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8 cloud computing mistakes startups and SMEs make that affects their scalability

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pavel.trukhachev
November 18, 2020
8 cloud computing mistakes startups and SMEs make that affects their scalability

Whilst the cloud continues to act as a pivotal component in the operation of more than 90% of the businesses in 2020, the pill is bitter to swallow for tech-centric startups and SMEs. According to research, 90% of startups fail(75% being venture-backed up), and only 40% of startups generate profit. Many startups in this decade are born in the cloud. This is mainly because they need to save as much money as possible thus opting to use cloud IT infrastructure services as opposed to on-premise IT resources. Not only is it cost-effective, but also provides them with flexibility, flexibility, and scalability.

But, most startups and SMEs make mistakes when adopting cloud computing into their operation. Most of them don’t even know they are making them. Back in 2018, the tech giant Adobe lost $80,000 in cloud costs in Azure due to a mistake by the development team. Pinterest also faced the same predicament after their spending in AWS exceeded their projected budget by $20 million. This happened because of unpredicted traffic spikes.

Those are just but a tip of the iceberg of how a slight trip in your cloud computing strategy may end up costing you, in terms of finances and scalability. Those are well-established companies yet they can lose so much from cloud computing mistakes. What are the chances that your startup will make the same mistakes? Very high.

To help you achieve your end goals in your startups and business, here are common mistakes startups make, and some solution ideas.

Lack of a Concrete Cloud Strategy

Having a well-established cloud strategy is the key to success when perforating the cloud. Many startups get caught entangled in the web of the excitement of deploying their applications or solutions, that they forget to evaluate the role the cloud will play in their startup. According to Gartner, a cloud strategy is a central role that the cloud plays in an organization. Many startups fail to involve other departments such as business, and they end up making the wrong decisions. They may therefore adopt the cloud, without even knowing the role it will play in the organization. This may reduce the benefits they get from adopting the cloud.

Solution Ideas and Tips

  • Always try to involve all the departments in your firm when coming up with cloud strategies.
  • Don’t forget to have an exit plan in your strategy, sometimes things never work as expected.
  • It’s never too late to come up with a cloud strategy.
  • It will be good if your team works on the strategy, and not outsourced professionals.

Choosing the Wrong Cloud Service Provider

Cloud service providers have different business models, hence different services. Most startups don’t do enough research to know what could work for them, and what won’t. For instance, when they are looking for a cloud infrastructure provider, they don’t follow the necessary steps to find a provider that is suitable to help them achieve their end goals.

This can be a problem, especially when the vendor has a complicated payment model, or does not offer a platform powerful enough for you to scale.

Solution Ideas and Tips

  • Perform an evaluation before selecting a cloud service provider. You can outsource a professional if none in your team can do that.
  • Chose a service provider based on your needs and not a popularity.
  • Try different cloud vendors before coming to a decision.

For startups looking for IT infrastructure services, you can go through this resource to help you in the decision-making process.

Lack of Security-first approach

Data security is one of the main concerns when businesses adopt cloud computing. Despite the cloud having a sophisticated security architecture, it is important that you have a strategy on how you handle your data security in the cloud. Many startups lack a security-first approach when integrating the cloud into their workflow. In 2020, 49% of businesses have not encrypted their databases, while 33.3% of businesses report that cloud security is the greatest hindrance to cloud adoption. Data breaches are costly and may kill your scalability. In 2020, $1.52 was lost in data breaches, a slight increase from $1.42 million in 2019.

It is therefore important that you lay a foundation that keeps your cloud security at the forefront.

Solution Ideas and tips

  • The best solution for making sure that your startups and businesses are customized data security is taking all the cloud security safety practices into consideration.
  • Investigate how your cloud service provider is handling compliance laws, along with security measures they have in place.

Not Conducting a business analysis

Many startups and SMEs fail to understand the need of asking the question; what benefits would I get from adopting the cloud? It doesn’t matter whether you are adopting cloud computing to increase performance in an app while reducing operation costs, or adopting it into a business to increase productivity. You should try to answer this question. Not only should you answer it, but also document it as a guide in making decisions.

For instance, jumping right in and choosing a cloud service provider without doing an analysis based on your business objectives is likely to end up in an expensive mess.

Solution Ideas and tips

Make data-driven decisions while using your business objectives as a guide.

Jumping Head-first Into The Cloud

Jumping head-first into the cloud is a trap that many businesses fall for when moving their resources to the cloud. Some startups and businesses have solutions or applications that are very complex, running tens of millions of code.

Moving all the components of applications at once to the clouds is likely to cause maintenance problems or lead to poor performance.

Solution Ideas and tips

Move your applications to the cloud in stages.

Neglecting basic requirements (I.E Bandwidth)

This is a basic requirement, yet many startups and businesses tend to underestimate its important. A good internet connection is required to get the best out of the cloud. Also, businesses that depend on the cloud for collaboration will have a hard time being productive.

Solution Ideas and tips

Get a reliable internet service provider, and a backup plan in times of downtimes.

Optimistic enough not to design for failure

Pessimism is a key ingredient in scaling your startup, but in other cases, it will be the downfall of you. Just like traditional IT infrastructure, the cloud sometimes goes down.

It is therefore key to implement the common saying in the cloud community, “Design for failure and nothing will fail”.

Solution Ideas and tips

  • Implement a cloud-optimized failure-tolerant cloud architecture.
  • Choose a cloud service provider with reliable data recovery mechanisms.

Not Projecting For Growth

This is yet another mistake that not only startups and SMEs make, but also well-established companies. Let’s use Pinterest as an example. As stated earlier, they lost $20 million on cloud infrastructure for not making a good forecast of their growth.

Solution Ideas and tips

  • Keep tabs on your numbers and look for trends that can change your cloud needs.
  • Find a cloud service provider that can scale up with you.

Wrapping it Up

Most of the mistakes discussed can easily be avoided, and can save you a lot of operational costs. We hope the article will help you reap the benefits that come with cloud computing without putting your scalability at risk.

With high-performance, reliability, scalability, and security in mind, Serverspace is the missing piece that your startup has been looking for all along. Do you want to scale your business by having all components needed to compete in the competitive world of business in one place? If yes, be sure to check out our irresistible IT infrastructure offers here.

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