When starting a new business, owners have an abundance of choices regarding startup support programs. Most cloud providers offer attractive packages that can enable rapid growth and ingrain efficiencies. However, businesses can start to face significant issues at the end of the onboarding programs when they find themselves locked in with one provider.
With the launch of a new business, startups will most often choose a single cloud provider and use their platforms to build their entire business instead of developing their own to scale faster. While this can streamline the process upfront, and the technology itself is most often still relevant and valuable for the startup, the costs skyrocket exponentially as these businesses scale.
Another downfall of vendor lock-in is the limits that this can put on startups planning to enter international markets. With privacy and data regulations differing drastically by region, choosing the right mix of cloud providers can facilitate business growth and reduce the hurdles with global expansion. So, while a startup is likely to focus on the domestic market, to begin with, a short-sighted view on technology could mean a business could find it more challenging to enter a lucrative market in the future without a lengthy and expensive restructure.
Avoid skyrocketing costs
For any startup, limiting extraneous costs from the outset is pivotal to ensure strong financials. Startup programs are expressly set up to provide free infrastructure and a solid support base to allow startups to focus on their business offerings. Around the 12-mark, businesses are likely to see the ‘real’ price of their infrastructure as they move to the regular business structures. Costs for these platforms usually include multiple additional unpredictable fees, like ingress/egress data transfer costs or other essential operations.
Startup founders need to understand the price of cloud infrastructure, both looking at the current needs of the business and in line with their future plans. Once a founder has an idea of what they require, signing up for various startup programs with a range of providers will give a business a multi-cloud approach that allows a startup to get the best from each. The flexibility of a multi-cloud approach gives startups the best platform and solutions to support their growth.
Build on the technology, not the platform
Building a business on standardised open-source technology provides interoperability and agility, with cloud solutions built to offer flexibility and freedom. However, too many startups experience feeling locked-in without ultimate control over their solutions when embedded with one provider that doesn’t offer technology standards.
To avoid getting caught, businesses should choose open, portable, interoperable technologies wherever possible. New standards and initiatives have recently emerged to help, such as CISPE and SWIPO Code of Conduct, the European initiative Gaia-X, which provide independent guidelines that businesses can use.
Look to the world stage
In this digital age, opening up to new markets can quickly become a viable option. However, to manage successful launch, startups must consider several factors, including solutions offered by the cloud provider, Private or Public Cloud or bare metal servers; the global footprint, data centres, and the quality of service (including certifications, partnership with industry leaders). All these considerations make up reasons why or why not to move forward with a provider. More often than not, businesses should be looking to multiple providers to ensure flexibility and agility in the market.
Looking at security, the data you store within a cloud provider is subject to the nation’s laws of its headquarters, as well as the nation’s laws of the territories where your data is transferred, processed, and stored. For instance, if your data is hosted and operated within the EU by a US-based cloud provider, the US and EU laws apply to your data, meaning both GDPR and US extraterritorial surveillance programs, as well as the CLOUD Act. The same rules apply to Chinese cloud providers where user’s data is subject to China National Intelligence Law. For a startup, opening in these markets may be a pipe dream; choosing the right cloud solutions and providers at the start of your journey will increase opportunities and protect customers and proprietary solutions. Currently, European providers have a leg up in the market as they comply with GDPR, a world-leading standard around privacy and security, enabling any business to ensure they can both support their solutions and offer the best standards of privacy to their customers.
At its heart, a startup must prioritise agility and flexibility. Relying too heavily on oSne provider, platform or technology service will ultimately cost more in the long run, both financially and in missed opportunities. On the other hand, taking a multi-cloud approach helps businesses develop a resilient technology foundation and enable startups to respond quickly to our current volatile and unpredictable market.