SaaS is Dead, Long Live the Cloud

Michael Vizard

One of the fundamental tenets of software-as-a-service (SaaS) is that the application is suppose to run as a single instance on top of multi-tenant IT infrastructure. With Salesforce.com, for example, every customer has specific rights and privileges to a shared customer relationship management (CRM) application running on database servers managed by Salesforce.com. Given that model, there is no "software" from the perspective of the end customer. The Salesforce.com business model, combined with the fact that the application was designed from the ground up to run on a specific multi-tenant architecture, means customers can't run a version of the Salesforce application on their premise.


But with the advent of virtualization and cloud computing, the ability to allow each customer to run their own "private instance" of an application on shared IT infrastructure is upon us. And with that comes some hard questions about the viability of SaaS as we know it today.

Vance Brown, CEO of Cherwell Software, a provider of an IT service desk application and cloud computing platform, says software vendors should no longer be in the business of trying to dictate where customers should deploy their software. Application software can now be deployed on shared IT infrastructure on premise just as easily as it can be deployed on shared IT infrastructure in the cloud.

As such, the whole SaaS concept is either antiquated, or needs to be redefined for the cloud computing era. There is no real legitimate reason not to give customers the security benefits of a single-tenant application environment even though the underlying IT infrastructure is shared on premise or in the cloud. The customer can still choose to "lease" the software and pay for it by the user, or pay for a license. How customers pay for the software should have nothing to do with where the software is deployed. Car manufacturers don't really care if you choose to buy or lease a car and software vendors shouldn't either, notes Brown.

As a relatively new software vendor, Cherwell Software benefits from fundamental shifts in enterprise IT that have taken place in the last several years. Brown notes that first generation SaaS application environments are now over 10 years old. Those applications were built at a time when the enterprise computing constraints were different and everybody thought that browsers would be the preferred method for accessing software.

Modern cloud computing applications can be accessed using browsers or rich clients. We no longer need to dictate where the application software needs to run or the type of client that should be used to access it. In effect, the first generation of SaaS applications have become legacy applications in the new era of the cloud, which is defined by an elasticity that gives IT organizations maximum flexibility in terms of choosing to deploy software on premise, in the cloud or both.

So the next time some software vendor tries to tell you where to run your software, you might want to remind them that it's truly none of their business.

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Add Comment      Leave a comment on this blog post
Jan 28, 2011 8:37 PM Del Merenda Del Merenda  says:

Wow! You really think this way? Vendors telling customers they can only run the application on the vendor's SaaS environment? A bit short-sited, I believe to focus only on infrastructure. The whole premise of SaaS is to provide sophisticated solutions with a common theme to the market in a way that is effective, efficient and affordable. Hosting is but a small aspect of the SaaS model.

Our value proposition is not that we are a SaaS solutions provider, but a provider of sophisticated applications that can be affordably acquired, quickly launched and operated. SaaS vendors selling this model can easily adjust to the cloud as needed but if the markets served are SMB, we won't be seeing the notion of cloud computing first in their decision process. SMBs need to compete against the enterprise by offering equally robust solutions. They do not have the resources or appetite for building their own cloud platform for some time to come, if ever at all.

To look at the total application build-to-deliver picture for the total market strictly from a delivery model perspective is cloudy thinking in my opinion.


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