What is a cloud service business?
With this kind of online business you would own some software, infrastructure or platform and give people continuous access to it via the cloud.
You’d monetize by charging an access fee, selling ad space, selling user data, that kind of thing.
Software as a Service (SaaS) seems to be the most popular and, I’d argue, by far the most accessible kind of Cloud Service business, so I’ll mainly share SaaS examples on this page.
Cloud Service is one of 19 types of online business and considered a Level 5 online business, according to our framework.
6 Levels and 19 Types of Online Business
Level 1 = Novice
Okay for side income or beer money, but hard to earn a living.
Level 2 = Intermediate
Best for earning a living online when you’re starting out, but hard to scale.
Level 3 = Advanced
Easier to scale and higher income potential, but you usually need significant investment of time and/or money upfront.
Level 4 = Superior
Even more scalable and even higher income potential, but also more complex / difficult / expensive.
Level 5 = Distinguished
Most complex / difficult / expensive, but the rewards here can be massive.
Level X = Wildcard
These are the misfits. Many aren’t even considered businesses in the traditional sense, but they are all ways to make money online. You typically need a lot of time, money, or luck to succeed with anything here.
How can you make money online with a cloud service business?
Here are the legit ways I’ve found to make money online with a cloud service business…
Build Marketing Software
Nathan Barry built and grew ConvertKit into a popular email marketing solution…
- Founder of ConvertKit
- $2+ million ConvertKit monthly revenue
Build a Hosting Business
Traditional web hosting companies fit here, but a more relatable example would be Matt Basta’s podcast hosting service…
- Founder of Pinecast
- $13,000 Pinecast monthly revenue
Build Collaboration Software
Ryan Badger apparently built v1 of his Dropbox-like software in a weekend from a beach in Thailand…
- Serial Entrepreneur
- $19,500 peak monthly revenue for Uploadfiles.io
Build Project Management Software
Renato Marinho’s PM software started off as a side project while working for another startup…
- Founder of GitScrum
- $50,000 GitScrum monthly revenue
Build Freemium Software
Curtis Herbert built an app that helps skiers and snowboarders track their runs. You can use a free version or pay a subscription for premium features.
- Founder of Slopes App
- $25,000 monthly revenue from app
Build Niche Software
How’s this for niche: Preetam Nath’s software enables online store owners to communicate with visitors and customers via WhatsApp…
- Co-founder of SuperLemon
- $29,000 SuperLemon monthly revenue
Pros and Cons of Cloud Service Businesses
- Usually very scalable.
- Strong passive income potential.
- Fairly predictable revenue if using subscription model.
- Easy to sell once successful.
- Several monetization options.
- Usually requires a complex set of skills.
- Often a slow and/or expensive way to start making money online.
- Customer service.
- Data security issues.
Is a cloud service business a good way to earn a living online?
It’s an attractive business model but you’d need to bring your A-game and probably hire some A-players if you want to succeed. Don’t expect to get rich quick or easy.
Cloud Service Business Resources
- 5-Minute Breakdown: Software as a Service (SaaS)
The below video is a good overview of SaaS, plus the other types of cloud services (IaaS and PaaS)…