Drexel professor says demand for cloud services is ‘exploding’

When nonprofits weigh grant applications, the requisite process to choose grantees can often be cumbersome.

Materials might arrive through different channels — the proposal through a web form, recommendations by email, pictures through Dropbox, perhaps a video of the applicant’s good works. Then all that information has to get consolidated and transmitted to reviewers, who might need to consult with each other. Finally, the decision has to be conveyed to the winner and progress reports arranged.

“It’s lots of moving parts with lots of different constituents,” said Carl Guarino, CEO of Conshohocken-based WizeHive, a software enterprise that made the Philadelphia 100 list of privately held, fastest-growing companies in the region. “It also leads to a pretty fragmented process.”

What’s an organization to do? There’s cloud-based software for that. WizeHive, which focuses mostly on nonprofits, universities, and government agencies, touts its Zengine, introduced in 2014, as a soups-to-nuts grant and scholarship management platform — one that succeeds in good part because of its home in the cloud, argues Guarino.

Cloud services are riding high. In 2018, the size of a market comprised of infrastructure, platforms, and software was $272 billion — a number expected to more than double by 2023 to $623 billion, according to research company ReportLinker. Among the Philly100 fastest-growing tech companies in the region, several offer services to help organizations migrate to cloud-based systems (Kapital Data Corp. in Langhorne and Jade Global Inc., whose East Coast operations are based in North Wales, for example) or provide a platform on the cloud for specific services (WizeHive, for one).

“We’re seeing tremendous growth in cloud services,” said Murugan Anandarajan, who heads the Department of Decision Sciences and MIS at Drexel University’s LeBow College of Business. “It’s exploding.”

The term “the cloud” — which essentially means storing and accessing data and all manner of programs over the internet rather than from an on-premise computer’s hard drive — dates to the days of flowchart presentations, when the big ol’ server was represented “as nothing but a puffy, white cumulus cloud, accepting connections and doling out information as it floats,” according to PCMag.

What’s driving the popularity of the cloud, and by extension, cloud services?

One factor is its elasticity. “The cloud is loads and loads of different computers linked together through the internet,” said Anandarajan, also a Drexel professor of management information systems. Providers include Google and pioneer Amazon Web Services (AWS). “People subscribe to those services, access computing power, and pay for what they use. It’s like a utility.”

At WizeHive, interest in AWS-hosted Zengine among government and university clients is driving exciting growth, Guarino said, noting that the 10-year-old company recently surpassed $5 million in revenue and expects to grow about 38% this year.

“The cloud is especially important for processes that touch lots of constituents, and you need to connect them,” he said, adding that clients include the Bill & Melinda Gates Foundation, corporate scholarship programs, small nonprofits, and colleges. “The cloud allows everyone to access the same platform, even though they have their own devices.”

Within cloud services, middlemen are in high demand. Those are the folks who can serve as guides as organizations migrate to the cloud, Anandarajan points out.

Kapital is one such company, helping primarily public-sector clients find experts in cloud deployment for HR functions. From 2016 to 2018, the 14-person company’s revenue has grown from $800,000 to nearly $5 million, according to founder and CEO Kumar Mangala.

When Kapital started in 2015, it worked mainly with clients who had on-premise software needs, but its real growth has occurred in recent months as many of those clients are moving HR functions to the cloud, Mangala said. By 2020, he expects to more than double revenue because of the appeal of the cloud, especially among government agencies.

“Cloud is about humanizing application software so that it is super easy to use,” said Mangala, who added that the cost of operating cloud-based software is significantly lower for organizations. “Cloud applications are going to be the way of the future.”

Likewise, 16-year-old IT services company Jade attributes its projected revenue growth of 30% for this year to its cloud services.

“Ten years ago, we had zero cloud business,” said Karan Yaramada, founder and CEO of Jade, which is headquartered in San Jose, Calif. “Today, 60% or more of our business comes from cloud business.” That includes cloud migration, integration, and infrastructure management for clients such as technology companies (Twitter and Facebook), retailers and financial services, and insurance companies.

Jade also makes sure its clients take a hard look at security — though, like others, Yaramada argues that the cloud is safer than on-premise systems. “Do I trust my $100 million company with my own data center, or do I trust Amazon to invest and safeguard my data?” he said, siding with the latter.

Yaramada expects more and more businesses and organizations to join the cloud. In an hour, he notes, an entrepreneur can start a company, accessing IT infrastructure, software, development tools, anything really, on-demand from the cloud — all for a price tag that does not require huge up-front capital.

“The cloud,” he said, “has changed everything.”