Can New Digital Companies Compete with Web Giants by Harnessing the Cloud?

cloud computing adoption

The growth of the cloud has provided a unique opportunity for aspiring digital entrepreneurs to pit their wits against established software companies. Dropbox, for instance, the brain child of US tech savvy inventor Drew Houston, sprang from nowhere to be one of the largest online back-up storage solutions in just a few years.

A great idea, a brilliant entrepreneur, and some seed funding can propel a new business into the stratosphere and although not all start-ups will enjoy the same success as Dropbox there are a number of reasons why it’s now easier for the davids to take on the goliaths in the digital world.

  • Cost
  • Flexibility
  • Mobility

The Cloud as a utility

The cloud offers software, data access and storage services that can be paid for as and when they are used. The business does not have to pay for costly on site servers, software licenses or maintenance. This utility model suits start-ups as it frees them from the capital expense of buying an IT system. But it also helps cash flow, as services can be scaled up or down as demand necessitates.

Flexibility is key

Many businesses using the cloud have cited flexibility as a key driver. It’s perhaps not surprising in these uncertain times, when demand can’t easily be measured that companies need flexible solutions they can easily control. The four essential characteristics they’ve cited are:

  • On demand-self service
  • Broad network access
  • Utility service
  • Scalability

Finding the gap in the market

New software companies are using all the advanced technological innovations they can to compete with their bigger rivals and one area where they have managed to take some market share is CRM – customer relationship management. US giant Salesforce has dominated this sector for almost a decade, with Microsoft Dynamics also enjoying a large market share. But as these two giants have grown in size so flaws have emerged in their business models that other smaller companies have spotted and are able to take advantage of. One such firm is UK based Workbooks. They’ve grown by targeting small and medium businesses and offering highly tailored packages that meet particular business needs. By keeping services affordable, maintaining good customer relations and offering software that clients can use easily, Workbooks has spotted a ‘gap in the market’ and has been able to take a slice of the pie from the big companies.

A level playing field

Of course industry giants have brand recognition and sturdier finances to survive difficult times, but the newer firms are competing by offering more tailored solutions and by harnessing the power of social media to reach a global audience. They can save money by using the cloud and the power of social media means they can interact with customers more effectively and promote goods and services using these new digital channels – something the big companies are not always good at. A bad customer experience can quickly go viral, and so all modern companies are now on the same playing field when it comes to satisfying the consumer needs. Having a huge marketing budget is not necessarily going to give the big companies the leverage they once enjoyed, as new companies can now harness the power of the cloud to help them compete.

About the Author:
jeff magonicalJeff Macgonical is an experienced UK based writer and journalist. He has worked for the BBC and has interviewed top politicians, CEO’s, and broken many exclusive stories over the years. Currently, Jeff is working as a freelance blogger and writer in the cloud, SaaS and technology markets.

Image: msc-photodesign / Flickr

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