Out of the dozen companies featured in our hot cloud computing startup list, most have received less than $10 million in VC funding. Part of the reality, Sonsini says, is that it simply takes less money to start a company now because entrepreneurs can leverage cloud resources.
Milind Gadekar, whose startup CloudOn has raised about $26 million, says a decade ago he would have needed nearly double the amount of money to start his company. By leveraging Amazon Web Services' cloud, CloudOn has not needed to buy back-end infrastructure to support the company, which makes an application for accessing Microsoft Office tools on mobile devices. Other companies are bootstrapping the operations themselves. OneOps, for example, aims to make application development and deployment easier, and the three former eBay engineers that started it have invested their own money in the project for starters.
Sonsini says after the Internet bubble of the early 2000s the VC community got too inflated with lots of new investors coming into the market and throwing around a lot of money. The contraction of recent years has somewhat right-sized the market to a level where he believes there are an appropriate amount of startups being funded to not saturate the market, but to still allow promising ideas to flourish. We'll see just which ones make it big in the cloud computing realm.