Differences between SaaS and Cloud Software

With all the discussions about about Cloud Computing going on, it’s time to draw lines and explain what the big differences are between Software-as-a-Service (SaaS) and Cloud Software.cloud-jail.jpg

SaaS: The dawn of Cloud Computing

SaaS has been attractive, because it removes all complexity from installation, deployment, maintenance, is globally accessible, and affordable. By its nature, SaaS resides in the “cloud” and overcomes the traditional headaches of VPNs for efficient collaboration. An added bonus is transparent backups (assuming there is backup strategy).

SaaS is great first step towards Cloud Computing, but it also has an important drawback: control. For all practical purposes, your data is not yours anymore. The SaaS vendor has full control over it; can mine it; and can lock you out of it. For consumers, this is generally not a problem, but for the enterprise, it is a concern.

In short with SaaS, the vendor is in control, not the customer. For the early days of Cloud Computing, that was an acceptable compromise, but times have changed and the cloud has evolved.

Cloud Software: The evolution of Cloud Computing

Cloud Software builds on Cloud Infrastructure (as described in this great post by our friends at RightScale). Similar to SaaS, Cloud Software provides instant gratification, taking mere minutes to be up and running. Depending on the vendor, Cloud Software is as easy to maintain and update as SaaS, and is of course globally accessible.

So what is the big difference? Your data and your application is sitting on servers that you control. There are no restrictions on moving data into or off your Cloud Infrastructure. These servers are for all practical purposes indistinguishable from servers in your physical data center.

What about backups? Cloud Software is designed to be run in the cloud. That means, it already addresses the need to replicate data repositories into the Cloud Storage fabric. Again, you control the Cloud Storage, so you can create additional copies of your data offline if you need to.

What about scaling? Cloud Software is designed to run on one to many machines. That means as your needs increase, you simply add more virtual infrastructure to the mix and voilà!

What about vendor lock-in? Cloud Software doesn’t really care what it runs on. With Cloud Infrastructure, all machines look the same, meaning you can move your application from one provider to another with few limitations. If need be, you can even move it back to your physical data center.

In short, with Cloud Software, the customer is back in control.

Is Cloud Software going to replace SaaS?

The short answers is “no” for the simple reason that SaaS works well when a single machine can services 1,000 to 100,000s of individual users, such as in a consumer setting. In the enterprise, however, Cloud Software has a big advantage. The premium to gain full control over your data and your infrastructure with Cloud Software is simply too low to give SaaS vendors the kind of control they have enjoyed so far. High value applications will transition to Cloud Software because customers want control, while SaaS will continue to supply free or low-cost applications and services.

This also reflects the different options for running MindTouch Deki Wiki. Wik.is is free for up 100MB (or $99/yr for 10GB) with no other restrictions, but the data reside on our servers. Alternatively, you can download Deki Wiki as a certified VMware image or from source code and install it on your servers. Or, you can get the best of both worlds, and launch a Deki Wiki EC2 instance directly in an Amazon.com data center in the cloud

It’s good to have choices!



  1. Steve, thanks for reacting to my post on defining cloud layers. I’m not sure I agree with your assessment of cloud software. I think it’s a step backwards from SaaS. I don’t want to run the server, even if it’s in the cloud. If I get an alert when it fails, if I need to check that the backups have run, if I need to migrate it to a larger something, if I have to do anything other than log in and use it, I’d rather not have it. As you may know, we’re using wik.is and we’d love to have the added flexibility of the download version, but I just don’t want to be responsible for yet another piece of software. We’d love you to offer the full flexibility of Deki Wiki in a SaaS form. With respect to owning the data, give us the ability to download a data dump in a usable form, or dump it periodically into an S3 bucket for us, that’ll do. Cheers and thanks for a great product!

  2. Thorsten, thanks for your insights. That’s funny, I feel you’re actually making my point since wik.is is a lightweight offering, you’re not taking advantage of all that Deki Wiki has to offer. But that’s alright, we’ll upgrade you later. :)

    More importantly though, you seem to define “Cloud Software” as an “EC2″ instance. That’s not the complete picture though. In my earlier blog post about Cloud Software, I defined EC2 as Cloud Processing, which is only a piece of the larger picture. There are lot of moving parts and today some aspects may seem tedious, but in the near future, these will go away. Just like assembly a PC was more tedious than hooking up a terminal to a mainframe!

    Cloud Software is a new way to build and deliver software and there is no doubt in my mind that it is about to bring a fundamental change to our industry.

  3. there seem to be some words missing “For consumers, this is generally [blank]“, 2nd para.

  4. Thanks. I fixed it.

  5. I agree with the first commenter that some companies may want to simply stay out of the loop of managing their data and worrying about running servers. However, I would definitely want some type of control over my data. A SaaS could provide backup of data all day long, but what type of data backup are they doing? A huge factor for me in deciding to use SaaS or Cloud software would be what type of data portability they offer. I don't think it would be smart to build your business on just any platform. What happens if the company increases SaaS prices? What happens if the cloud software company decides to stop updating software? Or what if a new software comes out that has a ton of better features? I don't want to be locked in to something ever.

    Data portability is king. If I can pull ALL of my data out and import into something new within hours, I'd be willing to give different solutions a shot. I don't like when SaaS companies and Cloud software don't offer any way to transport data out. In my opinion, this should be the number one feature on any SaaS or Cloud software.

  6. Does Mindtouch has a cloud version for Force.com cloud…?

  7. Hey Steve thanks for the post. The only thing I would say is that all software companies own the data and decide how it gets released to consumers this is not just a SaaS issue. If you have traditional or even Cloud software you only get to decide where it is stored and how it backed up but you still only have a license to use it and are restricted by the software as to what you can have access to. Many SaaS operations use Cloud hosting and backup systems so again the SaaS is in the cloud. I agree more with Thoreston in that all software companies need to find ways to do data dumps for their users, this would allow them to switch software providers easier, not an advantage to the vendor but it is what consumers want and even Clod software will not do this, yet.

  8. I agree wioth previous comments but I think that the big difference between Cloud and SAas is provisionning and dynamic implementation of services. I explain: Saas is more like a static way of using application localised on a remote provider. Demands of changes are complexe could be lenghty and costly. Cloud will provide Dynamic changes from any providers. I agree that software providers switch is important for consumers but evolutivity is also a key point that Cloud will allow easier than Saas.

  9. Good Site on Cloud Computing and SaaS – We are periodically looking for good blog information
    related to SaaS. Will be back to review more information on your blog.

    Keep up the good work!


  10. Hello, I am getting up to speed on a lot of these technologies and just wanted to join in the group and say hello! I am especially interested in Cloud, SaaS, and integration technologies. I am understanding all of these as a "layman", and am involved on the sales and Competitive Research end of these technologies, so anything of interest that you may have I would love to read! Thank you all!

  11. I am researching web based software for school and am presenting on the site TimeTrack.com
    I found this site after further reading into their website and I did not understand what they meant when they said "Saas software that delivers high throughput instant appointment scheduling services in the cloud."
    I have read through this entire page and feel like I have an idea, but do not understand how they work together…

  12. I think that some of the beauty of the SaaS and cloud computing model is that you can move without a huge expence. The data thing though, I am still trying to work through. With an SaaS model the data commonly resides with the software, in the cloud. With Cloud computing the data resides… in the cloud with the software. Excuse me if I am reading something wrong here but it sounds to me like you are saying that the data that you generate is somehow controlled defferently in a Cloud and an SaaS model. I think control is still in the hands of the service provider, whether you have an SaaS or a cloud model. I think more of the difference lies in the Infrastructure. With SaaS you still need smart machines, to a point, and with the cloud model you can use an iPhone or some device that has limited on-board capabilites. And that is where I think things are heading. No disrespect intended, I was just a little confused. Thanks for the post.

  13. Just came across this blog and I like this explanation. We're just entering the SaaS space, and I think this distinction is an important one to be aware of and acknowledge to our customers.

    Thanks! I'll keep reading.

    Steve Harding
    Symphonic Source http://www.symphonicsource.com http://www.dupecatcher.com

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