(We originally posted this in 2021. You can read more of our original ideas in our archive. You can order a business plan of this idea here.)
Problem: I recently came across this Tweet from my college classmate Vinay Iyengar,
Was amazed to see that over 70% of large companies still have the majority of their application workloads "on-prem." One interpretation is that we are still in the early innings of cloud adoption, but I think the more likely story is the public cloud will never be ubiquitous.
Is there an opportunity to help companies move their workloads from on-prem to the cloud?
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Solution: This business would focus on moving SMB companies to the cloud and help them manage their multi-cloud, off-prem workloads. While players like Microsoft (Azure), Google (G-Cloud), and Amazon (AWS) are all eating up Fortune 500 cloud deals, this business would focus on the top 100,000 businesses in the world. Individually, these businesses are so small that large corporations will not sell directly to them because there is far too much effort required for a small payoff. However, in aggregate (and after developing a replicable playbook) there’s a definite opportunity for a new player to become the SMB cloud-migration and management expert.
As described by Andreessen Horowitz in their April 12, 2021 post:
The cultural and generational trends are particularly clear when it comes to the cloud, with younger tech companies significantly further ahead in the move to the cloud. In our survey, 62% of tech company respondents put more than half of their application workloads in the public cloud. By contrast, just a quarter of financial companies used the cloud to that extent, and 42% of financial companies put less than 10% of their application workloads in the cloud.
Cloud use is also far more prevalent among smaller companies, with 78% putting at least half of their workloads in the public cloud. Among bigger companies, however, this share is just 24%—a smaller portion than the 29% of these big companies that put less than 10% of apps in the public cloud.
Despite these differences, it’s clear that cloud computing is now ubiquitous, and most companies anticipate transferring even more of their applications to the cloud over the next few years.
Amazon Web Services (AWS), Microsoft, and Google are the dominant cloud providers, but most companies use more than one provider. While a multi-cloud approach makes sense as a form of risk mitigation and to avoid vendor lock-in, it also means that companies need better tools to manage work across clouds. The use of cost tracking and optimization tools is fragmented, and cloud backup tools are underutilized.
(Excerpt from, How Tech Stacks Up in B2B - Andreessen Horowitz (a16z.com))
There undoubtedly is a huge opportunity here to not only migrate cloud workloads but also to integrate these workloads for smaller companies that are currently managing cloud services in-house. This business could also focus in on answering this core question: what need to be done in order to effectively run a cloud-first business in all contexts?
The broader market trends are clear:
More companies will begin to rely on cloud computing in the future. According to Grand View Research, “the global cloud computing market size was valued at USD 274.79 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 19.1% from 2021 to 2028.”
Most companies will use more than one cloud provider and need tools to manage this work across clouds. As Flexera describes, “92 percent of enterprises have a multi-cloud strategy; 82 percent have a hybrid cloud strategy… On average, respondents use 2.6 public and 2.7 private clouds.”
Smaller companies are more agile and able to adapt to new cloud technologies. This isn’t a surprise. Larger companies move slower. However, it opens up an opportunity to aid these smaller companies specifically.
If the cloud is the future, this company would serve as a bridge between the behemoths of cloud and more casual small businesses.
Monetization: Sales for these services
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)