Cloud Computing is THE SaaS killer...with a little help from some friends.

Did the title make you go "HUH"? Let me explain.

First a couple of definitions:

• SaaS or Software as a Service [from Wikipedia] - "is a model of software deployment whereby a provider licenses an application to customers for use as a service on demand." Key characteristics:

• network-based access to, and management of, commercially available software
• activities managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the Web
• application delivery typically closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics
• centralized feature updating, which obviates the need for end-users to download patches and upgrades. 

• Cloud Computing [from Wikipedia] - "is a paradigm of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet.^[1][2] Users need not have knowledge of, expertise in, or control over the technology infrastructure in the "cloud" that supports them. Cloud computing customers do not generally own the physical infrastructure serving as host to the software platform in question. Instead, they avoid capital expenditure by renting usage from a third-party provider. They consume resources as a service and pay only for resources that they use. Many cloud-computing offerings employ the utility computing model, which is analogous to how traditional utility services (such as electricity) are consumed, while others bill on a subscription basis. Sharing "perishable and intangible" computing power among multiple tenants can improve utilization rates, as servers are not unnecessarily left idle (which can reduce costs significantly while increasing the speed of application development). 

SaaS has differentiated itself based on being more cost effective and easier to deploy than traditional SW tradeoffs are that all customers (tenants of the SaaS infrastructure) are updated at the same time, customers are locked into the deployment and customization is virtually impossible. Now there is a way for Independent Software Vendors (ISVs) to deliver the ease and cost effectiveness of SaaS without many tradeoffs. How? By combining three evolving technologies:  Cloud Computing + Software Appliances + Automated Provisioning Management. Let's call this solution combination: Cloud Application Deployments or CLADS. 

How CLADS can work is pretty simple:
1. As part of a standard Software Lifecycle, a Software Appliance would be developed for each released build.
2. These Software Appliances would be made available for distribution
3. For a "SaaS Like" distribution, the Software Appliance could be automatically provisioned to a Cloud Computing provides like Rackspace or GoGrid.

Here are just a couple of ISV business use cases where CLADS levels the playing field:

• Providing Demo / Trial Accounts:  'Free Demos' are a staple marketing component of SaaS providers. For ISVs, creating demo and trial accounts is often difficult, time consuming and costly. There are multiple components and ISVs typically do not have the hosting infrastructure expertise that a SaaS provider has. Also, creating demo environments based on a dedicated physical infrastructure can be very CLADs. With CLADs, ISVs benefit because:
• Hosting is provided by a 3rd party with infrastructure expertise
• Costs are variable based on actual usage - you only pay for what you use
• The ISV can maintain strategic focus
• Deploying Implementation Environments:    Enterprise deployments (ie. non-SaaS) often require multiple environments for development & configuration, for staging, for issue validation and for production. Each of these environments requires upfront setup and then on-going maintenance. With CLADS, ISVs benefit because:
• Customers can get their different environments provisioned and ready to use very quickly with minimal effort
• Upgrades to customer environments are easier since they can be done when the customer choose to have the upgrade, not when the SaaS provider chooses to do the upgrade

Bottom Line: With  Cloud Computing + Software Appliances + Automated Provisioning and  Management, ISVs (open source and closed source) are able to eliminate many of the advantages that SaaS providers have used to differentiate themselves without losing the benefits that ISVs have traditionally had. The next logical conclusion is that without their differentiators, many SaaS options (see my blog post on different SaaS types for why I say "many" not "all"***) will be at a competitive disadvantage versus traditional ISVs.........and that's how Cloud Computing (with a little help from some friends) is THE SaaS Killer.


*** Note: SaaS will not be going away as a delivery model. However, undifferentiated offerings  (ie. those that don't bring a special sauce" will have a very  tough time going forward.