Wednesday, January 1, 2014
Snapchat is a hugely popular mobile phone application that allows users to share photos and video in the style of a text-message. The service has gained a wide following among younger audiences and has received lucrative offers from Facebook which has been losing that particular market. Snapchat turned down Facebook’s offer in favor of higher offers and its investments now total $120 million in funding.
Growth with Modern Technology
What is unique about the success of Snapchat is its enormous growth without having to use the traditional avenues of a new business. The company’s co-founder and chief technical officer, Bobby Murphy admitted recently he’s “never owned a computer server.” The ability of companies like Snapchat to experience success without having their own data equipment is a major shift in the business world that can be attributed to the development of cloud computing. Everything moves much faster and servers can be set up in only a few minutes. Instead of owning their own computers, starting businesses can rent the data processing power they need over the internet through cloud services. In the past, young companies would need the knowledge and the capital to build complex data centers but now businesses like Snapchat can bypass those difficulties and get their company running quickly.
Working with Google
Snapchat is based out of Venice, California and began by working with a Google service that helps starting companies create applications. Their idea for the photo and video sharing application allowed them to be chosen by Google as an early customer of its cloud. Working with Google and using their servers helped Snapchat in avoiding spending a lot of money to support its users. Because of the help provided by Google’s cloud, the owners of the company never had to spend the capital on their own servers or data center. They were able to launch their service, watch its growing success and after less than two years as a company they received million dollar offers from big companies interested in investing.
The CEO of Snapchat is Evan Spiegel, a 23 year old graduate of Stanford who created the company alongside his classmate Bobby Murphy. They started with only a handful of employees which has grown into 30, still relatively small for the successful company. In only the past year the number of users sharing photos with Snapchat has expanded to double what it was in 2012. More recently, it has managed to expand past its central teen market to become popular in the mainstream. With the support of cloud services allowing Snapchat to get off the ground without too much spending, the company now has $60 million in capital that they will use to continue growth. They plan to use in-app purchases and effective advertising as a source of revenue for the currently free service. The growing interest in Snapchat has gotten the company almost to the point of rivaling Facebook and is predicted to become one of the most successful consumer applications to date.
Leo Hart is an expert in virtual machines and specializes in cloud hosting for Custom Cloud.