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Cloud or Fog?

Cloud computing is a foggy concept these days.  As its popularity grows, many misconceptions arise.  Let's take a look at the fundamental elements defining the cloud.

There are three main categories of cloud services: Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).  These three types make up cloud computing as we know it today.  There are many degrees within these and many confusions around how best to categorize certain services.  It’s more or less a continuum so it becomes difficult to determine what is truly a “cloud service” and what is foggy smoke and mirrors.

Thankfully, there are key markers across all three categories to provide perspective, which include:

1.    Subscription-based licensing
2.    Accessible from anywhere via the internet
3.    Multi-tenant architecture
4.    On demand (pay for what you use) model

Subscription Licensing: Across all categories, payment for cloud services is handled on a subscription basis, making it incrementally more affordable than traditional licensing or brick and mortar options.  For a SaaS example, consider the Webex Meeting Center.  I can subscribe to use this solution for a reasonable monthly rate, month-to-month as I need it, or reduce the rate by committing to a longer 12-month term.

Accessibility: A key component of cloud computing is that because the service “lives” on the Internet, it is available from anywhere in the world where the Internet is accessible.  Consider Quicken Online, whether I am at home, at work or on the train with my cell phone, I can access accounting information online. 

Multi-Tenant Architecture:  When we all log into Google’s Gmail service, the private space for our messages is automatically partitioned and provisioned for us, so no-one else can see our messages. The same is true for IaaS services, such as renting server space on Amazon's EC2 service.  An application could be on one or several boxes with one or more other applications depending on the demand for storage and bandwidth.  This capacity sharing and provisioning is one of the main benefits of the cloud.

On Demand:  Cloud-based services tend to scale very well and can be ideal for organizations who wish their IT budgets to grow with the demands of doing business.  It’s very similar to a common household utilities model.  When you use a little, you pay a little, and when you use more, you pay more.  SaaS subscriptions are often priced on features needed and a per-user basis, meaning it can scale nicely with staff growth and the needs of the organization.  Same is true with IaaS which scales with the need for space and bandwidth.  For you finance junkies out there, this turns what would normally be CAPEX (or capital expenditure – expenses on physical things) into OPEX (or operating expenditure – expenses on operating your business), a definite advantage to the financial model in many organizations.

Turning capital expenditures into operational expenditures is only one of the key benefits for cloud services.  They are highly scalable, widely available and a great way to outsource the extraneous so that you may focus on your core business.  With new services popping up almost daily, the marketplace for cloud services will soon become both more enriched and better defined.  Go forth and follow the key markers to part the fog and find the services that meet your needs.

Tags: SaaS, Cloud, Internet, Software

Is SaaS Sexy for the Social Sector?

Software-as-a-Service (SaaS) has become something of the “solution de jour” for the for-profit sector as companies seek to shave costs further and focus on their core deliverables, which for most businesses is typically not building software.

While the social sector tends to trail for-profit markets by several months when it comes to macro-economic forces and spending, I am beginning to see movement in the direction of SaaS. The question for social businesses and non-profits alike remains, “Is online software right for our organization?”

In the end, I believe its “horses for courses” (as we say in Australia). For some situations, using off-the-shelf software (such as Microsoft Office or Adobe Photoshop) will suffice. This is particularly evident when the software is a leading application, and the product meets the majority of requirements.

For other situations, building an open source and/or “Free Open Source Software” (FOSS) solution makes a lot of sense. If the application needs to be openly shared, developed and built upon over time by a “connected” industry that is sufficiently resourced to create and maintain an appropriate solution, the benefits can be significant. Caution should be taken when considering how “free” such solutions are, as open source tends to be as “free” as puppies are free – indeed, sometimes they are about as “free” as inheriting the whole litter! But in many cases, the benefits far outweigh the risks.

As a SaaS provider, I may come to this topic with a distinct bias – but my background has been equally shared across open source and installed software solutions. I am meeting more and more companies that are simply not interested in being a software developer. These organizations are keenly focused on mother/child healthcare, economic development, safety, and other social missions.

For those organizations, SaaS can be a real opportunity. Some the many benefits these organizations can realize include:

· Lower total cost of ownership (TCO)

· Immediate startup

· Complete development already done (Dev, QA, UAT, Release)

· Maintenance included in the monthly cost

· No IT staff or technical coding required

· Low-cost entry to use the functionality due to monthly subscriptions

Consider how many organizations build their own email programs these days: none. Why? Because there are many effective and affordable alternatives. I believe that we will see more SaaS products introduced within the social sector in 2010.

As I said earlier, its horses for courses, but there are a lot of organizations out there who just need to run effective programs, not be in the business of software creation, release and maintenance.

It all comes back to a single question – what is your core mission?

Tags: SaaS, Cloud, Software