The SaaS Value Proposition

Eweek recently featured an interview with Adam Selipsky, the Vice-President of Amazon Web Services (AWS), in which he revealed the most persistent myths about Cloud Computing that he has to deal with in his job.

He cited 5 recurring myths about Cloud adoption:
  • The Cloud Is Not Reliable
  • Security and Privacy Are Not Adequate in the Cloud
  • I Can Get All the Benefits of the Cloud by Creating My Own In-house Cloud or Private Cloud
  • If I Can’t Move Everything at Once, the Cloud Isn’t for Me
  • Cost Is the Biggest Driver of Cloud Adoption

His answers to the first two objections are in-depth and compelling, outlining the considerable lengths that AWS go to ensure both reliability and security.

He goes on to state that there is a psychological barrier as CIOs can be under huge pressure to deliver performance from several thousand applications. Traditionally they felt comfortable knowing that if there were problems with an application, they could walk down the hall and collar the right person until it was fixed. Relinquishing that immediate control can be a leap of faith. "People think if they can control it they have more say in how things go. It's like being in a car versus an airplane, but you're much safer in a plane." Mr Selipsky says.

He then moves on to the flaws in private clouds: they fail to eliminate CapEx, do not benefit from the efficiencies of multi-tenant resource allocation, do not benefit from the economies of scale of a public cloud and do not allow the IT department to refocus on differentiating problems.

The fallacy of a complete and instantaneous switch to the Cloud is quickly pointed out, leaving us with the final myth, that the biggest driver of Cloud adoption is cost.

This is one that we experience over and over again. I have seen it written on many a forum that cloud computing is at base glorified and well-marketed outsourcing. This is simply not true for 99% of cloud users. Part of its function is indeed outsourcing - tasks through which your company are not gaining a competitive advantage are taken off your hands - but Cloud Computing and SaaS brings so much more to the table. Here is our view of the true SaaS value proposition:
  • The application can be accessed securely from any machine, anywhere.
  • SaaS products are built for collaborative working and the easy results sharing
  • Software licensing can be scaled up or down on a monthly basis, giving flexibility and eliminating the problem of "shelf-ware"
  • The multi-tenant system means that you have huge computing resources at your disposal and without requiring disproportionate investment for variable usage
  • The software is continuously updated and improved by the vendor, allowing it to evolve with your changing requirements and feedback
  • There is no capital expenditure required for set up (far from true with traditional outsourcing models)
  • Traditional software and server vendors are selling technology to IT professionals. SaaS vendors are only selling a service to the end-user, meaning that they are 100% focused on end-user experience.
  • SaaS removes limitations of what you can achieve using your in house IT hardware and support. All you need to do is work out what you want your software to do and how much you want to pay for it, then find the product that fits best.