Recently over on ReadWriteWeb, Alex Williams posted a review of the services startups involved in the Y Combinator program use for their various hosting needs. The statistics covered a number of services but of most interest to this blog are web and email hosting. It’s worth looking at these statistics, not so much as a way to compare vendors (although that in itself is interesting) but more to look at the uptake of cloud services by startups and to compare that to the general IT market.


First a little bit of context to frame this discussion. A recent report by Goldman Sachs found that 99% of respondent’s infrastructure was still 90% delivered from on-premise hardware. That’s a massive percentage – even allowing for margin of error we can see that corporate IT is firmly ensconced in an on-premise strategy.

So over to the Y Combinator startups. Obviously one needs to bear in mind that these are web startups from an incubator that gives them significant exposure to companies working with Cloud Computing, given that one would expect there to be significant use of cloud hosting by these companies. But the relative proportions of cloud hosting versus self hosting are pretty staggering – well over half of the startups are actively using the cloud for their hosting, with one of a number of providers. Similarly for email hosting – close to 75% of the companies host their email in the clouds with Google.

Contrast the Goldman Sachs results with those from Y Combinator. I’d contend that the later are a glimpse of the future and that traditional corporate IT will rapidly move to the cloud as well. Especially so as the relative economics of self hosting versus cloud hosting further drive a justification for the move to the cloud.

This accelerating move to the cloud is one that presents a significant opportunity and a significant change agent for traditional IT. I’ve often said that 2011 is the year of the cloud, it’s also the year that technologists need to upskill themselves to understand this new paradigm.It’s for that reason that I’m really excited about both the CloudCamps I’m running throughout the year, and especially the educational series that Rackspace is supporting – we’ll have a totally different landscape, and a better educated marketplace, in 12 months time.

By the way – sign up here and you’re in the chance to win a free copy of Charles Babcock’s new book Management Strategies for the Cloud Revolution: How Cloud Computing is Transforming Business and Why You Can’t Afford to Be Left Behind.

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Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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