The cloud has forced a shift in the way organizations operate. It allows them to take risks and innovate in ways that never would have been possible before. Startups now have the ability to utilize cloud services to build new solutions without having to search for venture capital, and then provide investors with a near-finished solution to raise additional funding. This is why we see tons of investment in providers such as Google and Salesforce whom are viewed as the key to running next generation business systems. So why haven’t service providers started thinking this way?

Organizations can also use this methodology to sell services to their customers. Right now when it comes to developing new services, there is often a huge amount of time, resources and money spent on planning how to develop and host these solutions. Organizations can scale and deploy back-end solutions to meet the growing needs of their customers without saying “sorry, we can only provide this level of service”. It’s a more organic way to develop and grow services without trying to estimate ahead of time the amount of resources required to provide these services.

For example, let’s assume that you want to set up a service that requires extra computing power during off-hours. Why should you invest in these resources on a permanent costing model when you can subscribe to it as a pay-per-usage model? This means you can run your service more cheaply by taking advantage of lower computing costs due to the off-peak usage, and not having to front the costs of building this type of service. Capex become Opex and the service can be run in trial mode almost instantaneously without having to purchase and set-up a complex lab environment.

From an end customer perspective, cloud makes startups more efficient because a lot of the standard corporate functions can be outsourced to cloud providers such as storage and email capabilities. This means that instead of hiring IT staff to run these operations, the headcount can go towards more pressing business-critical functions that drive the organization. For a startup, having just one or two more bodies working on the key corporate focus area can make a substantial difference in the long-term success of the organization.

The problem that service providers struggle with is getting this type of messaging heard within the organization. We’ve been too complacent with creating messaging and services that reach the biggest customers thinking that this is the best revenue stream for service development. Unfortunately, this market is small and over-saturated with competition. Cloud is going to force us to re-evaluate the way we do business and look at the dynamic of the marketplace. Startups that are focused on cloud services are going to be the new key industry for service providers, and we need to better understand how to work with them to help make them more successful (and as a result, make the service providers more successful). To do that, we need to build services to help make these startups more successful, but first we need to start to listen to them better.