Cloud computing seems like a safe bet. I mean, any startup or existing company that does cloud computing and needs capital must provide a great returns for investors, right? Maybe not.
A wise venture capitalist once told me that those in the venture capital community move like flocks of birds. When they see the others moving in a certain direction, they all seem to follow. Cloud computing is another instance of that behavior. And if VCs and investors are naïve about cloud computing, IT will face business pressures to use cloud computing based on that naïveté, creating serious issues down the line.
The trouble is that cloud computing is both ill-defined and broadly defined. There is a lot of confusion about what's real cloud computing and what is not. I have to admit that I spend a good deal of my day trying to figure that out as well.
What are the top three mistakes that VCs and other investors will make as they move into the cloud computing space?
Cloud computing investor mistake No. 1: Assume a sustainable business model