Are startups and enterprises better together?

Australian startups are receiving increased attention from corporate enterprises, according to entrepreneurs at the York Butter Factory co-working space in Melbourne.

At a panel this week for the release of IBM’s Born on the Cloud white paper, the co-founder of York Butter Factory and the heads of two startups also spoke about how cloud computing has fuelled a recent rise of tech startups.

Startups and enterprises make sense together, said Stuart Richardson, co-founder of the York Butter Factory. Startups need money, customers and access to markets, which the enterprise can provide in exchange for a low-risk way to innovate, he said.

“The cost to [corporates] to actually experiment alongside a startup is extraordinarily low,” he said. “So they can actually contain the balance sheet, contain the brand risk … and unlock value in quite a controlled way.”

Ash Conway, founder of Bugwolf, said that while initially he pitched his startup’s beta-testing services to large enterprises, more and more corporates are coming to him.

“I’ve actually started seeing a lot more support in the last 12 months in terms of large enterprises really wanting to work with us [to] drive innovation, improve efficiency and drive down costs,” he said.

A growing number of big Australian companies have been seeking partnerships with startups to stay innovative. Several major Australian enterprises are partnering with startups or running startup accelerator initiatives, including ANZ Bank (Innovyz), Optus (Innov8 Seed), and Telstra (muru-D).

The emergence of cloud computing has played an integral part in the explosion of the startup scene in the past few years, according to Duncan Macneil, founder of a Cartesian Creative, a startup that provides user experience consulting services.

“Unlike any time in history, it’s easy to pick up a laptop and start.”

Cloud is the only way for startups to get up and running, he said. “It’s the canvas on which we paint … It’s foundational.”

Conway concurred, saying that the cloud has been critical for Bugwolf to grow its business and meet the demands of customers.

Richardson said the cloud enables “unconstrained thinking,” a benefit identified in the IBM paper.

“The ability to rapidly experiment on a low-risk or a low-cost basis has been fundamental to the acceleration of change,” said Richardson.

“If you can experiment, you can actually learn, and then through that learning you can actually escalate and your infrastructure is able to grow with you.”

Adam Bender flew to Melbourne as a guest of IBM.

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

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