Thanks to the cloud, startups have more affordable access to IT resources. This allows new businesses to “hyper-bootstrap.” An entrepreneur, for instance, can connect quickly and more economically to customers and suppliers around the globe through the cloud and thereby realize enormous operational efficiencies. This, in turn, allows startups to deliver innovative solutions faster to the market and to compete and win against much larger rivals.

Here are six ways that startups can hyper-bootstrap using cloud services:

1. Lower Startup Costs – By renting IT services, startups avoid the CapEx (capital expenditures) associated with compute/storage/networking hardware, and reduce OpEx (operating expenses) related to IT staff and maintenance.

2. Communication and Collaboration – Cloud services, like email and conferencing, allow startups to keep in closer touch with their employees, suppliers, and customers via any device cost-effectively.

3. Rapid Product Development – ISVs, for example, harness cloud services on-demand for scale-up/scale-down agility, performance, and lower cost.

4. Speed to Market – Cloud services allow startups to target customers more quickly and meet customer requirements more effectively.

5. Global Market Penetration – Cloud services allow startups to access global markets and take advantage of the explosive growth occurring in developing economies.

6. Increased Productivity – Cloud services deliver economical, pay-as-you-grow application software. Startups pay as their business grows, perhaps on a monthly basis, for SaaS-based productivity applications, including ERP, HRM, CRM, expense management, and secure data backup.

For more anecdotes, please check out Joe McKendrick’s recent article in Forbes:  How Cloud Computing is Fueling the Next Startup Boom.

We’d like to hear from you. What do you see as differences between traditional ISV service and SaaS? Do you see many ISVs seriously considering SaaS as a business model? We look forward to your comments (below).