Using the Cloud to Design Your Startup Computing Infrastructure

Now that the wireframe is done for the startup, we are looking at the backend architecture for what we want to accomplish. The idea of using the cloud to cut down on costs is nothing new, and my new startup will be heavily leveraging Amazon Web Services (AWS) and Elastic Compute Cloud (EC2) to keep costs down, but provide a robust service to people who will be coming to visit the web site.

Below is a very simple diagram of using a combination of AWS, EC2 and Amazon Private Network to make the whole process as secure as possible. Of course the ports are not labeled, but communications between the head severs for the Internet will be doing SSL VPN communications back into the Amazon Private Network (which is a new service from Amazon that we are going to heavily leverage to keep customer data secure). The use of the Amazon virtual private network should help us keep customer data safer, and make it harder for hackers to find their way into the system. We are also going to have our administrative server inside the private network rather than running many connections to different servers in and out of the virtual private network. This should allow for the “jump box” style management that many system administrators are used to when dealing with protected network segments, and will allow us to tie down access to this critical system.

Rather than spending thousands on servers, we can save our money by using AWS and what it offers, and spend money in the smarter places for us, software development and advertising. The cloud is truly making this easier to set this startup up and keep costs much lower than I have ever had with a startup. We are looking at about 200 dollars a month in server systems on AWS, or 2400 a year. With our minimal budget that gives me about 10,000 to spend on software development off an open source package that we have identified as a good base place to start with what we want to build. The even better part is that much of what we need to customize around the software looks like we can get it directly from the development team, we won’t be writing custom modules on software we don’t fully know, rather we can pay the open source development team to write the modules, and provide something back to the open source community at the same time.

Given what we are looking at for custom software development, we can probably pull from there and drop money into the advertising budget. But waiting on the price quote from the software developers right now to see what the bottom line costs are going to be for six custom functions that we have deemed the software “must do” for what we need our system to do.

The planning stage of any startup is truly critical and how the startup sloshes money around between various planned budgets, a windfall in one budget means that there is money to put into budget line items that are falling short, or shore up other critical budget items like advertising the new site. What is interesting is that with our startup budget of 15,000 (minus what we have spent already), our burn rate is actually going to slow down because we intend (intentionally) to miss the holiday season. We want the year to scale and build brand recognition before we hit a holiday season. That will give us a year to shake out the AWS/EC2 Private network under many different conditions and holiday buying spurts before we hit the major holidays at the end of the year.

AWS is going to make this much easier and much more cost effective for us, if this was 5 years ago, our initial startup seed money of 15K would have been sucked up by servers alone with no money left over for development. If you are doing a startup and you are not using cloud computing, you are seriously missing an opportunity to save money, and have the room to scale later on if your company catches with the general public.