Who uses cloud computing? Startups do, VCs don’t

Cloud computing is a trendy term right now, but how widely is it actually used? During the venture capital panel at today’s Structure 09 conference in San Francisco, VCs offered two pieces of anecdotal data that create a nice contrast between who is and isn’t on the cloud.

First up were the VCs. Moderator Paul Kedrosky (a former VC himself) asked the panelists if their firms use cloud computing — i.e., if they run their software and store their data remotely, on another company’s infrastructure. Only a few VCs raised their hands, and even then it was only half-hearted (presumably because they use a few cloud services, and but do most of their work on traditional software and IT) — and keep in mind these are VCs who have invested in cloud computing startups. When Kedrosky asked why, the panelists repeated many of the common reservations about the cloud.

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“We do have a lot of confidential information,” said Accel‘s Ping Li. “There is fear of data leakage.”

On the other hand, when asked about whether there’s data showing real cloud adoption, Benchmark‘s Peter Fenton offered the startups that Benchmark has invested in as evidence. Every company in Benchmark’s portfolio uses Amazon’s cloud infrastructure in some way, and about one-third of them operate entirely on web-based services and infrastructure. Billing startup Zuora, for example, is doing well despite having “not a single IT guy, not a one,” Fenton said —  and that’s more meaningful than an analyst’s report.

“By the time Forrester’s got a report in a category, we better be long gone,” he said.

[photo:flickr/akakumo]