Like a lot of people in the collaboration and communication space, I'm extremely interested in the Software as a Service (SaaS). Here are my notes from a recent Gartner webinar on SaaS and cloud computing. It was originally broadcast on May 27, 2009, from 1:00 – 2:00 p.m. EST. The presenter was Daryl C. Plummer, Managing VP & Gartner Fellow.

Cloud Computing

  • Cloud computing definition: "A style of computing where scalable and elastic IT-related capabilities are provided 'as a service' to external customers using Internet Technologies"
  • When you say "cloud", always include another word, like "computing", "storage", "services." "Cloud" by itself really doesn't mean anything.
  • The customer doesn't have to understand how a service works. They are "abstracted from provider concerns through service interfaces."
  • For the most part IT thinks they need to know how a service works, mostly because we've trained them to do that. Instead, focus on outcomes, measurements, and contracts that mitigate risk.
  • Focus on the outcomes you need, not on whether or not the service included the "cloud" label or not.
  • Cloud computing is a provider-consumer relationship, instead of a vendor-user relationship.

Cloud Computing models

  • Acquisition model: Service – "All that matters is results. I don't care how it's done."
  • Business model: Pay for use – "I don't want to own assets; I want to pay for elastic use, like a utility."
  • Access Model: Internet – "I want accessibility from anywhere from any device."
  • Technical Model: Scalable, elastic, sharable – "It's about economies of scale with effective and dynamic sharing."

Risks of Cloud Computing

  • Availability, capacity, and performance
  • Security, privacy, disaster recovery policies and procedures
  • Service metrics, reporting and analysis
  • E-discovery and investigations
  • Data ownership, recovery, and migration
  • Integration with on-premise systems
  • Commitment requirements (terms, minimum use)
  • Setup, training, and integration fees
  • Difficult to customize
  • Switching costs
  • Governance of sourcing process
  • Data/process location and isolation
  • Regulatory requirements
  • Transparency to provider operations
  • Hidden supply chain impact

Common cloud computing use cases

  • Prototyping/Proofs-of-Concept
  • Web application serving
  • Email / Collaboration
  • Application appliances
  • Application testing resources

Software-as-a-Service (SaaS)

  • A "form" of cloud computing in almost all cases.
  • SaaS is misnamed - It should be called "Application"-as-a-service, as opposed to "Software"-as-a service.
  • Delivers an application based on a single set of common code in a one-to-many model.
    Uses a pay-for-use or subscription licensing model.
  • Beyond simply "bleeding edge" and "good enough", it is now viable and ready for consideration.
  • Almost all software vendors will have an SaaS offering

Upsides to SaaS

  • Use operating budget instead of capital budget
  • Only pay for what you use
  • Platform homogeneity
  • Lower Total Cost of Ownership(TCO) in mid-term; Long-term TCO is yet to be determined
  • Faster implementation
  • Increased innovation

Downsides to SaaS

  • Governance issues
  • Release management dictated by provider
  • Limited 3rd party tools
  • Vendor management
  • Security
  • Long-term TCO
  • Integration between on premise and SaaS

Four things you can do today

  • Savings: Compare your cost of capital expenses versus cloud services
  • Portfolio: Find three workloads which you can experiment (Move workloads, not applications)
  • Migrate: Move existing apps into cloud (Served from the cloud, versus cloud services)
  • Use: Consider cloud email and collaboration (Get immediate feedback)

Gartner Bottom-Line Recommendation
Now is the time to consider cloud computing model for delivering services to employees, as well as customers and business partners.

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