Beware of the Cloud bearing gifts. Should we trust Cloud start-ups?

Every year I hear at least 10 announcements of a new iPhone killer, but Apple still prospers. People do not even remember most of the brands that looked very promising and even managed to attract a lot of of investors’ money.
We live in an amazing time when every day new services come out on the market. At the beginning of my career on the national market a client could find just about 10 ERP solutions and had to adapt its business and processes to one of them. Nowadays, there are systems for taxi-providers, for plumbers, for doctors, for armed security, you name it!
The market has become global, everything has gone Cloud, and it seems that new start-ups develop yet another service as soon as an uncovered niche is identified. They do not need years to develop international distribution, they do not have to establish local technical support, in most cases they do not need any local licenses and permits. Thanks to technical (Cloud) revolution, the applications developers have obtained unbelievable opportunities to reach their customers directly and cut a piece of the market from an existing player. As a result, new start-ups raise solid budgets. Only in Russia, there are 3 (!) only state-owned! funds that provide money to support a more or less reasonable idea, so every month a new Cloud solution comes out on market.
But if somebody gets more, others have to lose. If these new companies are taking customers’ money, the companies that they had worked with before will get less. Of course, the total market is growing but first of all, new comers eat budgets that originally were planned to be eaten by existing players on the market. The general ERP solution loses market to a specific solution for Transportation industry, but in one year this Transportation solution will lose to more specific ones for Taxis and Trams. New money from investors compete with even newer money from the same investor or other investors one year later. As a result, most start-ups do not live long, or even if they manage to survive they cannot keep investing into their niche solutions as much as they promised and actually did at the beginning.
So, even if a company finds a good solution that matches their specific business needs, maybe it should study carefully not the solution itself, but also at the provider before starting the migration process.
· How long has the provider been on the market?
· How much progress has been made in the last three years (was it a one-time investment in a start-up or consistent development)?
· Do they have an extensive client base to keep developing without start-up investments?
In most cases implementation of Cloud services requires solid resources from clients. Besides direct migration costs, they need to change their business processes, re-setup workflow, train employees and so on. So, a wrong choice is more expensive than just a cost of service.
We tend to see new start-ups as future Microsoft and Google that will change the world and want to be a part of their success at least as a customer. But when Bill Gates and Sergey Brin started growing rapidly, they took share from companies that were considered not less promising some years ago. So, let me wish best of luck to all start-ups but I will not recommend clients to switch blindly to their services too fast.