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How to Start a Cloud Computing Business

Do you want to start a cloud computing company? If YES, here is a complete guide to starting a cloud computing business with NO money and NO experience plus a sample cloud computing business plan template.

If you are ICT inclined and you are looking for a business to start as an aspiring entrepreneur, then you don’t need to look far because there are loads of businesses in the industry that you can successfully start and one of them is a cloud computing company.

Cloud computing is an emerging paradigm computing concept that enables both information technology infrastructure and software to be delivered directly over the internet as a service. This is an arrangement that enables companies expand their network capacity and run applications directly on a vendor’s network; it offers a host of advantages and radically lowers IT cost.

The lower budgetary requirements and commitments allow even smaller companies to piece together an IT project without spending on purchasing legacy servers and storage systems.

So also, the burden of developing and maintaining the technological expertise required in running the network is transferred to the service provider. The pay-per-use basis of cloud computing helps transform the way IT departments create and deploy customized applications during these difficult times.

By offering a more cost-effective, less risky, and fundamentally faster alternative to on-site application developments, cloud computing is poised to transform the economics of information technology in the next few years.

With the internet being a foundation for cloud computing, the term “cloud” is used as a metaphor for the internet. Thanks to new and improved networks, the internet is fast becoming a vehicle for delivering computational requirements.

The ubiquity of the internet and the widespread availability of high-speed broadband access are the primary factors driving the movement towards the cloud.

So, if you have done the relevant ICT courses, then you might want to venture into this business. If you have been tinkering with starting your own cloud computing company but do not know how to go about it, then you should ponder over using the following measures which this article promises to give.

Steps to Starting a Cloud Computing Business

1. Understand the Industry

The global cloud storage market is expected to grow from USD 18.87 billion in 2015 to USD 65.41 billion by 2022, at a Compound Annual Growth Rate (CAGR) of 28.2%. The cloud storage solution and services are currently being offered by numerous vendors such as IBM, Microsoft, Google, Amazon Web Services, VMware, Box, Fujitsu, RackSpace, AT&T and HP.

These vendors are selling variations of cloud storage solutions and managed services. However, there is a price war between these cloud storage service providers globally, as they keep reducing the prices at regular basis and increasing the volume of storage.

The storage solutions are evolving as several companies have entered into the market and are offering advanced solutions to store data at minimum costs.

The first digital storage device was introduced in 1890 when Herman Hollerith, founder of Tabulating Machine Company, used punch cards to read and record data. Thus, the storage market has evolved and in the present scenario, the user can save up to 1 GB of data free on cloud storage and access it from any remote location.

Factors such as rising need for big data storage and increasing adoption of cloud storage gateways are driving the demand for cloud storage solutions globally.

The cloud storage market has been segmented on the basis of types to solutions and services; on the basis of solutions into primary storage solution, backup storage solution, cloud storage gateway solution, and data movement and access solution; on the basis of services into consulting services, system and networking integration, and support training and education.

Cloud storage provides users with immediate access to a broad range of resources and applications hosted in the infrastructure of another organization via a web service interface. Cloud storage can be used for copying virtual machine images from the cloud to on-premises locations or to import a virtual machine image from an on-premises location to the cloud image library.

In addition, cloud storage can be used to move virtual machine images between user accounts or between data centres. Cloud storage can be used as natural disaster proof backup, as normally there are 2 or 3 different backup servers located in different places around the globe.

Users access cloud computing using networked client devices, such as desktop computers, laptops, tablets and smartphones and any internet enabled device such as Home Automation Gadgets. Some of these devices—cloud clients—rely on cloud computing for all or a majority of their applications so as to be essentially useless without it.

Some of the factors that encourage entrepreneurs to start their own cloud computing business could be the growing recognition of the economic and operational benefits and the efficiency of cloud-computing model that promises strong future growth.

As companies ease out gradually from economic uncertainties and financial shackles, widespread adoption of cloud services is in the offing. The pragmatic and successful adoption of this technology concept by early adopters will pave the way for mass enterprise adoption in upcoming years.

The transition of enterprises from virtual machines to the cloud will additionally extend the impetus required for strong growth.

Poised to score the maximum gains will be end-to end cloud-computing solutions that offer complete functionalities ranging from integration of internal and external clouds, automation of business critical tasks, and streamlining of business processes and workflow, among others.

Over and above, starting a cloud computing company requires professionalism and good grasp of the ICT industry. Besides, you would need to get the required certifications and license and also meet the standard security expected for players in the industry in the united states; the industry is heavily regulated to guide against fraud and criminality.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographics composition of those who require the services of a cloud computing company is not restricted to people and organizations in your immediate community or state, but it cuts across people and organizations who have one or more things to do with the internet from all over the world.

This is so because cloud computing is an internet based business hence they work for people and organization all across the globe.

So, if you are looking towards defining the demographics for your cloud computing company, then you should make it all encompassing. It should include business oriented people and organizations within and outside the United States who run a 21st century business.

3. Decide Which Niche to Concentrate On

Cloud computing as a whole is a hosted infrastructure; it uses the internet in order to deliver IT services, thus eliminating capital expenditure (CAPEX) on infrastructure. It also helps in ensuring consumption-based billing, and is witnessing increasing adoption in a number of end-use sectors including government organizations.

This is expected to be the key driving force for the market in the coming years. Concerns regarding security, privacy, and data access are the major restraints to market growth, since they may adversely affect business performance. Niches or ideas that may make you stand out in this vast industry includes.

  • Medical Cloud computing
  • Social media cloud computing
  • Cloud computing consultancy
  • Large companies cloud computing
  • Small business cloud computing
  • Cloud computing for Universities
  • Tax cloud storage and computing etc.
The Level of Competition in the Industry

The level of competitions in the cloud computing services industry does not in any way depend on the location of the business since all cloud computing companies can operate from any part of the world and still effectively compete in the global market.

When it comes to cloud computing services, distance is never a barrier when competing for clients especially international clients.

What most clients (individual and corporate clients want is safe, secured and seamless services, hence they are ready to hire the services of a cloud computing company no matter the part of the world they operate from as long as they have good track record and can deliver excellent results when it comes to seamless data transfer and security amongst other services.

But over and above, there are several cloud computing companies scattered all around the United States and in the cyber space. So, if you choose to start your own cloud computing company in the United States, you will definitely meet stiffer competitions not only amongst cloud computing companies in the United States, but also all over the globe.

Besides, there are larger cloud computing companies that determines the trends in the industry and you should be ready to compete with them for clients.

4. Know Your Major Competitors in the Industry

In every industry, there are always brands who perform better or are better regarded by the customers and general public than the others.

Some of these brands are those that have been in the industry for a long while and so are known for that, while others are best known for how they treat their customers. These are some of the leading cloud computing companies/brands in the United States of America and also in the globe;

  • Akamai Technologies Inc.
  • Amazon Web Services LLC
  • CA Technologies
  • Dell Inc.
  • ENKI
  • Flexiant Ltd.
  • Google Inc.
  • Hewlett-Packard Development Company L.P.
  • IBM Corporation
  • Joyent Inc.
  • KloudData Inc.
  • Layered Technologies Inc.
  • Microsoft Corporation
  • Netsuite Inc.
  • Novell Inc.
  • OpSource Inc.
  • Oracle Corporation
  • Rackspace Hosting Inc.
  • Red Hat Inc.
  • com Inc.
  • Skytap Inc.
  • Terremark Worldwide Inc.
  • Yahoo! Inc.
Economic Analysis

Cloud storage and Hosting is one of those innovations borne out of the need for companies to reduce cost of operation. Cloud computing makes it possible for companies to cut down on overhead cost by conducting the computer-related aspects of their business virtually.

Cloud computing allows you to entrust the computer-related aspect of your business into the hands of third party providers while you focus on other aspects of your business like beating the competition and increasing profits. The services or applications that organizations are moving to the cloud are largely dependent on company size and industry.

For instance, storage is the primary service for 40 percent of small businesses and 35 percent of mid-sized businesses, whereas large businesses and the federal government are first and foremost going to the cloud for conferencing and collaboration applications (40 percent and 39 percent, respectively).

Organizations are also turning to the cloud for messaging, office and productivity suites, and business process apps and computer power.

However, reducing IT operating costs is only one of several cloud benefits, according to cloud users surveyed by CDW. In fact, organizations implementing or maintaining cloud computing point to increased efficiency (55 percent), improved employee mobility (49 percent), increased ability to innovate (32 percent) and freeing current IT staff for other projects (31 percent) as the top benefits.

Reduced IT operating costs come in fifth on the list of benefits (25 percent). Business operations frequently must balance between fixed costs, concrete and intangible inventories, and unforeseen operational costs. Fixed costs can include information processing, file retrieval and data storage.

Before the advent of modern information technology space was needed for filing cabinets and document storage in the form of boxes or containers.

The progression of electronic media capacity and the Internet’s influence on business transactions presents many advantages to improve data handling. Instead of paying rental fees for a building or storage facility, organizations now have the option of paying for cloud server storage.

The cost of a cloud server is much smaller than the cost of a lease or payment for physical facilities which also requires the maintenance and monetary investment of often multiple individuals to care for both the property and the documents.

5. Decide Whether to Buy a Franchise or Start from Scratch

When it comes to starting a business of this nature, it will pay you to buy the franchise of a successful cloud computing company/brand as against starting from the scratch. Even though it is expensive buying the franchise of a cloud computing company, but it will definitely pay you in the long run.

While the term ‘cloud computing’ is new, the concept of sharing by multiple businesses and locations via secure remote centralized data centres has been around since the mid-1960s (someone say ‘time-sharing’).

In the full sense, cloud computing today underscores a paradigm shift from local office computing systems that are on-site to a “utility computing” model in which shared and scalable computer infrastructure, software and business processes are provided via the Web for a monthly or annual fee.

This is why buying into a franchise in this industry is better than starting from the scratch because unlike starting from the scratch, buying into a franchise offers you the following benefits; Easy access, Integrated applications, Flexible and scalable VOIP Unified Telephony, and Security.

6. Know the Possible Threats and Challenges You Will Face

If you decide to start your own cloud computing company today, one of the major challenges you are likely going to face is the presence of well – established cloud computing companies who are offering same services that you intend offering. The only way to avoid this challenge is to create your own market.

Some other threats that you are likely going to face as a cloud computing company operating in the United States are unfavourable government policies, the arrival of a competitor within your location of operation and global economic downturn which usually affects purchasing/spending power.

There is hardly anything you can do as regards this threats other than to be optimistic that things will continue to work for your good.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

When considering starting a cloud computing company, the legal entity you choose will go a long way to determine how big the business can grow; some cloud computing companies design their business and services for regional/community market, some for national market, while others for international market.

Generally, you have the option of either choosing a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for a business such as a cloud computing company.

Ordinarily, general partnership should have been the ideal business structure for a small – scale cloud computing company especially if you are just starting out with a moderate start-up capital. But people prefer limited liability Company for obvious reasons.

As a matter of fact, if your intention is to grow the business and have clients both corporate and individual from all across the United States of America and other countries of the world, then choosing general partnership is not an option for you. Limited Liability Company, LLC will cut it for you.

For example, Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships.

Limited liability companies are simpler and more flexible to operate and you don’t need board of directors, shareholders meeting and other managerial formalities.

These are some of the factors you should consider before choosing a legal entity for your cloud computing company; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.

If you take your time to critically study the various legal entities to use for your cloud computing company, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.

Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your cloud computing company so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company; you will enjoy flexibility in ownership and in your management structures.

8. Choose a Catchy Business Name

Generally, when it comes to choosing a name for a business, it is expected that you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents.

Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business. If you are considering starting your own cloud computing company, here are some catchy names that you can choose from;

  • Santa Fe Cloud Computing Company, LLC
  • Andrew & Chris ICT Company, LLP
  • Triple Gee Technologies, LLC
  • Cast ICT Solutions, Inc.
  • Periscope Cloud Computing, LLC
  • Little Joe & Co Group, LLP
  • Orange ICT World Wide, Inc.
  • Dane Damply ICT Services Co.
  • Space Wagon ICT Corporation, Inc.
  • Prime Edge ICT Consulting, Inc.
  • Kent Bush Cloud Computing Company
  • Binary ICT Solutions Ltd.

9. Discuss with an Agent to Know the Best Insurance Policies for You

In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is imperative to create a budget for insurance policy covers and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your cloud computing company.

Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own cloud computing company in the United States of America;

  • General insurance
  • Health insurance
  • Liability insurance
  • Workers Compensation
  • Overhead expense disability insurance
  • Business owner’s policy group insurance
  • Payment protection insurance
  • E&O Insurance.
  • Cyber Liability Insurance (Data Breach Insurance).
  • Fidelity Bond Insurance.
  • Employment Practices Liability Insurance.

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

IT professionals know that handing data over to a third-party is always risky, but cloud storage and hosting creates unique concerns for IP.

Protecting your intellectual properties can be stressful but in the modern world where ideas and patents are being stolen on daily basis you need to consider protecting your hard-earned intellectual property rights. If you want to protect your intellectual properties; company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection.

If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subject to the review of attorneys as required by USPTO.

11. Get the Necessary Professional Certification

Aside from the results you produce, professional certification amongst key members of staff is one of the main reasons why most cloud computing companies stand out. If you want to make impact in the cloud computing services industry, you should work towards acquiring all the needed certifications in your area of specialization.

You are strongly encouraged to pursue professional certifications; it will go a long way to show your commitment towards the business. These are some of the certifications you can work towards achieving if you want to run your own cloud computing company;

  • CCSK — Cloud Security Alliance
  • Cloud U – Rackspace
  • CompTIA Cloud Essentials — Comp TIA
  • Cloud Certified Professional —
  • IBM Certified Cloud Solution Architect v1 and v3 – IBM
  • com Certified Professional —
  • VMware Certified Professional – Vmware
  • Red Hat Certificate of Expertise in Infrastructure-as-a-Service — Red Hat

Please note that the higher your qualifications and experience (expertise), the easier it is for you to secure high profile cloud computing deals from corporate clients.

12. Get the Necessary Legal Documents You Need to Operate

The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations.

If you do, it won’t be too long before the long hand of the law catches up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own cloud computing company in the United States of America;

  • Certificate of Incorporation
  • Business License and Certification
  • Business Plan
  • Non – disclosure Agreement
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Consulting contract documents
  • Online Terms of Use
  • Online Privacy Policy Document
  • Apostille (for those who intend operating beyond the United States of America)
  • VAT registration
  • Federal tax identification number

13. Raise the Needed Startup Capital

No doubt when it comes to financing a business, one of the first things and perhaps the major factor that you should consider is to write a good business plan.

If you have a good and workable business plan document in place, you may not have to labour yourself before convincing your bank, investors and your friends to invest in your business. Here are some of the options you can explore when sourcing for start – up capital for your cloud computing company;

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell of shares to interested investors
  • Applying for loan from your bank/banks
  • Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
  • Source for soft loans from your family members and your friends.

14. Choose a Suitable Location for your Business

Cloud computing business and most ICT services based type of businesses does not necessarily require that you see physically with your clients hence it can be located anywhere since most of your business deals are conducted over the internet.

The fact that you can operate your cloud computing company from your home does not mean that location has little influence on the success of a cloud computing company.

If you have taken your time to study the cloud computing services cum ICT services providers’ industry, you will realize that players in this industry are willing to pay expensive rents in order to stay in a busy business district or ICT hub; a place where business activities and ICT activities are at its peak.

It cannot be overemphasized that the location you chose to open your cloud computing company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power and lifestyle.

If you make the mistake of renting or leasing a facility for your cloud computing company in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential clients.

It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget.

If you are new to the dynamics of choosing a location for a business such as cloud computing company, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your cloud computing company.

So, if you are looking for a location for your cloud computing company, ensure that it is a place that is located in a business district/ICT hub in your city, a place that is visible and easily accessible. Of course, you would not want to locate this type of business in the outskirt of town.

Your clients should be able to drive down and locate your office with little or no difficulty. Vendors also should be able to easily locate your office when they have to come submit their bid/proposals, documents or for background checks et al.

15. Hire Employees for your Technical and Manpower Needs

Cloud storage is based on highly virtualized infrastructure and is like broader cloud computing in terms of accessible interfaces, near-instant elasticity and scalability, multi-tenancy, and metered resources. Cloud storage services can be utilized from an off-premises service (Amazon S3) or deployed on-premises.

Cloud storage typically refers to a hosted object storage service, but the term has broadened to include other types of data storage that are now available as a service, like block storage. Cloud computing resources can be rapidly provisioned and released with minimal management effort or service provider interaction.

This means that an organization can use more or fewer servers, stores, applications, or services, and can configure the ones it uses to meet its requirements  when it wishes to do so, and without major effort. Cloud computing has five essential characteristics.

They are on-demand self-service, broad network access, resource pooling, rapid elasticity, and measured service. These are the features that distinguish it from other computing models. It has three service models. These are the basic kinds of service that cloud service providers provide.

They are Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). When it comes to choosing between renting and leasing an office space, the size of the cloud computing company you want to build, and your entire budget for the business should influence your choice.

If you have enough capital to run a standard cloud computing company, then you should consider the option of leasing a facility for your office; when you lease, you will be able to work with long – term planning, structuring and expansion. As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision.

Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Education Consultants, ICT Consultants, Business Development Executive/marketing Executive, Customer Service Officer or Front Desk Officer, and Accountant.

Over and above, you would need a minimum of 8 key staff to effectively run a medium scale but standard cloud computing company.

The Service Delivery Process of the Business

Widespread cloud computing is made possible by the Internet, and this is the most common way of accessing cloud resources. Intranets and dedicated networks are sometimes used too, in the case of a private cloud. When you get into cloud hosting these server farms behave as one large storage space and processor.

The actual website data (such as HTML/CSS files, images, etc.) is spread out over a cluster of hard drives connected together, much like one virtual disk with tremendous capacity. Server clusters can provide a cloud setup with literally unlimited machines to run through. You could also build a cloud space with just 5-10, so the methodology is scalable to boot.

You may be wondering how the combination of multiple server environments will scale as any cloud system grows in size.

The distribution of power and storage capacity is often controlled by a backend software OS/system. The server admin would be able to log into the backend via terminal and check CPU load of all the machines, along with other vital system information.

This process is called virtualization which provides a layer of abstraction between the software and hardware components. Cloud server administrators can easily optimize the cluster for storage efficiency, optimal energy usage, data backups and more.

It is important to state that a cloud computing company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated business cum services process is not cast on stone.

16. Write a Marketing Plan Packed with ideas & Strategies

As a cloud computing company, you would have to prove your worth over and over again before you can be awarded any cloud computing contracts from corporate clients. So, if you have plans to start your own cloud computing company, it will pay you to first build a successful career in the ICT industry.

People and organizations will hire your services to help them handle all their cloud computing needs if they know that they are going to get value for their money.

So, when you are drafting your marketing plans and strategies for your cloud computing company, make sure that you create a compelling personal and company profile. Asides from your qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in time past as it relates to cloud computing services and the organizations you have worked for.

This will help boost your chances in the market place when sourcing for cloud computing contracts et al. Please note that in most cases, when you bid for cloud computing contracts from corporate organizations, you will be called upon to defend your proposal, and so you must be pretty good with presentations. Here are some of the platforms you can utilize to market your cloud computing services;

  • Introduce your business by sending introductory letters alongside your brochure to all the corporate organizations, small scale businesses and the international business community in the United States
  • Promptness in bidding for cloud computing contracts from corporate organizations
  • Advertise your business in relevant ICT magazines, radio stations and TV stations (make yourself available for ICT related talk shows and interactive sessions on TV and Radios)
  • List your business on local directories/yellow pages
  • Attend international ICT expos, seminars, and business fairs et al
  • Create different packages for different categories of clients in order to work with their budgets
  • Leverage on the internet to promote your business (when you blog regularly on key issues as it relates to your business, people would consider you an expert in the field)
  • Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks.
  • Engage the services of marketing executives and business developers to carry out direct marketing

17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be.

One of the secrets of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.

If your intentions of starting a cloud computing company is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.

In promoting your brand and corporate identity, you should leverage on both print and electronic media and also the social media (the internet). As a matter of fact, it is cost effective to use the internet and social media platforms to promote your brands, besides it is pretty much effective and wide reaching.

Another strategy is to sponsor relevant community based programs, TV and radio programs, advertise your business in relevant magazines and newspapers. Below are the platforms you can leverage on to boost your brand and to promote and advertise your business;

  • Place adverts on ICT magazines and related newspapers, radio stations and TV stations.
  • Encourage the use of word of mouth publicity from your loyal customers.
  • Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Badoo, Google+ and other platforms to promote your business.
  • Ensure that we position your banners and billboards in strategic positions all around your city.
  • Distribute your fliers and handbills in target areas in and around your neighbourhood.
  • Contact corporate organizations, small businesses and the international business community et al by calling them up and informing them of your organization and the cloud computing services you offer.
  • Advertise your business in your official website and employ strategies that will help you pull traffic to the site
  • Brand all your official cars and ensure that all our staff members and management staff wear your branded shirts or caps at regular intervals.