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Posted: 5/18/2012
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LiquidSpace Startup Avoids $750,000 in First-Year Costs; Minimizes Time Needed for IT Management

LiquidSpace ran a proof of concept on Amazon—from which it learned that going into production on that platform would require an unaffordable full-time IT manager. So, the startup turned to Windows Azure for cloud computing, a fully managed platform as a service. LiquidSpace saves time and money, which it reinvests in product development—an investment that’s turbocharging its growth.

Business Needs
Most people know that if you try to do something at which many others have failed, you’re not any more likely to succeed than they were. Entrepreneurs know better.

It was with that startup spirit that Mark Gilbreath saw a market opportunity where others saw only challenges. In March 2010, they founded LiquidSpace to capitalize on it.

That opportunity is based on the rapidly swelling ranks of mobile professionals and the new needs they bring to the marketplace. Many are entrepreneurs themselves; others are managers or executives at their companies. Either way, one thing that almost all mobile workers need is a place to work—a place besides their primary places of business (which, often, are their primary places of residence as well).

Maybe it’s a quiet space to work for an hour between meetings (good luck with that coffee shop). Maybe it’s a conference room for a day-long meeting with a dozen clients. Maybe it’s a fully furnished and staffed office space for a week while working for an out-of-town client.

Facilities listings services exist. but many of them represent only a single building or building management group. Or they’re not location-based, or not accessible to mobile workers.

The genius of LiquidSpace was to link broad-based lists of facilities in any given area with mobile workers who are in that area at the moment when they decide they need a space. Then, it makes the search, booking, and even check-in processes for those facilities quick and seamless.

LiquidSpace gave itself just one month to stand up a proof of concept, given the rapidly moving and highly competitive startup space and the need to attract investor funding as soon as possible.

* We’re a startup; we were cash-strapped. Microsoft delivered a clear economic benefit—in the short run, we developed for free. We got off the ground quickly, at no cost. *

Craig Knighton
Vice President of Product Development and Technology Operations, LiquidSpace

“We chose to develop in Microsoft technologies because we were most familiar with them, and because we knew they’d be the fastest way to get to a good prototype,” says Craig Knighton, Vice President of Product Development and Technology Operations.

To stand up that proof of concept equally quickly, LiquidSpace decided to host it on the Amazon Elastic Compute Cloud (EC2) platform. The proof of concept was successful enough to win venture capital funding for the company. Next stop: building out the solution to go live with a public beta. That put the choices for the application technology and the hosting platform back into play.

In the startup space, it’s common to go with Linux because open source looks like it’s cheap, even free. Regarding hosting, LiquidSpace had learned some tough lessons. With Amazon, it had to manage its cloud-based network infrastructure and update the server operating system software on its own. And it would have had to hire an IT manager—burning through about US$125,000 of its venture funding each year—to tend it all. That was out of the question. Building and staffing its own datacenter would have been even more expensive.

Knighton and his colleagues looked at Google Apps—which they dismissed because of the need to learn a new system—and the Windows Azure cloud-computing environment from Microsoft. With Windows Azure, LiquidSpace would get not only an infrastructure as a service, as it did with Amazon, but a complete, fully managed platform as a service.

“A lot of startups choose MySQL on Amazon,” says Knighton. “But when we added management costs to the equation, we found SQL Server on Windows Azure was cheaper. Microsoft has completely changed the economics of the cloud.”

And those economics got even better when LiquidSpace joined Microsoft BizSpark, a global program that helps software startups with access to Microsoft software and tools, industry investors and incubators, and marketing visibility.

Time is money, as the old saying goes. LiquidSpace saves both with Windows Azure and BizSpark.

Avoids $750,000 in First-Year Expenses
Had it chosen to build and staff a datacenter, LiquidSpace would likely have spent about US$250,000 on hardware and software licensing, and another $500,000 in annual staffing, for a total first-year expense of $750,000. A year on Amazon EC2, plus at least one technician to manage the infrastructure, would have been about $100,000.

In contrast, as a BizSpark member, LiquidSpace received no-cost and discounted licenses for Windows Azure, plus no-cost licenses for tools and production-use server software. And it avoided dedicated IT staffing costs.

Knighton estimates that LiquidSpace saved about $90,000 in first-year expenses—90 percent—compared to Amazon.

“We’re a startup; we were cash-strapped,” says Knighton. “Microsoft delivered a clear economic benefit—in the short run, we developed for free. We got off the ground quickly, at no cost. Microsoft took the cost of hosting completely off the table.”

Minimizes Time Needed for IT
Money isn’t the only thing that LiquidSpace saves with Windows Azure and BizSpark. It also saves the next best thing: time. Knighton says that instead of needing a full-time IT manager, he manages the Windows Azure environment with just 5 percent of his time.

“When we adopted Microsoft tools, we automatically adopted Microsoft best practices for managing deployment to a farm,” says Knighton. “We didn’t have to take the time or trouble to engineer these processes for ourselves. For startups like us, which are always pressed for time, that’s a real help.”

For information about other Microsoft startup successes, and how you can join them, go to:

Solution Overview

Organization Size: 15 employees

Organization Profile

LiquidSpace connects people seeking workspaces with venues that have space to share, including high-end business centers, hip startup co-working spaces, hotels, and private spaces.

Software and Services
  • Microsoft Visual Studio 2010
  • Microsoft ASP.NET
  • Microsoft Azure

Vertical Industries
Other Services

United States

Business Need
Cloud & Server Platform