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September 21, 2023
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For startups, how many clouds to use may be the wrong question to ask

For startups, how many clouds to use may be the wrong question to ask


Should early-stage startups pursue a single-cloud, multicloud or on-prem strategy when just starting out?

Well, the simple answer to that question is just one cloud, but in the wake of the Silicon Valley Bank collapse, redundancy has become sexy again: Who wants to be dependent on a single provider for any mission-critical activity?


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But it appears the main consideration isn’t redundancy — it’s actually what sort of compute load a startup has to deal with, according to a TechCrunch+ survey of several startup founders and CTOs. Notably, the founders we heard from were generally bullish on single-cloud usage for young startups, with significant caveats: If a young tech company is simply hosting software, then, to start, a single cloud will suffice, but if the company is working on AI-related tasks like training models, it may need more.

Satyen Sangani, co-founder and CEO of Alation, described when it might make sense to use something other than the cloud:

If your company needs a huge amount of infrastructure right at the beginning (say, you’re training the next large language model), it might make sense to buy hardware instead. Generally, the early days of companies are filled with experimentation, and the flexibility that clouds provide is a massive benefit in those days.

A good question at this juncture is what fraction of “AI-first” startups are training their own models instead of remixing or retooling the UI-layer of existing LLMs, for example. We reckon it’s not too high.

Regardless, after parsing answers to our first question, the next time we ask something related, we’ll amend our prompt to: When should a startup move to a multicloud setup? 

For now, read on for answers to our question: Should early-stage startups pursue a multicloud or on-prem focus when they’re just starting out?

We spoke with:

  • Tobi Knaup, founder CEO, D2iQ
  • Mang-Git Ng, founder and CEO, Anvil
  • Joe Mainwaring, director of Infrastructure, WorkTango
  • Vikas Bhatia, co-founder, CEO and chief risk officer, JustProtect
  • Satyen Sangani, co-founder and CEO, Alation
  • Steve Mullaney, president and CEO, Aviatrix
  • Ed Thompson, CTO, Matillion
  • Adrian Estala, VP, field CDO, Starburst
  • Shane Buckley, president and CEO, Gigamon

Tobi Knaup, founder and CEO, D2iQ: As always, it depends. But most software startups should start on one cloud and be careful not to create too much lock-in by using proprietary services so you can optimize and migrate more easily later.

If your company needs a huge amount of infrastructure right at the beginning (say, you’re training the next large language model), it might make sense to buy hardware instead. Generally, the early days of companies are filled with experimentation, and the flexibility that clouds provide is a massive benefit in those days.


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