What does it take to start a software company? Part 1: Cloud vs. On-Premise
What's it actually take? You've spent how much? Who told you to use that framework and code? These are just a few of the questions I receive from time to time when people ask about software. For now, I'd like to stick with the most basic one. What does it actually take to create a SaaS (software as a service) company.
Many people have this thought that they either know computers or they don't. Fair point I guess, but that's not necessarily true. With any business there are tools that are needed. Good tools, good people, a plan, proper structure, etc. To start your own software company it's actually not that complicated. At least not as complicated as I made it in the beginning.
Cloud or on premise? Having software in the cloud makes updates much easier. Updates are done remotely and pushed at once so all users can see them. A little time consuming to set up properly and manage over time, but hardware is managed by the cloud provider. AWS, Microsoft Azure, Google Cloud, and many others are available all over the world. These IaaS (infrastructure as a service) providers typically are pay as you go and can scale up or down depending on users. Most of these even provide one year "free" with minimal services while the company gets started. I would say that is a great way to go. There is a term, IAM (identity and access management) which is how users are managed, logins, etc. Spending a good five to ten hours learning the platform will save so much time and money. When I started, I spent ten hours navigating through AWS learning resources and taking simple tests. From then on, I was able to manage users at my discretion.
On a persona level, I would not recommend on-premise these days, especially for a start-up software company. Start-up companies come and go daily and unfortunately, as a business owner, you must have an exit strategy from day one. Even if the company fails, do you want $100k of debt, or $20k? Debt can be inevitable in any business and the level of debt should be constantly considered and looked at. On-premise software could also require service techs or a third party to repair issues. The costs just keep going up and up. More and more companies have been letting their staff work from home, and the pandemic of Covid-19 was the push most companies needed. With cloud software, staff can just login on the browser. Most companies in the cloud run containers and have check systems in place to ensure that if a server goes down, the system can automatically bring it up. With on-premise, staff need to login to the server and then access files. If there is a storm or the server goes down, and entire day could be lost, if not more. Don't get me wrong, on-premise might be a way for someone to run their software, but this point of this article is to answer questions for a start-up company. My advice is to always keep the start-up costs as low as possible.
One last point to remember is looking at trends and competitions. There is a reason the large companies have moved to the cloud. In the early days, Oracle and IBM had to build servers at large corporations. I know this because my father worked on the mainframe for nearly forty years. Now, these large companies are in the cloud. The cloud allows these corporations to reach larger audiences while scaling back costs. The cloud has allowed a wider range of customers and allowed for more people to start their own businesses. Without the cloud, I probably would not have considered starting a software company. Well, I probably would have, but that's because I just enjoy getting around obstacles.
On a persona level, I would not recommend on-premise these days, especially for a start-up software company. Start-up companies come and go daily and unfortunately, as a business owner, you must have an exit strategy from day one. Even if the company fails, do you want $100k of debt, or $20k? Debt can be inevitable in any business and the level of debt should be constantly considered and looked at. On-premise software could also require service techs or a third party to repair issues. The costs just keep going up and up. More and more companies have been letting their staff work from home, and the pandemic of Covid-19 was the push most companies needed. With cloud software, staff can just login on the browser. Most companies in the cloud run containers and have check systems in place to ensure that if a server goes down, the system can automatically bring it up. With on-premise, staff need to login to the server and then access files. If there is a storm or the server goes down, and entire day could be lost, if not more. Don't get me wrong, on-premise might be a way for someone to run their software, but this point of this article is to answer questions for a start-up company. My advice is to always keep the start-up costs as low as possible.
One last point to remember is looking at trends and competitions. There is a reason the large companies have moved to the cloud. In the early days, Oracle and IBM had to build servers at large corporations. I know this because my father worked on the mainframe for nearly forty years. Now, these large companies are in the cloud. The cloud allows these corporations to reach larger audiences while scaling back costs. The cloud has allowed a wider range of customers and allowed for more people to start their own businesses. Without the cloud, I probably would not have considered starting a software company. Well, I probably would have, but that's because I just enjoy getting around obstacles.
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