Cloud computing is a model for enabling on-demand access to shared computing resources like networks, servers, storage, applications and services that can be rapidly provisioned with minimal management effort. It includes software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS). The cloud computing market is projected to grow significantly in the coming years. For startups, the cloud provides opportunities to build applications and business models with low costs and easy access for users. Large enterprises are also beginning to utilize the cloud to reduce IT costs and focus on their core business.

1. What’s the big deal about
cloud computing?
© Dan Reynolds
Vishy Venugopalan · Longworth Venture Partners · @midtownninja

2. About me
Analyst at Longworth Venture Partners
Prior Lives
• Infrastructure software analyst at The 451 Group
• Software engineer, Morgan Stanley

3. Everything old is new again…

4. … or is it?

5. Cloud computing buzz
4500% in
18 Job postings mentioning “EC2”
months
Amazon.com vs AWS network bandwidth over time

6. So what is cloud computing?

7. And why the buzz?
Source: UC Davis networking documentation from 1998
Photo credit Gerard Casey, Rob Graham, Paul Loebig
credit:

8. Cloud computing on- is a model for enabling convenient,
demand shared pool
network access to a of configurable
computing resources (e.g., networks, servers, storage, applications, and services) that can be
rapidly provisioned and released with
minimal management effort or service provider
interaction.
-- NIST Cloud Computing Project

9. A (very) brief taxonomy
• Software as a Service
– $21bn by 2012 (20% CAGR)
• Platform as a Service
– $9bn by 2012 (160% CAGR)
• Infrastructure as a Service
– $4bn by 2012 (60% CAGR)
Sources:
Sources AMR, Gartner, IDC, William Blair & Co.

10. © teri-hatcher.com
But is the market real?

11. The market is real and spectacular
Strong on-ramp for New kinds of
existing applications applications
70
Projected cloud computing
60 spend
50
40
$bn
30
20
10
Credit: UC Paleontology Museum + Nat’l Center for Science Education
0
2008 2009 2010 2011 2012
Smaller Enterprises Larger Enterprises Cloud = IT’s Cambrian Explosion
--Irving Wladawsky Berger
Source:
Source IBM, Enterprise Cloud Summit 2009

12. This is how startups
see the cloud
Copyright holder unknown
© Disney
This is how large enterprises
see the cloud

13. Killer apps for the cloud (so far…)
• Web applications
• Batch jobs
– Scientific computing
– Rich media processing
• Test+dev and one-off
projects
• Getting out of the business
of IT
Credit: Geek and Poke

14. So why should startups
be excited?

15. Cloud as new business enabler
• Low user friction
• Internet standard abstractions
• Easy client access
• Potential cost savings (?)

16. What’s so cool this time?
Economies of scale
+ Low user friction
+ Ease of integration
Opening up the SMB IT opportunity?

17. What’s so cool this time?
Openness &
network effects
Giant market
opportunity
No single winner

18. Summary
• Cloud computing is a tectonic shift and it’s real
• There are many issues yet to be worked out
• The cloud enables new apps and new business
models
• The cloud’s inherent openness encourages
innovation
• The cloud’s unique characteristics might open up the
SMB market

19. Resources
• NIST Cloud Computing Project
• McKinsey and Berkeley reports on cloud computing
• Intuit Partner Platform
• Everyone who’s here!

20. Thank you!
Vishy Venugopalan
vishy@longworth.com
@midtownninja