Cloud computing: Simply SaaS renamed?

Industry leaders cite subtle differences between the technologies at SIAA OnDemand 2009 conference

Is cloud computing just a renaming of SaaS (software as a service) in today's buzzword-prone IT landscape? After all, both involve accessing applications over the Internet, with those applications generally residing on third-party servers.

But industry executives cited subtle differences Thursday at the SIAA (Software & Information Industry Association) OnDemand 2009 conference in San Jose, Calif., during a panel session pertaining to cloud computing, business models, and the enterprise.

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Panelists spoke of the cloud and SaaS as separate entities. Treb Ryan, CEO of cloud infrastructure provider OpSource, for example, stressed that "service levels of what we've seen in the cloud so far are far worse than [we have] seen from any SaaS provider."

Asked the differences between SaaS and cloud computing, Ryan and IBM's Dave Mitchell, director of strategy and emerging business for ISV and developer relations, cited nuanced differences.

"Some people view SaaS as a layer within cloud computing," Mitchell said. He also noted, "[SaaS is] really about delivering an application on a subscription model over the Internet."

"When you talk about cloud computing, cloud computing has to have significant real attributes around scalability and elasticity," said Mitchell. Not all SaaS solutions have the kind of elasticity associated with cloud computing, he said.

"Cloud as been largely defined as cloud infrastructure in the current market," featuring elasticity and offered by a vendor such as Amazon, Ryan said. A truly SaaS program, such as Salesforce or WebEx, is "designed to provide business applications within the cloud," said Ryan. Facebook is a social networking application in the cloud, he added.

"In terms of what is cloud and what is SaaS, in my opinion the big picture [is] who cares," said Tien Tzuo, founder and CEO of online billing services provider Zuora. The Internet is transformational and everyone is trying to figure out what it all means and take advantage of the global network, Tzuo said.

Panelists also discussed key drivers of application services in the cloud.

"For all of the economic advantages and business advantages to what's going on in cloud and SaaS, we believe the real driving factor that's driving adoption of these platforms is really a generation of users entering the workforce who spent their entire [lives] on the Internet," said Ryan.

Great SaaS companies, said Mitchell, are separated from others through an efficient marketing and sales force, making customers part of the development process and focusing on renewals.

"You get the best ideas from users," he said.

Customer service is critical for SaaS providers, said Sanjay Popli, vice president of corporate strategy at LiveOps, which provides cloud-based contact center services. Customers, Popli said, "expect significant upgrades and changes on a regular basis."

"If you lower the entry barriers [via SaaS], remember, you're also lowering the exit barriers," he cautioned.

Earlier at the conference Thursday, Lars Dalgaard, founder and CEO of SuccessFactors, touted his company's efforts in SaaS. The company, which has 5.4 million users, offers on-demand applications to align businesses to strategies and seek maximum business results.

SuccessFactors has been built over the Web. "A lot of companies still are not comfortable with that, but that's really how we've driven it," Dalgaard said.

SaaS still has a way to grow, but "not too long from now, people aren't going to buy software any other way," said Dalgaard.

"It's a great market to be in SaaS right now. It's for real," he said.

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Copyright © 2009 IDG Communications, Inc.