London's thriving cloud start-up scene

There's a sudden flourishing of cloud start-up talent in the UK. What's brought it about?
Written by Phil Wainewright, Contributor

A few years ago I would have had trouble naming more than a handful of UK-based cloud start-ups. Today there are several dozen that are very successful businesses, and I'm proud to be organising a EuroCloud UK event in London this Wednesday at which the CEOs of several will be speaking (see disclosure). The cast includes Alastair Mitchell, CEO of cloud collaboration vendor Huddle, which triples its revenues every year and is growing its large enterprise business even faster. There's Duane Jackson, founder and CEO of KashFlow, the small business accounting vendor that's encroaching on the home turf of incumbent giant Sage. Tim Barker, CMO of social data start-up Datasift, sold his previous business Koral to Salesforce.com. Completing this multi-faceted line-up is Piers Linney of cloud hosting and mobile telecoms provider Outsourcery, Jimmy Gasteen from cloud IT project management provider Precursive and Index Ventures' Bernard Dalle.

Why is there suddenly such a flourishing of cloud start-up talent in the UK? I think there are a number of reasons, some of them unique to Britain and others that are evident elsewhere too:

  • Second-generation funding. We've had a first generation of successes in Europe, most notably Skype and MessageLabs, whose founders have become active investors in new start-ups. There are also several European VCs who've built up a lot of experience through and since the first dot-com boom. Finally, some of the larger US-based VCs have become more international in outlook.
  • Second-generation founders. You'll hear plenty of Brit accents if you spend any time in Silicon Valley or downtown San Francisco. Most of them stay, but some choose to return home and put their experience to work in new UK ventures.
  • Start-up culture. There's been a seachange in Britain's culture over the past thirty years. Although we probably as a nation still suffer from too much envy, cynicism and understatement than we should, there's far more entrepreneurial spirit in Britain today than ever before in my lifetime.
  • Addressable markets. As the home of the English language, the UK is at the nexus of many English-speaking markets around the world. The cloud collapses distance and brings all those markets to Britain's doorstep. UK-based entrepreneurs are taking advance of that to expand internationally very rapidly. Though the flipside is that they face greater competition at home because this is a two-way flow and the UK is a pretty big market in its own right.
  • The Tech City effect. All of the above have brought Tech City into existence. It hasn't caused any of it. But now that it's there, it's going to help amplify the growth of start-ups because people thrive more as part of a community. Yesterday I strolled around Shoreditch, starting with a meeting at Huddle, then visiting Google Campus to check out the layout for tomorrow's event, finishing up with a roundtable discussion at the Hoxton Hotel that had been organised by Zuora (who, along with Equinix, are sponsoring the EuroCloud event). Each location was just five minutes' walk from the other and that proximity is an experience I've only ever seen before around Brannan in San Francisco or in New York's Silicon Alley. It's a further sign of the change that's taking place.

There are a few places still left at tomorrow's event if you feel like getting a taste of London's cloud start-up spirit, but registration closes in the next few hours.

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