How to stand out in that start-up crowd, with cloud

What are those three things that any angel investor, start-up tycoon or venture capitalist would sniff for in a strong contender? Promise, promise and promise.

The possibility of a raw idea turning into an invincible entrepreneur story has always tempted smart and visionary financial-support sleuths.

And more often than not, they are always hawk-eyed enough to detect that one small line that differentiates winners from ‘me-too’s – the ability to withstand bumps on the road. These bumps come in many shades and variety – they can be about scalability, addressing the right customer gaps, flexibility, feasibility, resiliency, stability, value chain dynamics and ecosystem strengths.

Believe it or not, but today, the hot steam of technology is able to iron out almost all such bumps with wonderful finesse and timeliness. That’s why it is understandable that VCs or finance moghuls are desperately looking for business ideas that treat technology, and specially new-age forms like Cloud or mobility, as a staple rather than a stale afterthought.

Consider why the latest annual Global Venture Capital Confidence survey pointed out that investors are increasingly interested in pumping in money for technology companies.

The feeling that venture capital investor confidence is going northwards is no coincidence when we see how they are putting the tech world in the spotlight, as gauged in a survey by the National Venture Capital Association and Deloitte.

The Global Venture Capital Confidence survey indicated that investors are increasingly being drawn to top categories in the tech industry. This bracket comprises of cloud computing, mobile tech, and robotics and this is where noticeable excitement and attention is galvanizing these days.

Look at the 300 venture capitalists studied across the globe, asked about their confidence on global investments and certain markets and industries; and you can’t miss that one category that won the highest global investor confidence was cloud computing, raking in a stupendous 4.11 ranking on a scale of 1 to 5. Experts have attributed this appeal to its tendency to require less capital to build and hence the relevance and magnetism as a stable, scalable business model based on re-usable license etc.

Not only Cloud, but entities like enterprise software, consumer software, new media/social networking, and robotics reiterate how six of the top seven categories were in tech genre and thus remind that investors are serious when they talk business and technology intersections.

In the last few years, infrastructure has kept coming up as a moot point for VCs and the ability of Cloud to provide a rigorous, comparable yet affordable foundation for a start-up is gaining momentum.

VC names from firms like Redpoint Ventures, Andreessen Horowitz, Accel Big Data Fund etc have been reported to be on the watch-out for handpicking entrepreneurs who can leverage Cloud and technology with savoir faire and with enough breadth and depth.

Lot of major VC firms can be easily sliced to throw open a remarkable portfolio of cloud companies under their belt and early stage VC firms like Illuminate Ventures have not minced any words when they articulate their focus to be specifically on enterprise cloud computing and companies that drive business results as well as the strengths to bring unique solutions to the market, not just from a technology perspective, but from a business model and customer segment view too.

Those who can engage today’s tech consumerisation market with ease and poise and at the same time tap analytics smartly, optimize sales and marketing efforts using cloud-based solutions, would pop up discreetly amidst hordes of other ‘also-ran’s.

No doubt then that suddenly a fresh range of vertical industry cloud solutions that are capital efficient, align a specific industry’s customer needs and are being supported with the cloud spine, are emerging fast and furiously. As experts have noticed, vertical ideas instead of horizontal solutions are usurping the top market shares. May be because, in the latter case, even if one is the leader, it sizes up to some 5-10% of the market leaving the rest of the growth to expansion. But in the former case, one can immediately escalate as the industry standard and expansion occurs by selling more solutions to the same customer segment.

The market is also rife with developers who are on the look-out or new models to build applications and leave the headaches of infrastructure etc to someone more focused – like a platform-as-a-service start-up.

A recent Cloud Computing Index from an expert at Bessemer Venture Partners unearthed that public cloud companies are now worth $100 billion, with the application side of the market going liquid first, and most IPOs ripping out from software-as-a-service (SaaS) companies and soon from PaaS side of the action.

As per a reckoning by North Bridge Venture Partners on the future of cloud computing, enterprises of all sizes are migrating to the cloud, and the greatest opportunities are for companies developing services to support this trend while one can clearly see that cloud services will be completely integrated into the business process and as its expert underlines – firms would be  outsourcing, or out servicing, everything they aren’t uniquely good at, leveraging cloud’s unique vantage point to access and knit together services.

The other survey by National Venture Capital Association was not far behind in echoing that cloud-based tools and services that enhance business operations will play an increasingly significant role as small business and not just enterprises make a shift towards the cloud.

It’s up to you now, whether you are washed ashore by this tide or if you can surf upon it to our advantage.