By Minda Zetlin
In 2005, when Reggie Bradford was president of startup N2Broadband, which provided equipment for live-streaming video content, the company’s TV network customers often found themselves planning for spikes in demand that might or might not happen. Streaming a new show or sporting event could draw many millions of viewers—or maybe it wouldn’t. They had to be ready, just in case.
Back then, that meant servers—lots and lots of servers. “We’d have to build and have our customers build to peak capacity, even though that was a theoretical number that would only be hit if a lot of usage happened at the same time,” Bradford recalls.
When Bradford launched Vitrue, a social marketing and management company, in 2006, the company chose to use the cloud for its infrastructure instead. “Even back then, there were inherent benefits,” he says. “We could focus on our core competency: building our own applications to help customers manage their assets and content on social platforms.”
Even better, Vitrue and its clients no longer struggled to predict how much capacity they’d need in case of a hit. “We could scale up and scale down,” he says. “It allowed us to operate as a startup with the scale and capacity to work with very large customers. It meant we could punch above our weight.” In 2012, Oracle acquired Vitrue, and Bradford became senior vice president in the Startup Ecosystem and Accelerator group.
That ability to scale up and scale down at will is perhaps the biggest benefit of working with a cloud provider. It delivers major advantages for companies large, small, and in between. Here’s a look at how, whatever your company’s size, using the cloud to increase or decrease capacity as needed can make a big difference.
Small Companies Get Access
Beyond the ability to handle usage spikes, the scalable cloud brings many advantages for small companies. As Bradford notes, it gives them access to technology they could never buy or build on their own, as well as highly skilled technology professionals they could never afford to hire. “All the major developments and enhancements and all the best talent in engineering in the world is focused on the public cloud,” he says.
Working with a well-established cloud provider also confers legitimacy and can reassure a large enterprise customer that a smaller entity’s technology is stable. Startups that apply to the Oracle Startup Cloud Accelerator Program often do so for this reason, Bradford says. Companies that can’t or don’t want to apply to the program can still use Oracle Cloud and get those same benefits. “The cloud really democratizes Oracle and opens us up to an entirely new customer base. We were focused on providing services to the largest companies in the world, but now we have the capability to go to these smaller businesses and provide an infrastructure and level of support at a price that’s competitive in the marketplace.”
Another advantage of the scalable cloud is that it allows small companies to vastly expand their customer base while remaining small. That’s how it worked for DNA Behavior International, a 45-person company that uses behavioral profiling to help financial firms better understand their customers.
The cloud gives you the opportunity to take risks without having to build out all the fixed costs ahead of time.”– Kevin Baril, National Managing Principal of Innovation, Grant Thornton
When DNA Behavior launched in 2001, “we trained a lot of financial advisors in large corporations, but it was a very manual process,” says founder and CEO Hugh Massie. In 2012, the company took advantage of growing cloud availability to pivot to a SaaS model. Now the company uses its API to integrate its software with that of financial services firms so that they can directly access behavioral insights about their clients.
Midsize Companies Get their Due
At midsize law firm Culhane Meadows, the firm’s attorneys all work in their own offices or remotely in cities across the country. "We are cloud-based because it just made sense," says Heather Haughian, managing partner at the firm. “We could have paid for the infrastructure to set up our own servers and have everyone VPN into that server environment,” she says. “But that wasn’t practical because cloud computing helps us react faster to our company’s needs and provides greater operational efficiency.”
The virtual firm has grown rapidly, from 5 partners to almost 60. Working in the cloud has allowed Culhane Meadows to quickly scale its computing power to keep up with its growing head count. And working with large, well-established cloud vendors brings definite advantages when prospective customers do their due diligence.
“We have Fortune 50 and Fortune 100 clients who are now asking more in-depth questions about our IT infrastructure and security protocols,” Haughian says. “They say, ‘We need to know if you have security procedures in place for A, B, and C.’ We can say, ‘Yes.’ They ask, ‘Do you have the required security audit reports?’ And we can say, ‘Yes.’ If we were trying to manage our IT infrastructure ourselves, we would have struggled responding to these questions. In addition, for midsize and larger companies that want to increase their overseas presence, the scalable cloud offers a huge advantage, allowing companies to expand into new regions without sending a single employee there. “You can spin up servers in different geographies,” says Marty Puranik, founder of hosting solutions company Atlantic.net.
This ability to host in multiple geographies can also be a huge benefit for latency reasons, Puranik notes. “For most companies, the hardest part is getting people to the site, getting items into shopping carts, and getting people to check out. You don’t want to lose customers because of your site.”
The scalable cloud can also make life much easier for midsize companies that yearn to become larger through a merger or acquisition. “If we decided to merge with a 20-attorney firm, we’d grow tremendously in one fell swoop,” Haughian says. “But we wouldn’t have to ask what kind of servers do we need to buy or how do we integrate their back-end systems with ours, because any firm we acquired would simply adopt our existing cloud-based systems and quickly have access to all our IT systems.”
Large Enterprises Get Nimble
The scalable cloud may make it much easier for small, midsize, and startup companies to compete with larger ones. But it can also help large enterprises defend themselves against these smaller and more nimble competitors. With nearly every industry being reshaped by disruptive startups, learning to move quickly in response to market forces is now a mandatory survival skill for older, larger corporations.
With the cloud, you can scale up, do it all in a day, and scale back down. You get the answer a lot faster.”– Marty Puranik, Founder, Atlantic.net
Moving fast tends to be a challenge for large enterprises, especially if deploying a new system means going through a lengthy procurement process before spending the funds. Using the scalable cloud can allow project owners to bypass that process.
“The cloud gives you the opportunity to take risks without having to build out all the fixed costs ahead of time—with the comfort of knowing that if it works, your cloud provider will be able to scale with you,” says Kevin Baril, national managing principal of innovation for the accounting and consulting firm Grant Thornton.
The scalable cloud provides particular benefits when it comes to R&D, Puranik says. For example, a pharmaceutical company testing a new drug might need hundreds of thousands of processors, but only for 12 hours. Because it’s not practical, in a traditional data center, to bring that many servers online for such a short time, researchers will use a smaller number of servers over several months instead. “With the cloud, you can scale up, do it all in a day, and scale back down,” says Puranik. “You get the answer a lot faster.”
The cloud allows project owners within the business to deploy the systems they want with little or no involvement from IT. This can help business departments move at the speed they need to. “In the medical field, you might have a group that gets a grant to do research and it’s going to take too long going through traditional IT,” Puranik says. “So instead, they can use the cloud to start up a prototype and that allows them to meet the benchmarks to achieve the next part of the grant.”
Of course, many IT leaders would call this shadow IT—something to be reduced or eliminated if possible. “We’ve all seen the proliferation of buying centers within organizations,” Baril says. “It can be challenging to keep coherency and maintain a consistent strategy.”
But for those who can meet that challenge, he says, using the scalable cloud to take pressure off overworked IT departments can help the entire enterprise.
Illustration by Wes Rowell
Minda Zetlin is coauthor, with Bill Pfleging, of The Geek Gap: Why Business and Technology Professionals Don’t Understand Each Other and Why They Need Each Other to Survive (Prometheus Books, 2006).