Cloud

Cloud executives feel good about VC investing right now

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More is better for cloud executives. The industry is feeling good about cloud investing in the next year, particularly because their technology helps entrepreneurs create many more companies, faster than ever before.

“Now you can throw [together] $50,000, a couple guys, and a good concept, and get [a product] in a couple of weeks,” said Cloudability chief executive Mat Ellis at the CloudBeat conference in Redwood Shores, Calif, “Maybe the cloud will allow more good companies to be born.”

The more “good” companies out there, the more opportunity to get a hit technology that changes the industry. Options equal opportunity for the cloud community. And because it’s so easy to get a backend, inventory services, customer service, customer relationship management and so much more in the cloud, we’ll likely see a burst in companies.

Cloud companies are also worried about big time deals that come out of the social and mobile industries. Instagram sold to Facebook for $1 billion, which John Cowan, chief executive of 6fusion, believes spoils investor’s outlook on what a successful investment is.

“The Instagrams we like to read about because they’re great headlines…but that is the effective equivalent of the state lottery,” said Cowan in a panel at the CloudBeat conference. “It’s not something we should all bank on or that VCs should bank on. I think those are detrimental to the market.”

Cowan is also scared about the type of exits cloud companies may get: being sold for parts.

But before cloud investments can boom, some key areas of cloud still need more love. Platform as a a service, according to Mark Cox, founder of Appsecute, is a disruptive technology, but only a sliver of the market uses it because it’s difficult to deploy. Ease of use is often the barrier to entry for many new products, and if companies feel like they can’t integrate PaaS into their systems without eating up a bunch of resources, they’re not going to use it.

But Engine Yard says there’s hope for PaaS. The technology is changing and nearly 60 percent of companies Engine Yard surveyed plan on using PaaS in some way in their businesses.

Photo credit: Michael O’Donnell