Cloud computing startup funds are beginning to flow as corporations embrace the platform. Interest is accelerating, but what does that mean for business? Is the cloud developing into a “Safe career”
2011 marked an incredible rookie year for cloud services in the mainstream. Apple unveiled its long-awaited iCloud functionality, which made it easier for the increasing number of consumers with multiple iOS devices to tie their media collections together. Amazon pulled back the curtain on their multiple cloud platforms: cloud music player, cloud drive and of course Amazon Silk, a cloud-based browser for the Kindle Fire which blazes through the net at a fast clip because it doesn’t process anything on the actual device, but in a remote server.
As companies like Dropbox continue to gain traction in the larger technology landscape, investors are taking note.
Reports indicate that the venture capital investment firm Kleiner Perkins Caufield & Byers has talked about the idea of starting a fund focused solely on funding companies that sell cloud services to businesses. The firm is based in California and this announcement is turning heads because of the firm’s investment pedigree, which includes recent success stories with Zynga and Groupon.
The announcement comes as Market Research Media speculates at the potential growth of the cloud industry over the next decade. Analysts are predicting growth of about 30% a year from now until 2020, at which point the industry could be turning over about $270 billion in the market. Cloud solutions are gaining traction among enterprise companies and that change alone has brought considerable capital into the market for cloud services.
If Kleiner Perkins does establish a fund for cloud development, it wouldn’t be the first time they threw money into developing cloud technologies. AppDynamics received $20 million in funding to develop management for web applications. KPCB collectively generated $100 million to fund cloud startups last year.
In addition to this influx of cash into the cloud industry, a number of cloud service providers have been absorbed into larger entities. Citrix Systems, Inc., an industry leader in cloud, networking and virtualization software, recently added Cloud.com to it stable, bolstering its offering and increasing the market valuation of their brand. Rackspace hosting is yet another addition to the cloud, innovated by Rackspace who has been a leader in the industry for several years.
So what does this mean for the cloud business? It’s likely we will see these trends grow over the next few years as cloud cofferings are picked up by more and more businesses. Amazon has already begun lending out cloud servers to the like of Netflix and other companies; chances are high that b2b clouds services will continue in that vein. Established providers like Rackspace currently offer cloud hosting, VPS and other cloud services in its stable of wares may stand to make a killing over the next decade in capitalization or advanced business.
Whatever the case, it’s clear that the cloud is here to stay. The industry will have to address issues of privacy and security and the eventual export into foreign markets (and privacy laws). As the cloud continues to evolve, it will tighten up and eschew its rough edges to become a platform difficult to live without.