Software as a Service

SaaS is the acronym for Software as a Service.It is also known as Software on Demand. In simple words, an application that is delivered through the SaaS model typically is done so:

• Over the internet,
• Remotely by a third party, with little/no opportunity to bring that application in-house
• With a usage-based pricing model

For example, Google Docs Application. One can easily edit and create documents without installing the software and just needs an access to the internet to use the Google Docs Application.

Cloud Computing

Cloud computing refers to the virtualization of the data center, such that server machines are not thought of individually but as just a commodity in a greater collection of server machines. Cloud computing solutions in general strive to eliminate the need for an application deployer to be aware of the actual physical machines that are used to host the application. Some have called this idea “hardware as a service”. *
For all software developing companies, if they want to provide their software as a service, they need to host their software somewhere in the cloud and provide storage to store and access the user’s data. Also they will have to store all the user’s data in the same place, but the data identifies itself whom it belongs to (Multi-tenancy) think of like a apartment number, if you are living in apartments complex sharing the same address.

SaaS and Cloud Computing

Cloud Computing is viewed as a broad array of web-based services aimed at allowing users to obtain a wide range of functional capabilities on a “pay for what you use” basis that previously required tremendous hardware/software investments and professional skills to acquire. Cloud computing is the realization of the earlier ideals of utility computing without the technical complexities or complicated deployment worries. With this precept in mind, SaaS can be seen as a subset or segment of the cloud computing market that is growing all the time.
Unfortunately, opportunistic vendors, as well as uneducated journalists and overly simplistic industry analysts, are using the terms interchangeably to serve their own purposes.While this might infuriate industry purists, the good news is that both ideas are gaining greater mainstream attention and acceptance as a result of escalating coverage in nearly every IT industry trade publication and even more importantly among the major business pubs like the Wall Street Journal, Forbes, Fortune and BusinessWeek, along with the NY Times.

To make things very simple:

1. Cloud computing is an “infrastructure” response, a substitute to in-house data centers.
2. SaaS is a “usage” response, a substitute to classical software licensing solutions.

IT today

• Infrastructure: In house
• Usages: Software licences

IT tomorrow

• Infrastructures: Cloud computing
• Usages: SaaS

This positive development far outweighs the potential confusion that could arise about the nuances between the two concepts. The surge in demand for cloud computing and SaaS is partially due to macro-market factors, such as the recessionary economic climate and escalating pressures to fundamentally change traditional business practices. But, growing interest in cloud computing and SaaS is also the result of the success and satisfaction of the early adopters who are not only renewing and expanding their use of these web-based services, but recommending them to others, according to THINKstrategies’ research and consulting experience.

The ‘gold rush’ stage we are entering in the cloud computing and SaaS movement will attract plenty of self-serving vendors, overnight experts and tabloid press who will attempt to exploit this exciting market opportunity.