Hosting On The Cloud: Inputs For Early Stage Startups

I recently came across this post on Quora that talks about various hosting options for Indian startups and found it very informational - http://b.qr.ae/IndianStartups-HostingOptions. Many early stage startups are faced with the question of where to host especially as they get off the ground. Key questions they have are: what are my hosting options, costs involved, what other aspects should I consider and what are other Indian startups doing? I have tried to collect data to answer some of these questions. This is particularly aimed at startups that are just getting off the ground (very early stage) and not for ones trying to optimize performance/cost.

Note: The intention of the article is to help early stage Internet startups get quickly off the ground using hosting services. Inputs regarding various services mentioned in the article should not be considered as an endorsement by the author or the organization he is associated with.

Comparison of various hosting options

Here’s a quick summary of comparison between various hosting options (both in India and the US) for an early stage startup. Please note that these are just off the shelf monthly prizes (based on assumptions of usage as outlined in the table) that we could get either from the web or by calling the company. Obviously rates would change based on your particular requirements as well as your ability to get discounts such as yearly subscription, etc.

Key takeaways:

• Amazon’s AWS offers the most cost-competitive option (at least for the configuration mentioned).
• If you are focused on hosting in India (particularly for latency reasons) E2E seems to have a reasonably priced offering. I haven’t been able to talk to someone hosted on E2E and hence don’t have too much information on them.
• If you go with AWS and want to improve your performance, you can refer to the Quora post referred above that talks about using Cloudfront (CDN) for optimizing latency as well as hosting non-latency sensitive workloads in the US and latency sensitive workloads in AWS Asia (APAC).

Getting off the ground

If you are just getting off the ground as a startup, your easiest bet might be to go with a cloud based provider. The costs for setting up are not high and it is also scalable (elastic) depending on the demand (which is usually tough to predict in advance). In addition, some of these services (e.g. Amazon, Rackspace, E2E) are quite granular and so you can pick and choose configurations that work best for you (computing, storage, bandwidth, etc.). One caveat I gathered from talking to startups is that you need to have someone on your team who understands configuring these options. For example, if you are going with Amazon’s AWS, you need someone who understands and preferably has worked on it before. In particular, you need someone who understands the components of your application, various pieces of the AWS system (EC2, EBS, S3, CloudFront, etc.) and failure points so as to mitigate and avoid data loss. Don’t get me wrong, this is not very hard to configure and get going. But, it still is not trivial to take for granted and that is why the startups I spoke to recommended having a person familiar with the setup onboard. Alternately, you could start with an option that provides a simpler holistic solution (e.g. SliceHost) albeit at a slightly higher cost. You could then graduate to one of the other cloud providers at a later point on a need to basis.

Where are startups hosted?

And finally, you might wonder what other startups in your similar shoes (or ones that are further along) doing? I polled close to a dozen startups (small but good group of tech savvy startups) and 80% of them are hosting in the US. Of those, one third are hosted on Amazon’s AWS. If you are in a startup that has gone through a similar exercise of picking a hosting provider, would love to hear from you on what your experiences have been and any tips for others who might follow your footsteps?

Anand Daniel is a seed/early stage venture investor with Accel Partners (accel.com). He was previously an early stage investor with Boston based Flybridge Capital Partners and corporate VC firm Intel Capital. He blogs about his experience moving back to India and being an early stage VC in India at www.ananddaniel.com