups can access and manage their account using a web browser.
On the public cloud, infrastructure and resources are shared by hundreds of thousands of different users. While your actual information is protected, the hardware that it is stored on is shared by many different people and organizations. Gmail™ is an example of a public cloud service.
Using the cloud provides startups with the benefit of only having to pay for the resources that they use. Additionally, since they are using a cloud provider’s infrastructure startups do not need to worry about installing and maintaining it.
A privacy concern of using a public cloud service is that different companie’s data may be housed on the same server, or have been in the past. Always make sure that the server being provided to you has been fully wiped and rebooted so you do not have access to someone else’s data. If your startup decides to migrate to another service provider, ensure that the server used was wiped so your data remains protected.
Additionally, network issues may occur during online traffic peaks which could impact the startup’s business. Through the pay-as-you-go model may be cost-effective initially, large expenses can occur quickly when moving large amounts of data.
Private cloud
The private cloud is a collection of cloud computing resources that are used exclusively by a single business or organization. This private cloud can be located on the company’s on-site data centre. Alternatively, companies can pay a third party to host their private cloud.
When using a private cloud, the services and infrastructure are maintained on a private network. Many medical offices and banking institutions use private cloud systems in order to meet federal and provincial guidelines for data controls.
A benefit of a private cloud model is that it provides greater security compared to the public cloud model, provided that your company spends the resources required to make it secure. This is because only one entity has access to it. It also allows the company to customize their resources to meet specific IT requirements.
A disadvantage of a private cloud is that it can be expensive to install. Additionally, companies are restricted to the infrastructure specified within the contract. Lastly, due to the heightened security it can be difficult to access the cloud in remote locations.
Startups, commonly, do not start with a private cloud due to the high cost of the service. Many begin with a public cloud, and as their product and user count grows, they transition to a public cloud for increased security and reliability.
Hybrid cloud
A hybrid cloud allows data and applications to be shared between public and private clouds. This allows startups to have increased flexibility and more deployment options. In addition, it helps to optimize existing infrastructure, security, and compliance.
Hybrid cloud solutions are usually a more complex cloud solution compared to just a private or public cloud. Organizations need to manage multiple platforms and determine where they want the different types of data stored. Some companies may choose to keep confidential information secured on their private cloud, and have customer-facing content on the public cloud.
A benefit of using a hybrid cloud is that it allows users to take advantage of both private and public clouds. It allows startups the flexibility of using applications across multi-cloud environments. The hybrid model can also be cost-effective since companies can decide to use the more expensive private cloud resources only as needed.
In addition to being more complex due to the multi-cloud nature of the hybrid system, they are also hard to maintain and secure. Integration is also a challenge for hybrid clouds it contains a combination of different clouds, data, and applications. Compatibility issues can arise across the infrastructure during the creation of hybrid clouds which may delay startups.
Cloud server hosting providers and incentive programs for startups
Key Takeaway: There are many different service providers that offer cloud products to their clients. Amazon™, Google™, and Microsoft™ provide some of the most well-known cloud hosting services. Additionally, DigitalOcean provides a cost-effective alternative to using the larger corporate cloud platforms.
Historically, startups had to set aside a large portion of capital in order to set up the required infrastructure. This, however, has changed with the spread of cloud technology.
There are many cloud server hosting providers available to startups, ranging from large corporate companies to startups themselves. Amazon™, Google™, Microsoft™, and DigitalOcean all have specifically designed cloud programmes with free-of-cost services in place to help startups get started on the cloud.
Amazon Web Services (AWS)
Key Takeaway: Amazon Web Services™ (AWS) has a vast cloud-based service offering that covers data storage and development, all the way up to end user computing. Startups have access to credits to help assist them during migration to the cloud. Additionally, AWS has a Startup Kit that provides templates and code to startups to assist during the development process of a software product.
Amazon™ launched Amazon Web Service™ (AWS) in 2006. Currently, the service operates in twenty geographical regions around the world, providing its users options regarding where they want to host their data.
AWS offers a number of different cloud products and platforms in order to meet every business requirement and stage. The following are some examples of different AWS cloud systems available:
- Amazon S3™ is an object storage service for customers of any size or industry. The platform allows users to store and protect a wide range of data types, including: websites, mobile applications, big data analytics, internet of things (IoT) devices, and many more.
- Amazon Lightsail™ is an easy-to-use cloud platform that provides startups with virtual servers, storage, databases, and networks. This platform allows startups to build an application or website easily and quickly using the AWS infrastructure.
- Amazon Virtual Private Cloud™ (Amazon VPC) allows startups to control an isolated section of the AWS cloud. This allows startups to have complete control over their virtual environment, allowing for a completely customizable cloud platform.
A number of companies currently use Amazon’s cloud services in order to host their products. The list includes, but is not limited to; Netflix, Adobe, Airbnb, McDonald’s and Lyft.
Features of AWS
AWS offers its users a wide range of cloud based technologies ranging from topics focused on development, networking and content delivery, end user computing, and more. Due to its vast service offering, startups have the ability to fully customize what their cloud contains based on the services used.
Amazon™ is considered the most supported cloud storage service currently available. This is because it recognizes migration partners that transfer data between different service providers. Additionally, Amazon™ offers solutions for primary storage, backup and restore, archival, and disaster recovery.
Amazon™ offers unmatched security, compliance, and audit capabilities within their cloud platform. AWS has encryption features and provides startups access to management tools, as well as uses Machine Learning (ML) to identify sensitive data stored and detect irregular access requests. This allows AWS to help startups meet industry regulatory requirements, and support numerous auditing capabilities.
Startup services offered through AWS
Amazon™ was the first to offer cloud services to startups. This made it the most preferred cloud platform among free cloud hosting solutions for startups worldwide. Amazon™ offers a free tier for many of their popular services, allowing startups to try out the service or platform before they commit.
AWS is based on a pay-per-use pricing model. This means that startups only have to pay for what they are using. Startups will therefore be able to save some money during Minimum Viable Product (MVP) development, experimentation, and iteration.
AWS Activate also offers a variety of benefits to startups. There are promotional credits that range from $1,000 – $15,000 available to startups. Additionally, startups have access to technical training programs, tutorial libraries, and free business level support.
Lastly, Amazon™ has a startup specific product called the AWS Startup Kit which is a set of resources designed to accelerate a startup’s software product development on AWS available on GitHub. After creating a product using the templates and code included in the AWS Startup Kit, the product can be monitored using processing logs and metrics in order to assess performance. Instructions on how to do all the monitoring and health diagnostics tests can be found within the AWS Startup Kit.
Registered, qualified clients of the Altitude Accelerator have access to free AWS credits through their startup programs
Altitude Accelerator Case Study: AWS experience at Weever Apps
Google Cloud Platform
Key Takeaway: The Google Cloud Platform™ provides cloud-based products and services that are charged to your startup on a pay-per-use structure. The Google Cloud for Startups program provides startups access to mentorship networks, training, and credits that can be used during the development of their software product. The Altitude Accelerator also has access to the Google Cloud Platform™. Startups can apply to it through the Altitude Accelerator.
Google’s Cloud Platform™ was launched in 2008, and allows users to create anything from a simple blog to complex software products using their technology. The Google Cloud Platform™ is available in nineteen regions, with more than one hundred and thirty network edge locations.
The Google Cloud Platform™ has a variety of service offerings, and can be customized to the startup depending upon the industry they are in. Additionally, Google’s™ security is built into their infrastructure and all movement between the servers and the users are encrypted in transit.
There are a number of different companies that use the Google Cloud Platform™ to host their cloud services. The list includes, but is not limited to; Pizza Hut, Spotify, Snapchat, Sony Music, and Evernote.
Features of the Google Cloud Platform
The Google Cloud Platform™ consists of a number of different service offerings ranging from data management, application development, smart business analytics, and AI systems. All systems are run on Google’s™ private fiber network that allows your startup’s product to reach users with the lowest latency possible.
Google™ bills customers based only on the computing time that you use the cloud platform. Starting with a ten minute minimum charge, startups will be charged in minute-level increments based on their use. By only paying for the time you use their cloud platform, startups are able to save capital during development stages.
Lastly, Google™ recently released Anthos their multi-cloud open platform. Anthos allows its users to run unmodified applications anywhere. This includes on-premise servers, and any major public clouds such as AWS, Microsoft Azure, and their own Google Cloud Platform™ using a common user interface.
Anthos is unique as it allows users to manage applications on third-party clouds without requiring the technical staff to learn different environments or APIs. Rather than traditional hybrid clouds, this multi-cloud platform prevents vendor lock-in and requires little configuration to make it work.
Startup services offered through the Google Cloud Platform
The Google Cloud Platform™ allows for startups to quickly get up and running with the use of their mentorship, training, and cloud credits from the Google Cloud for Startups program.
As your startup grows, you can qualify for Start, Spark, and Surge programs in order to further develop your company. Additionally, Startups have access to Google’s Launchpad Accelerator program that provides ML training, equity-free support, and further mentorship from Google engineers and the global Launchpad mentor network.
When using the Google Cloud Platform™ as a startup, you have access to potential funding opportunities from within Google. GV and Capital G are both investment funds from Google’s parent company Alphabet that provide funding opportunities to startups within the program.
Registered, qualified clients of the Altitude Accelerator have access to free Google Cloud credits through their startup programs
Microsoft Azure
Key Takeaway: Microsoft Azure™ offers its customers the most expansive cloud hosting service available. It provides startups with services that their Fortune 500 users receive, and ensures the safety of its user’s data. Microsoft has a free year trial, including $200 credits, available to small companies that allow startups to begin the Microsoft Azure™ journey.
Microsoft™ launched Microsoft Azure™, their cloud server hosting service, in 2010. Microsoft Azure™ currently houses servers in more geographical regions than any other cloud provider. In fifty-four regions, startups have many options when deciding where they want their data hosted from. Azure is also available in Mainland China which opens up the Pacific market.
There are a number of companies that currently use Microsoft Azure™ as their cloud service provider. Walmart, NBC, UPS, FedEx, the NBA, and Toyota all use Microsoft Azure to provide their software products to their users.
Features of Microsoft Azure
Microsoft Azure™ has a number of features available, which increases its value to both startups and mature companies. Azure™ has health monitoring technology, load-balancing, auto-scaling, operating system, and application patching. All of these features work together to allow for automation so startups can focus more on the product being developed, rather than the infrastructure behind it all.
Microsoft Azure™ provides your startup with access to services, infrastructure, and tools to build Artificial Intelligence (AI) powered experiences. Your startup can build bots that naturally interact with users, and use built-in advanced analytical tools to help make faster predictions to improve your service offering.
Microsoft Azure™ is the only consistent and compressive hybrid cloud currently available. This allows startups to reduce the complexity and risk of their software product using this platform. Tools and services provided are designed to work together across a combination of on-premises and cloud environments.
Startups can also control their own data with built-in privacy controls. These controls exist on a platform that adheres to some of the industry’s strictest privacy standards. Microsoft Azure™ uses AI and ML in order to analyze user trends, rather than actual human employees.
Startup services offered through Microsoft Azure
Microsoft™ has some offerings that make it a prime candidate for startups when selecting a cloud service provider. Microsoft offers a free Azure account to small businesses as part of the Microsoft for Startups program that allows for a year of free services and $200 credit to be used within thirty days on any service. This allows startups to begin to develop or host their software product and fully customize it to their requirements. All without having to pay anything!
Microsoft for startups
Microsoft Azure™ is open source friendly, allowing its customers to use open source software tools and technologies on their cloud (for example, debian, redhat, and SUSE). This is beneficial as startups do not need to pay for licensed software tools and technologies while creating their software product.
Startups receive the same level of security and compliance as Fortune 500 and government contracts. This means that your startup is receiving the same level of quality and service no matter the size of your organization.
Lastly, Microsoft Azure™ has an application platform which allows startups to innovate faster. Startups can use the easy-to-use platform to quickly build simple or complex projects all on the cloud.
Altitude Accelerator Case Study: Microsoft Azure experience at vGIS
DigitalOcean
Key Takeaway: DigitalOcean is an alternative cloud hosting provider if your startup does not want to work with the larger companies. They provide competitive pricing for their Linux based cloud platform. DigitalOcean also has a very involved startup program that helps mentor and connect startups during their development phases.
DigitalOcean is a smaller cloud server hosting provider compared to the above mentioned companies, and was launched in 2011. They currently have twelve data centres around the world where you can host your startup’s data.
DigitalOcean is a cloud platform that is designed with developers in mind. As a result, there is a certain level of technical knowledge that its users are expected to have.
Companies pay per a month based on a flat industry-leading pricing structure. This ensures that startups can always budget in advance the cost of the cloud service.
There are a number of different companies that use the Google Cloud Platform to host their cloud services. The list includes, but is not limited to; Content Ignite, Compose, Ghost, and NodeBB Inc. Some undisclosed larger companies are also using DigitalOcean’s cloud platform as a way to off-load day-to-day work due to the easier provisioning process.
Features of DigitalOcean
DigitalOcean’s cloud platform focuses on creating Linux instances and creating products based on this operating system. Additionally, DigitalOcean has a Product Documentation Centre filled with overviews and quickstart guides to help transition companies to their platform.
DigitalOcean’s cloud platform allows for collaboration on the cloud to progress the development of your software product. Two-factor authentication ensures security and controls a startup’s resources and billing.
Startups can create a private network of individual servers in order to fully customize the cloud based on the company’s needs. Additionally, there are built in cloud firewalls to secure the infrastructure used by your startup.
System-level metrics can be monitored at no additional cost, and the resource usage of the cloud can be analyzed. Startups also receive real-time alerts when a metric crosses a specified threshold or critical issues arise on the infrastructure.
Startup services offered through DigitalOcean
Hatch is DigitalOcean’s global startup program that helps to grow startups using easy-to-use infrastructure with a twelve month credit, the amount of which varies depending on the startup. Additionally, expert led webinars and office hours are available to help train startups on DigitalOcean’s cloud platform. Startups also have access to Product Managers, Solutions Engineers, Developer Advocates, and other industry experts to help develop their software products.
Hatch also provides startups with a community that allows founders, investors, and influences to connect online and during in-person Hatch events. In addition, startups in this program receive prioritized support to help them during development and later growth stages.
Overall, there are a number of different cloud service providers available to your startup. Make sure to review all their service offerings and evaluate each of them based on your startup’s needs prior to deciding upon one.
Cloud computing AI systems
Key Takeaway: Cloud computing AI systems combine the accessibility of cloud servers with AI to increase a company’s ability to understand their data. Lots of companies, startup to enterprise, are introducing AI into their developed products to improve their service offerings.
Artificial Intelligence (AI) has the potential to further streamline the immense capabilities of cloud computing. AI programs are able to access the information stored on disparate servers that are part of the cloud. They analyze and learn from historic data to make real-time decisions and learn.
AI programs can then put the newly learnt data back onto the cloud to help other AIs learn as well. This equips the cloud with increased power, and allows for faster learning between different AI programs.
Startup founders cannot oversee all aspects of their business. There is not enough time in the day, and it leads to a decrease in productivity and business growth.
As a result, there is a need to incorporate AI and cloud computing. Lots of companies are introducing information technology platforms that include pre-built combinations of storage, computing, and interconnect resources that can be used to accelerate and automate AI workloads.
Large enterprise software companies are even integrating AI capabilities into their cloud-based software. SalesForce is one example where the company has integrated its AI-enabled business intelligence tool.
Cloud computing AI providers
Key Takeaway: There are many different cloud computing AI providers available to startups. All the major cloud server hosting providers offer AI technology, as well as IBM that has a full AI platform that can be used on multiple clouds.
Cloud hosting service providers are providing more companies access to AI tools that they can incorporate into their products. By offering AI tools within their platform, it allows for a competitive advantage due to the trend towards AI based products.
AWS offers a collection of powerful tools that can be used by developers to add intelligence to applications developed on their cloud platform. The AI platform offered allows startups to add a variety of different capabilities to their product easily and effectively and create a human-like functionality. Some of the offered AI tools are:
- Contact center modernization — can be used to transcribe, translate, and analyze customer interactions to assist call centre agents. This can be used to decrease costs, improve customer service, and gain new customer insights.
- Forecasting — learn how time, product features, and other variables affect each other to generate forecast for product demand, resource needs, and financial performance.
The Google Cloud Platform™ has an AI platform built into its technology. A variety of AI services are offered within this program:
- Training service — allows your startup to train models using customized options based on manually implemented or learned tags on your startup’s data.
- Prediction service — predictions about your data can be made based on a trained model.
Microsoft Azure™ offers AI services within their cloud hosting platform. The platform provides AI models to startups that are currently being used by Office 365, Xbox, and Bing. These AI services include:
- Cognitive services — a collection of domain specific pre-trained AI models for vision, speech, language, and decision that can be customized with your startup’s existing data.
- Bot service — a collection of templates to develop intelligent bots that help you maintain control over your data. These templates include question and answer bots all the way to customized virtual assistants.
IBM Watson is an open, multi-cloud platform that allows startups to use AI technology to build powerful models from scratch, or use pre-built applications. Companies that use this technology include: Macy’s, H&R Block, and Staples. The platform offers a variety of AI services, with the following being an example of some of the offered services:
- Watson assistance — a platform to allow for the creation of an AI assistance for mobile devices, messaging platforms, or robots.
- Knowledge processing — services are available that allow for the analysis of data to identify trends, and gain meaningful insights to make predictions
- Visual recognition — tag and classify visual content to analyze and extract the detailed information found within an image.
Overall, AI and cloud server hosting services are becoming connected due to the improved productivity and efficiency of the companies that utilize them. Startups can utilize these AI services and customizable templates and models to increase their service offerings without having to spend a lot of money.
How to select the right cloud server hosting provider
Key Takeaway: Selecting the correct cloud service provider can be a difficult decision for startups. Founders need to evaluate the service offerings, certifications, and technologies of each provider. Additionally, startups should review their own needs and expectations in order to ensure the provider selected fits with their business vision.
There is a trend across many industries that IT systems are being externalized. By moving these services off-site, it frees up capital and resources that can be allocated to other tasks.
The cloud service provider market is currently very saturated. There are large service providers (for example Microsoft™, Amazon™ and Google™) that are offering a lot of standard services. Smaller niche companies also exist that offer more tailored service offerings
Selection criteria for cloud server hosting providers
Due to the high level of saturation within the industry, startups need to ensure that they select the right one for their long-term success. Below are the key things to consider when selecting a cloud service provider.
Certification and standards
One of the first ways that startups can evaluate a cloud service provider is whether or not the provider adheres to industry best practices and standards. There are many standards and certifications available for cloud, security, and operations features. For example, if security is a priority look for certifications like ISO 27001 or your government’s Cyber Essentials Scheme.
Startups should look for cloud providers that have structured processes, effective data management, good knowledge management, and server status visibility. Startups should also understand how the providers resource and support continuous adherence to these standards.
The more standards and certifications that a provider has the more likely it is that the provider is creditable. Examine available information on their website and reviews to determine if they have the above management tools in place. These certifications and standards together show that the cloud service provider is professional, and there will be likely less service issues with them.
Technologies and service roadmap
Another way to evaluate cloud service providers is to review the technology used and the service roadmap. These two criteria together show how the platform currently works and how it will evolve in the future.
Startups should review the technology used by the service provider. This will allow your startup to make sure that the provider’s preferred platform and technologies align with your environment and cloud objectives.
Startups need to identify how much re-coding and customization would be required to make your workload suitable for the cloud provider’s existing platform. Additionally, understand the support offered regarding migration to their platform, and fully understand who is responsible for what elements of the migration. Will they have technical staff available to help, or could you use a third party that is recommended by the service provider?
Additionally, startups should review the provider’s service roadmap. This will identify how the provider is planning on continuously innovating and growing. As well as identify if the changing offerings of the company will continue to fit into your startup’s needs long term.
The roadmap can also be used to identify the provider’s commitments to specific technologies and vendors. Overall, startups should evaluate the existing portfolio of services and technologies and the provider’s planned future changes during the selection process.
Data security, data governance, and business policies
Startups need to review the data management and information security policies of a cloud service provider during the evaluation stage. The data being stored on the provider’s cloud is important, so make sure that they take it seriously as well.
Startups need to be aware of the regulatory or data privacy rules governing personal data. Cloud servers can be located in different geographical locations around the world. As a result, startups need to be aware of the local laws that your data might be subjected to.
The geographical location of the data could be a key selection criteria based on your startup’s specific requirements. As a result, choosing a provider that gives you choice and control regarding what jurisdiction the data would be stored in is important. Providers should be transparent with this information so make sure your startup gets it.
Data security is becoming increasingly important in today’s technology age. As a result, one of the key things to be evaluated during the cloud service provider selection process is information security.
Check the provider’s data loss and breach notification processes to ensure that they are aligned with your startup’s risk, legal, and regulatory obligations. If they are not following a security policy that is reflective of your own, they are not the provider for you.
Ensure that the service providers have security measures in place, and that it is a risk-based program that clearly supports your own security policies and processes. Get clarity on all security roles and responsibilities.
Make sure that user access and activity is auditible. Additionally, ask for internal security audit reports, incidents reports, and evidence of remedial actions to check their security policy. If the provider is certified at a certain security, ensure the certifications are valid.
Service dependencies and partnerships
Startups should also review the vendor and subcontract relationships that the cloud service provider has. This evaluation is important to determine how much of the service is the provider’s responsibility.
Startups should assess vendor relationships based on their accreditation level, technology capabilities, and staff certifications. This can be done to determine if the services offered fit into a larger ecosystem of other systems.
When selecting a cloud service provider, startups should also review any subcontractors and service departments that work with the provider. Ensure that the provider discloses all relationships and guarantees the services offered. If the subcontracted services are business critical, be hesitant about the provider since they are not actually in charge of the service provided.
Contracts, commercials, and SLAs
When selecting a cloud service provider make sure to review all contracts and Service Level Agreements (SLAs) in detail prior to signing. Below are some key things to keep in mind while reviewing any contracts or agreements.
Startups should always challenge providers that are prepared to offer flexible terms. Make sure your startup gets more information on how the provider will support the variation. This will ensure that your startup is not forgotten, and the required services are provided.
Make sure there is a clear definition of the services and deliverables in the contract. This includes clarifying the roles and responsibilities of both your startup and the service provider. Check how service accessibility and availability is managed and assured.
Your startup may include intellectual property (IP) that you do not want available or stolen by the provider. Ensure there are specific terms regarding IP within your contact. This will ensure that any IP that is on the cloud is your startup’s, and that the provider cannot take it for their own.
Reliability and performance
The reliability and performance of a cloud service provider is one of the more important aspects of their service you should evaluate. Startups should check their performance against SLAs over the past six months to a year. This information is sometime published or can be provided to your startup if asked.
There is downtime expected with every service provider, there is no perfect cloud service available. What is important, however, is how the provider dealt with the downtime. Startups should identify if there are monitoring and reporting tools in place to ensure any server issues are corrected promptly.
Startups should ask cloud service providers if there is an established, documented, and proven process for dealing with both planned and unplanned downtime. Providers should be able to tell you how they will communicate with customers regarding timelines, prioritization of customers, and severity level assessments.
All of these plans work together to show how much communication startups can expect regarding periods of downtime. This will ensure your startup can communicate to its users during such situations effectively to minimize frustration.
Startups should also evaluate the cloud service provider’s disaster recovery provision and process. This process should include criticalness of data, data sources, scheduling, backup, restore, as well as integrity checks. Make sure that there are clear roles and responsibilities so in case of natural disaster your startup will have some peace of mind during the process.
Startups should also consider purchasing additional risk insurance if all costs associated with data recovery are not covered by the provider. Additionally, review the liability limitations so your startup is aware of what the cloud service provider is liable for.
Migration support, vendor lock-in, and exit planning
Prior to signing a contract with a service provider, make sure to review how easy it is for your startup to leave their cloud service. Make sure there is a clear exit strategy in place to ensure that you do not get locked into a contract.
Vendor lock-in is when startups are unable to easily transition to a competitor. This is commonly a result of proprietary technology that is incompatible with competitors, inefficient processes, or contract constraints.
Startups can minimize risk by ensuring that there is minimal use of proprietary technology by the provider. Additionally, startups can minimize the use of services that limit the ability to migrate away from one provider.
Startups should also be wary of enhancement creep, where providers continue to add features to the contact to prevent your startup from leaving. Always ensure that any provider is competitive. Additionally, make sure that your startup has a comparable alternative provider in place just in case.
Business health and company profile
Startups need to evaluate more than just the services being offered by a cloud provider, but also the company itself. As a result, the financial health and profile of a company should be used to evaluate a shortlist of service providers.
Cloud service providers should have a track record of stability and have enough capital to operate long term. Startups should ask about planned corporate changes, mergers and acquisitions, or business aspirations. These questions together will help your startup determine if the provider will be around in the capacity expected in the long run.
Startups should also determine if there have been any past legal issues with the company and how they responded to them. Additionally, review analyst profiles, online reviews, and market research to determine their market status. This will help your startup determine if the provider’s clients like their services.
Lastly, review the types of customers that the provider has and what markets they view as important. This will help your startup evaluate whether or not your company will be a priority to them.
Migrating to a cloud server hosting provider
Key Takeaway: Migrating your startup’s data to the cloud requires initial planning to determine the order in which information is moved. Instead of using your own technical resources, a third party can be hired to migrate the data for your startup. Ensure that the company hired to migrate the data is well versed in the cloud platform that you have selected.
Migrating your startup’s application and services to the cloud requires more than just picking a service provider. Startups need to also think about how they are going to be uploading all their data to the cloud.
Cloud migration requires careful planning to ensure the process goes smoothly. Startups need to identify the baseline of their existing servers in order to compare the same application’s performance and availability after migration. Additionally, startups need to prioritize the order that data is being migrated in to ensure information is transferred in a logical manner.
To smooth the transition onto the cloud, startups should consider working with a third party to quickly and efficiently migrate all required data onto the cloud. These cloud migration services help startups navigate the costs and technical challenges that can occur during the move from on-premises to cloud environments.
Selection criteria for cloud migration service providers
When selecting a cloud migration service provider make sure to assess each option based upon the following criteria to ensure that they provide the services required by your startup:
- Select a provider that has specific knowledge of the cloud platform that you are trying to move to or from.
- Ask for case studies on past migration clients to see how to process went for the other company.
- Ensure the migration provider is knowledgeable about security standards and guidelines in order to accurately set up user permissions and identity management.
- Determine whether or not the provider offers training on the new system. This will allow your team to learn how to use the cloud system as well as better understand any required maintenance, if any.
Cloud migration service providers available
There are a number of different cloud migration service providers available to startups. The following are some key providers that are suitable for startups based on their level of experience:
- Rackspace – This provider has experience with customers of all sizes, and specializes in migrating workloads to AWS, Microsoft™ and Google™. Specifically, it is an AWS Premier Consulting Partner with the Migration competency certificate highlighting its capabilities. Cloud engineers assess existing workloads, security, and server configurations to design an appropriate migration strategy customized to your startup.
- RiverMeadow – This provider manages migration services that support AWS and Microsoft Azure™. The company recently added Microsoft Azure™ as its target cloud showing increased specification. It also has a Software as a Service (SaaS) migration platform that allows for automated migration of workloads without any pre-processing.
- Accenture – This provider completes that majority of its migrations using automated tools. These tools analyze data to predict costs and create step-by-step instructions in order to successfully migrate workloads. Accenture supports AWS, Microsoft Azure™, and Google™.
Following migration to the cloud, monitor the services that are being used to power your startup’s applications to optimize your use of cloud infrastructure. Additionally, your startup will need to monitor the cloud service to make sure there are no usage issues or errors that might occur when using the new application.
Once your startup has migrated to one cloud platform it can be difficult to move to another. This is because every provider’s stack is different and may contain proprietary technologies. As a result, make sure your startup selects a service provider based on both the current and future needs of the startup.
Cloud server hosting providers: a short term, or long term option?
Key Takeaway: Switching to a cloud service provider may only be a short-term option for some startups. Startups may decide that in the long run having full control over their servers is beneficial to their business. This is compared to using pay-as-you-go services that could end up costing mature companies more once they reach a certain scale.
The cloud and startups are a natural fit as the cloud allows startups to get to market faster with lower up-front costs and greater flexibility. This allows startups to compete with established companies and other startups quicker.
Once startups begin to make revenue and grow, a cloud hosting service may not be the right long-term move. The following are some key reasons why mature companies may not utilize cloud server hosting service providers in the long-run:
Availability and reliability
Mature companies that use a cloud server depend on the vendor to keep the network up and running, however, outages do happen. Commonly, in this situation vendors protect themselves rather than their customers.
To protect themselves, mature companies need to hire strong lawyers to negotiate their SLAs to detail who is responsible for what during an outage. This would increase the initial expenses of a cloud server.
More expensive in the long run
Cloud services are initially inexpensive because of their pay-per-use models. Since startups are usually small, they do not commonly end up spending much money.
Depending on how computer-intensive and large the startup later becomes, the cost of a public cloud would increase. Depending on the usage, this could mean that a public cloud service could become more expensive than on-premises approaches in some situations.
View on the cloud may change
As startups grow into mature companies, their views on cloud services may change with them. Mature companies may have enough money to bring IT systems on-site.
Mature companies may want to put some special features in place that are not offered by cloud vendors. Additionally, firms may want to have more control over service availability. As a result, moving away from a cloud vendor will allow mature companies to drive their business more efficiently.
Many large companies, Netflix for example, still continue to use cloud hosting service providers. This is because creating an on-site server and migrating all the company’s stored data onto it is very expensive. Many only choose to go this route if they want to have complete control over all aspects of their products.
Do not worry, your startup does not need to consider switching to an on-site server until very far in the future. Your startup may never consider this as an option.
Overall, many startups need low upfront costs of the cloud server in order to begin their business. Long-term costs and other benefits may be nullified by the growing business. As a result, mature companies may need to move to on-premises servers in order to continue advancing.
Conclusion: cloud server hosting providers
Using a cloud server hosting service allows startups to invest capital in other areas of development rather than creating and housing the infrastructure themselves. There are many different types of cloud services available from companies that are enterprise and startups themselves.
Service providers need to be evaluated based upon both their offerings to the user, as well as the startup’s current and future requirements. Startups should spend time thoroughly researching each provider. This ensures that the provider selected is appropriate for their needs and startups do not need to migrate their data late on to another provider.
Ultimately, cloud hosting services allow startups to focus more on the development of their software product, rather than the infrastructure behind it. The more time and resources startups have available, the more they can put into the development of their software product.
Lessons learned
Congratulations! You have now learned about cloud hosting services and how startups can use them as an alternative to traditional on-premises IT infrastructure. After reading this article you should have learned the following key learnings:
- There are three main types of clouds: a public, private, and hybrid cloud, which vary depending on who has access to the same infrastructure that your startup would be using.
- There are many different cloud service providers available that should be evaluated based upon their service offerings, as well as your startup’s needs and requirements presently and in the future.
- Many cloud hosting providers also offer AI capabilities to startups. These services can be used to create customized AI offerings, or allow for the use of pre-developed models and templates.
- Migration of your startup’s data onto the cloud requires careful planning, and you can hire a third party to do it for you to save time.
- A cloud based system may not be the best solution for startups in the long run due to increasing costs and a lack of control over all aspects of the infrastructure.
