The cloud computing benefit most often cited is IT’s reduced cost of ownership, because a company can convert fixed IT costs into variable spend for 60-80% of the budget that is used to “keep the lights on.” The total cost of IT as a percent of revenue is reduced, and that savings can be re-invested to grow the business.
While the IT savings is compelling, the strongest benefit of cloud computing is how it enhances business agility – especially how the cloud can help launch entirely new businesses with little to no up-front capital.
And when cloud computing helps launch businesses focused on improving the greater social good—cloud computing can help change the world.
In Silicon Valley where technology innovation and venture capital come together, San Francisco is a pioneer in building collaboration between social entrepreneurs and impact investors to foster global social change.
And the initiatives to launch socially responsible new businesses are being vastly accelerated by cloud computing.
Impact investing is an emerging asset class in which investors actively apply capital to businesses that generate both social or environmental benefit and profit. Proponents believe that impact investing could add the necessary impetus to philanthropy and government to better address social challenges on a grand scale.
According to JP Morgan’s 29 Nov 2010 Impact Investments Report, the amount of capital selectively invested in businesses that address housing, rural water delivery, maternal health, primary education and financial services to support those earning less than $3000 per year, could reach $400 billion–$1 trillion over the next 10 years and yield a profit of $183–$667 billion.
How does cloud computing benefit impact investing and socially responsible startups?
The Hub in San Francisco is a community meeting place where “purpose-driven people … connect and build solutions for a better world.” Members are social entrepreneurs who work, collaborate, prototype, test new products, refine business plans, access funding and sponsorship, launch marketing campaigns and new ventures … all in a creative, collaborative community.
And many of the Hub’s venture companies access cloud computing to launch new businesses that tackle a myriad of social challenges.
As Hub Ventures co-founder Wes Selke explains, “We believe in the power of technology innovation to change the world for the better, and cloud computing is an excellent example. The cloud enables world-changing entrepreneurs to build and scale their companies faster than ever before and to create significant impact with limited resources.”
One Hub startup called MobileWorks is “building a sustainable crowdsourcing platform that lets underemployed individuals throughout the world earn a fair wage completing crowdsourcing jobs.”
MobileWorks has developed a mobile web application to allow low income device users in seven countries execute simple data entry tasks, web research, content creation and more on a project basis to supplement their income. Individuals using mobile phones, tablets and even PCs in cyber-cafes, become part of an ad hoc collective workforce whose aggregate services are marketed to large corporations, organizations, and individuals in the west.
Data entry tasks are delivered to each mobile device by the mobile web, and MobileWorks handles the end-to-end work distribution, guarantee of accuracy, and employee payment. With this creative model replacing the costly overhead of traditional business process outsourcing, workers are assured a higher wage.
According to co-founder Anand Kulkarni, MobileWorks was launched with essentially zero capital because of free cloud computing services that allowed them to “build and serve their web application for free.” This was especially advantageous because it allowed them to deploy their software to users in developing nations that lacked the technology infrastructure needed to deliver work for employers located on the opposite side of the world.
MobileWorks is a superb example of how the mobile/cloud computing model, when applied to connect people and work in creative ways, can completely reshape how technology is used for both profit and social good in a way that costs next to nothing to get started.
Another example of how cloud computing is helping to launch socially conscious business is Cloud Currencies. Cloud Currencies offers community rewards for local merchants and earned donations for favorite non-profits. Participation is simple and requires only that an individual register any credit or debit card to the Cloud Currencies web-based Open Loop Loyalty Rewards Technology Platform. Participating consumers will also accrue local currency credits at their favorite participating markets. It’s a community win for all.
Cloud Currencies acts as a catalyst for local economic development, because it incents consumer loyalty to local merchants by generating donations for selected non-profits with every purchase. The revenue impact can strengthen the local economy, resulting in more jobs and increased tax revenue for localschools and other services.
Cloud computing as the next IT wave has significantly reduced the cost of launching any new business venture. The number of Software-as-a-Service applications available today for managing business functions like finance, HR and more can help startups better handle rapid growth. Infrastructure-as-a-Service and Platform-as-a-Service offerings can also provide quick, low-cost access to data center resources for software development and prototyping.
And, when a startup venture is focused on solving social and environmental problems, cloud computing becomes an even more powerful accelerator for how technology can help drive global change — in a socially conscious andprofitable way.
Follow Jacqueline at Twitter @JacquelnVanacekComments