Cloud services for startups: a focus on hosting

Cloud services are a key element for the successful growth of a startup. Selecting the right service is often complicated, and an early error can lead toward inefficiencies in the use of money and time. Some guidance in the decision process can derive from the observation of what is happening in the startup world.

In the startup toolkit survey you can find a list of services used by 550 US startups staffers. The list was published in January 2011. Some of the results are: 1) Mail/collaboration: Google Apps, with 57% users, 2) Web analytics: Google Analytics, with 70% users, 3) CRM: Salesforce, with 59% users, 4) Storage: Dropbox, with 39% users, 5) Hosting: Amazon, with 15% users

The list is a good starting point, but we don’t know if there is some bias in the selection of the companies that have been interviewed.  If we focus in hosting services, we can complement the previous analysis with 2 interesting documents related to the hosting decisions at YCombinator and Techstars. These documents are created using an open-source tool called domain-profiler, and are dated January 2011. They show that Amazon and Rackspace are the most used solutions at YCombinator, while at Techstar they prefer Amazon and Media Template, Google is in both cases the preferred mail service, and the preferred registrar is Go Daddy. To understand how Amazon and Rackspace are positioned in theirs markets we can use the Gartner magic quadrant for cloud IaaS and web hosting (Dec 2010). In this document the vendors are classified in 4 types: visionaries, niche players, challengers and leaders. Amazon is classified in the visionaries quadrant, and Rackspace in the leaders one.

The Gartner report is not recent, the market is moving rapidly, options are changing, and in particular for European startups other vendors are available. In Spain some of the most known Internet companies are using other services, like Colt (Idealista), or Telvent (Privalia), as shown from the web service: quarkbase.  And you, which hosting service are you using? Was easy for you to take the final decision?

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