How Groupon used the Cloud to become the fastest growing Company ever

As I sit here on vacation, wading in the nice fresh water of Lake Winnipesaukee and breathing in the fresh New Hampshire air, I find myself with my iPad connected to the Cloud and the world as if I were sitting at home. With my Newstand app I can download the latest issue of my favorite tech magazine, CPU: Computer Power User (in case you were wondering), stream all my music through iTunes and even let my son watch the latest Mickey Mouse episode with the Disney Junior app. Connecting to the Cloud couldn’t be any easier or more seamless. Cloud computing is in our everyday lives whether you notice it or not. From tablets to smartphones and now even SmartWatches. Yes, that’s right folks, just like we’ve only seen in the movies; SmartWatch Technology has come to the market. So, just to finish my point here were are in the 21st century where even if you’re hundreds of miles away from home, you can feel as if you were still in the comfort of your favorite rocking chair at home. From your personal life to work life, your life now revolves around the Cloud.

Groupon and the Cloud

This brings us to our topic today, just how embedded in our lives is the cloud? We may not be aware of it but most of the products and services we use every day utilize the cloud. One of these services is the deal and coupon website Groupon. For those not familiar with the company, Groupon is an online merchant where local and national businesses can offer discounted gift certificates and coupons, prospective customers can then browse their local areas for discounted activities ranging from a dinner date to a fishing trip. Groupon has been nicknamed the fastest growing company in history and was bought out by Google in 2010 for $6 billion.

How did they do it?

You may be asking, how did they grow so quickly? Well the simple answer is a combination of an amazing idea and the right technology to support it. To facilitate their incredible growth Groupon founders Ryan Miller and Chris Bland moved away from building their own internal infrastructure and instead used tools such as and Amazon’s EC2 and S3 cloud solutions to power the site. Since their web tool deals with actual local commerce uptime is essential, local businesses and deal goers alike are constantly accessing the site and adding new deals daily, requiring Groupon to be able to keep up with their growth and pace of business.

This is why Miller and Brand quickly made the decision to base their company’s infrastructure in the cloud. Even in the early days when Groupon only had a single market in Chicago they based the site in the cloud. This allowed the company to quickly expand resource, bandwidth and processing power quickly and on a scale not possible with internal infrastructure. During periods of heightened growth Groupon was able to add additional resources via Amazon’s EC2 and S3 Cloud at a moment’s notice, facilitating their amazing growth.

Leading the charge

Groupon is a very cool company, not only in terms of their record setting growth but in how agile and responsive they are as a business. They have proven that you don’t need to build your own internal infrastructure to be successful; in fact it may be a better idea not to.

Not too long ago the common trend was to build and maintain your own in-house IT to support a business or website like Groupon, and for some businesses that method may still do the trick. However, for a growing number of companies - large and small - it is no longer necessary to build that infrastructure. The cloud’s speed, efficiency and redundancy often costs less than in-house infrastructure. Cost however, is just a small part of why the cloud is so powerful, the real advantages come when the business needs to scale and grow. During Groupon’s second year of business they grew 2,241%, that’s no typo; they made $713.4 million in 2010 up from $30.47 million the year before. During incredible growth like this Groupon relied on the cloud to scale and add resources when they needed them. This is the true advantage of the cloud, the ability to add or take away whatever resources are necessary right when you need to. You don’t need to be the fastest growing company in history to see the advantage in that.

Written By: Chris Bates
Cloud Support Engineer, Team Lead, TOSS C3

To learn more about the cloud download our free cloud report here!

Leave a comment!

You must be logged in to post a comment.