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Beware of SaaS in True Cloud Clothing

By July 8, 2014Article

With all the buzz about cloud computing today, it is easy to lose sight of what it means for software applications to work — truly — in the cloud. Plugging in a piece of technology “in the cloud” and slapping a label on it does not automatically make it a true cloud-based solution.  

It’s time to set the record straight on what it means to be a true cloud solution, as opposed to just Software-as-a-Service. What does true cloud really mean in computing? How is it different from other SaaS models? And why does the difference even matter? 

Let’s level set with some key definitions first. 

What is true cloud? 

A true cloud solution is multi-tenant, an architectural model whereby one, and only one, instance of software runs on the cloud service provider’s servers and is used by multiple tenants, or clients. By running one instance of software, true cloud solution providers minimize operating costs and provide predictable total cost of ownership (TCO) to their client organizations. 

What other kinds of SaaS are there? Isn’t it all in the cloud? 

The critical point here is how a solution works in the cloud rather than if it lives in the cloud. It’s no secret that demand for SaaS technology has been growing at an astounding rate. The recent “Future of Cloud Computing” survey from Gigaom Research and North Bridge Venture Partners showed that SaaS adoption has grown from 13 percent in 2011 to 74 percent this year. 

With this incredible demand, on-premises solutions had to move to a SaaS model to even stay relevant in the market. Therefore, many of the solutions available today weren’t born in the cloud. They were simply moved there. And like most things, you can’t make it something it’s not if it wasn’t born that way. 

These solutions that have moved to the cloud offer SaaS subscription-based pricing models; however, their solution is hosted in a single-tenant deployment model, meaning the solution provider maintains and manages separate instances of software for each individual client. While it might not sound too bad, this approach is far more costly for the provider to maintain. 

For example, a single-tenant SaaS solution provider with 800 customers will have 800 individual instances, including the entire technology stack, to manage, maintain and deploy software updates to. This type of architecture is also not able to deliver the benefits that multi-tenancy offers, which is why virtually all of the new vendors entering the cloud space are multi-tenant solutions. In addition, it prohibits clients from receiving instant value from new innovations, as new features and functions must be bundled into one or two releases per year and deployed during scheduled downtime maintenance windows.  

Setting the record straight 

On the surface, other kinds of SaaS and true cloud technology appear to provide similar benefits. But once you look under the hood, you start to discover the goods that can have a real impact on your business objectives and your bottom line.  

The benefits of true cloud are numerous, but I’ve narrowed down the top six that make it superior to other SaaS offerings. Keep in mind these key points when evaluating solutions to ensure you get the maximum ROI: 

TRUE CLOUD BENEFIT #1: Velocity of innovation 

With all client organizations using the same platform, a true cloud provider has in-depth knowledge of how its clients are using the software, both on an aggregate basis and individually. Why does this matter? This insight provides the knowledge necessary to continually innovate with new features and functionality that customers really need based on real-world use cases. Maintaining one instance of software also enables the solution provider to be extremely agile in developing and seamlessly deploying regular updates, in many cases on a daily basis, without interruption to customers. 

Enabling customers to capitalize on technology innovations so much faster translates into a competitive advantage for them. Other SaaS providers simply cannot match this capability because they are not privy to customer usage on an aggregate basis, so they are unable to recognize trends and opportunities to innovate in unique ways. They also must individually manage, upgrade and service each client instance, so they remain tied to infrequent release and upgrade schedules that often just don’t meet customer needs in real life. 

TRUE CLOUD BENEFIT #2: Time to value 

Time is money; and with a true cloud-based solution, implementation is fast and easy. A true cloud implementation has services up and running in a matter of hours or days. The solution has basic configurations, allowing clients to customize to their needs as they grow and evolve over time, while immediately increasing efficiencies and decreasing costs. 

Single-tenant SaaS solutions, however, require configurations and customizations specifically for each client before going live. Implementation typically takes two to six months, or longer, in addition to the resources required for deployment and ongoing maintenance. 

TRUE CLOUD BENEFIT #3: Low total cost of ownership 

A true cloud provider delivers services from a single instance of software with resource costs shared among all client organizations. This allows the solution provider to optimize resources and usage across the entire stack to improve performance. Upgrades are delivered seamlessly and at no additional cost. These savings are passed on to the client base, bringing predictability and lowering the overall cost of ownership. 

Other SaaS solutions can be very expensive for clients since the solution provider maintains a unique instance of software specific to that organization. This model exponentially increases the provider’s operating cost, which is passed on to the client. And this is often in addition to upgrades and other services. 

TRUE CLOUD BENEFIT #4: Always new 

Since all clients of multi-tenant systems run on a single instance of the application, solution providers are able to quickly deploy upgrades, which are immediately available to all users. These upgrades do not require scheduled downtime and ensure clients are always using the latest, most refined and stable features and capabilities. Clients are never left behind, as updates are effortless and seamlessly integrated. 

Other SaaS providers must individually update client instances of software, increasing cost structure, time to value and limiting the number of upgrades they can deploy each year. Scheduled downtime is typically required to deploy these upgrades, often causing an inconvenient disruption of service. Because upgrades must be scheduled — and paid for — the most cutting-edge technology is not easily available to clients, limiting their ability to maximize potential and get the ROI they need. And isn’t that the point? 

TRUE CLOUD BENEFIT #5: Scalability 

Scaling a well-architected multi-tenant solution is accomplished by simply plugging more hardware into the technology stack. This added capacity is immediately passed on to a true cloud provider’s client organizations. Costs remain the same, and clients will not experience an interruption in service. 

Other SaaS providers, however, must individually upgrade client software and hardware, increasing cost structure and limiting the number of upgrades they can deploy. This bogs down the true value of the solution with additional costs and time lost for maintenance and upgrades, not to mention opens up the floor for more headaches. 

TRUE SaaS BENEFIT #6: Better service, faster performance 

Because a true cloud provider monitors and administers a single instance of software for all clients, it can deliver service, including problem resolution and troubleshooting, faster than other SaaS counterparts. Instant visibility into both individual and aggregate client usage helps true cloud providers troubleshoot any and all issues, including the ability to precisely assess speed, response time and utilization across the platform. Any performance issues can be quickly identified and resolved for one or all clients at one time. 

Other SaaS solutions simply cannot match this granularity of data on aggregate client usage, limiting their ability to raise the game in their level and speed of service. 

Leave the baggage behind 

True cloud solutions enable you to make the leap to on-demand, cost-effective, instantly deployable solutions, leaving the baggage of legacy or hybrid systems behind. Whether it’s in IT, Procurement, Human Resources, Marketing or any area of the business, true SaaS-based technology can provide exceptional value over other SaaS models.  

Doron Gordon is a successful entrepreneur and the founder and CEO of Samanage. Prior to founding Samanage, Doron was a co-founder and VP of sales and marketing at Continuity Software, a leading provider of disaster recovery and high-availability management solutions. Earlier, Doron was a senior manager at BMC Software, a global leader in IT management software. He was also the founder and CEO at Always-On Software, an innovative application service provider. Follow him on Twitter and Samanage blog.










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