Understanding Cloud Computing – 5 – SaaS

In my previous posts on IaaS and PaaS, we covered the building blocks of Cloud Computing. SaaS is the top most layer in our cloud computing stack that rides on top of the power unleashed by the Infrastructure and Platform layers to really deliver value to consumers and enterprises.

SaaS or Software as a Service is quite a buzz word these days. Why so? Is it a new concept?

Not really. SaaS is about hosting a software application on a server and allowing users to use it via Internet connected computers from anywhere in the world. The user need not install the application to start using it on his computer. He/She can just access it as a service over the Internet. Web based email is a basic example of SaaS.

Other more recent examples include photo editing that certain website allow, word document to pdf conversion, Google word processing, spreadsheet applications, etc which you can access through a simple Internet browser and more. If SaaS had been around for so long, then why the buzz now?

Several reasons can be attributed to it

SaaS as a business centered concept

SaaS as a concept has worked successfully for individual centered applications but not business centered applications. There are both technology related and business related reasons for this. While SaaS applications like e-mail, office suites, etc have taken off quite well, business related SaaS applications like CRM (Customer Relationship Management) software, sales force automation software, payroll applications, procurement, logistics software have only started gaining traction now.

Why so?

Technology has matured

• New software design and delivery models allow multiple instances of an application to run at once
• Internet bandwidth costs have dropped significantly to allow companies to buy the connectivity necessary to allow the remotely hosted applications to run smoothly
• Media rich AJAX based UIs that do not go for a full page refresh when you click on a button.

Business customers are realizing the benefits SaaS can offer

• Delayed deployments and high Total Cost of Ownership are forcing CIOs to look away from the traditional software delivery format.
• Business customers are frustrated with endless cycles of buying software licenses, paying for maintenance contracts, unresponsive helplines, costly upgrades, etc.
• Pay-as-you-go benefits
• Easy add ons
• Easy ability to switch vendors if current vendor is unresponsive to business problems
• No software maintenance headaches

And add to this the early successes that the world is seeing in early pioneers of SaaS like Salesforce.com, WebEx, Digital Insight, etc. The model has proven viable. We need to wait and see how the trends in SaaS unfold.

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