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Innovation isn’t dead, it just moved to the cloud

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According to some doomsayers — such as engineering professor and entrepreneur Steve Blank in a recent interview with The Atlantic — innovation is dead and Silicon Valley is just a muck pond full of VC money where social media companies breed and reproduce like mosquitoes. They’re partially right, of course, but they’re also missing the bigger picture. Much of Silicon Valley’s most-innovative efforts might be coming out of Google (s goog) and Elon Musk’s mind, as Blank says, but cloud computing has made innovation something anyone can do.

Todd Hoff of High Scalability took up for today’s startups against Blank in a post on Monday detailing Pinterest’s phenomal growth and growing Amazon Web Services-based infrastructure. Here’s what he had to say to the naysayers:

While it’s true that both Pinterest and Instagram are not making great advances in science and technology, that is more indicator of the easy power of today’s commodity environments rather than a sign of Silicon Valley’s lack of innovation. The numbers are so huge and the valuations are so high we naturally want some sort of fundamental technological revolution to underlie their growth. The revolution is more subtle. It really is just that easy to attain such growth these days, if you can execute on the right idea. Get used to it.

What Hoff didn’t say by name, but surely meant, is that cloud computing has changed the name of the game. Yeah, there are a lot of Instagrams and Pinterests out there, but there are also companies such as DNAnexus and Bina Technologies that are using the cloud (combined with the advent of big data technologies) as a platform for revolutionizing genomic research.  It’s just an iPhone (s aapl) app, but Romanian startup SkinScan is trying to alert users to potentially cancerous moles. This trend is only getting started as cloud infrastructure gets more powerful and entrepreneurs begin to fully understand what’s possible if they take advantage of it.

Somewhere in between Pinterest and biotech, startups are using the cloud to make enterprise software available as a service and disrupt the business models of the very companies that helped build Silicon Valley.

Even if social media companies do dominate the startup landscape, they’re part of a fundamental change in the way mankind communicates with each other thanks to cloud-based computing resources and the ubiquity of powerful mobile devices. I would argue Facebook is a very big idea — and an engineering marvel in terms of its infrastructure — and surrounding startups are part of an evolving ecosystem. It’s not trying to cure cancer, but it’s still rather profound.

And if you’re trying to make money, who wouldn’t make a small bet on a business that can scale like crazy overnight in terms of both users and infrastructure? One might argue it’s smart investments in companies such as Pinterest and Instagram that help bankroll longer-term investments in the big-idea startups, which are still around, by the way.

We have startups such as Calxeda, SeaMicro (now part of AMD (s amd)) and Tilera trying to revolutionize chips, and we have a bunch of so-called “phat startups” — especially in cleantech — undertaking the types of efforts Blank says are dwindling. I recently covered a startup called Skybox that raised $70 million to build and launch satellites, and will then analyze the the continuous stream of high-resolution images they send back.

We’ll talk a lot about infrastructure and platforms at our upcoming Structure conference, because it’s the underpinning for this new ecosystem of applications that resides on top of it. Those apps range from the mundane to the revolutionary, but there’s a whole lot of innovation to come as the world gets a better sense of what’s possible in an always-on and interconnected world. I wouldn’t call that a small idea.

Image courtesy of Shutterstock user Mishchenko Mikhail.

7 Responses to “Innovation isn’t dead, it just moved to the cloud”

  1. Farid El Baraka

    The Cloud is bringing a major change in how startups innovate. We are moving from the historical silicon/chip focused innovation to a Cloud focused innovation. For example, if you look at what’s going on in the networking space of the Cloud. Startups like Nicira, Big Switch, ContextReam or Lyatiss are grabbing a lot of VC money to disrupt a company like Cisco. Social Media is capturing a lot of attention right now but the Cloud and Software-defined Networking are the most exciting things happening in our industry.

  2. guest

    What year is it? Was it 2009 and I just feel asleep? oy. I thik when i do a startup, I might use cheap infrastructure. Now somebody give me 5 million dollars.

  3. Shaleen Shah

    You know what’s funny about this post – the use of two overrated terms: innovation and the cloud. Yet, like you, I think many are missing a bigger picture here. There are still plenty of myths to debunk concerning the cloud and we might as yet to come up with a better definition of innovation. For me, something innovative is as simple as making a difference in my life, no matter how small or big the impact is.

    • Mr. Ketter

      I like your comment Shaleen. Innovation is actually by definition “pushing something forward”. When companies rehash and reuse old technology in the same boring way, they need to stop using the word innovation. When companies use Facebook’s API just to do something that Facebook already does, they need to stop using the word innovation. When companies bring to market another product that “stores things in the cloud”……well you get the point. But if it means the difference between working at StarYucks and a billion dollars, I will even call hammer pants innovative.

  4. Paul Calento

    The idea that cloud can do the heavy lifting, while a team focuses on business model and/or business process innovation is compelling to start-up and established company alike. As a company’s definition of the cloud gets larger, say incorporating services and data in both the public cloud and private cloud, the possibilities of what you can potentially do in this new, larger, converged cloud environment is compelling. Perhaps the greatest benefit is the approach allows an established company to use its greatest resources (pre-existing investments and staff) to act like a start-up.