Author: Jason Kearns, VP of Technical Services
Technological buzzwords are the business equivalent of the fashion fad. Typically, they’re clever terms that we’re convinced represent a legitimate advancement, but that usually amount to “here today, gone tomorrow” jargon. They usually go the way of shoulder pads and stirrup tights (remember those?).
As a person in the business of software and technology, I’m fascinated to see these fads play out, but it’s critical to determine which trends are truly game-changers and which are smoke and mirrors. It’s even more important to determine which offerings represent actual technological advancements and which are simply riding the coattails of a popular marketing trend.
In every industry today, the advent of the Cloud is a huge trend. Cloud computing and cloud storage are being introduced into virtually every type of application, both enterprise- and consumer-based.
With the multitude of buzzwords out there featuring “cloud” in some way, how do you tell them all apart? And more importantly, how do you know which ones are fads and which ones actually represent a useful advancement?
To help sort through the confusion, here is some cloud terminology you’re likely to see in the business world today, along with my take on the pros and cons of each.
Cloud Computing or Storage
“Cloud” is a generic term for an application or storage location that is only accessible remotely. That means that you don’t have anything installed or stored on your local device. It’s generic because there really are no standards for how, what and why it is delivered in the Cloud. Simply put, if it’s not local, it’s in the Cloud.
- Having storage and applications in the Cloud is truly a game-changer: it means that more businesses and people can gain access to more capabilities, from anywhere.
- The challenge for most is that the “Cloud” is about as abstract as you can get. It’s the modern version of the “black box”: we don’t know how it works, we can’t control it and that can be scary. For some organizations, having critical data and processes in the Cloud introduces insurmountable security concerns. Many organizations are more than happy to move applications to the Cloud, however. We’ve even seen some large companies declare their IT strategy “100% Cloud.”
Software as a Service (SaaS)
Software bought on a subscription basis and delivered via the Cloud. This is a loose definition, since technically you can buy software on a subscription basis that you install locally. However, many of the benefits of using SaaS go away if you are installing locally, so that’s not typical. There are three primary drivers to using a SaaS application:
- No upgrades are required locally, which in an enterprise application can be a substantial ongoing cost. This gives your organization access to the richest features sooner. The idea is that you are using software that is always on the latest-and-greatest version, so you never need to upgrade it.
- No hardware or infrastructure to support.
- Lower startup costs. Even large and complex enterprise applications can theoretically be live relatively quickly. There are no installs to run or boxes to set up. Additionally, customers are essentially paying per user, so there is the ability to phase in the cost over time as opposed to buying a full perpetual license like we did in the olden days.
One of the most nuanced terms in the industry. This is a feature of the underlying architecture of an SaaS application. In order to be consider multi-tenant, the application must share a common code set and database across customers (“tenants”). But why should you care about this?
- A common code base is important because it means new features and bug fixes benefit every client as soon as they are released.
- A common database theoretically holds the same benefit, since a new feature or bug fix could require a database change.
- In Canidium’s experience, the real value in multi-tenant SaaS is the cost. A software company with a well-built multi-tenant architecture has fewer moving parts to manage. This pays off over time, as they can do more with fewer resources. This cost savings can also lead to lower costs for the company’s customers.
This is the term we use when a SaaS application is not multi-tenant. We don’t need to know the exact architecture, but this generally means that the software host is keeping a different install maintained for each customer. These could potentially be on different versions, and they’re usually housed in different databases. Hosted systems can take on a variety of different flavors and be a blend of architectures.
A different way to say SaaS. (On-demand gives the connotation of being quicker.) This term was likely created to contrast with the old-school batch-processing systems that ruled enterprise systems for years.
A cloud-based application that is accessible from anywhere. Go to salesforce.com and log in, for example: as long as you have an internet connection, you can use it.
The equivalent of building a Cloud within the confines of your own network. Presumably, this offers some of the benefits of a remotely accessible application while still keeping all data and functionality local to the organization. In most businesses, this means that you can get to the application from your desk or from home if you have a VPN connection established. Don’t try to log in from the public library, though: it won’t work.
Shorthand reference for having two cloud-based applications “talk” to each other. Imagine your CRM sending opportunity data directly to your incentive comp solution, for example.
These are the basic cloud-related buzzwords you’ll run into in the business world today.
In Canidium’s space (sales performance management), software vendors compete for market share and mindshare. Subscription-based software has become the standard, and SaaS offerings are now the norm for new players.
The older vendors have attempted to provide all of the perceived benefits of a Cloud-based application regardless of what their original architecture used to be, but it’s a significant undertaking to convert a software architected as a standalone, on-premise application to a multi-tenant SaaS. This also represents a great deal of change for organizations that are used to managing their own on-premise applications under perpetual licenses.
In the end, the Cloud is real and it’s here to stay. Businesses have always gravitated toward specialization, and it was only a matter of time before it took hold with our applications as well.