Cloud Computing: SaaS, PaaS or IaaS

OpenView Venture Partners, along with other venture capital funds and of course the media, are helping to push the phrase ‘cloud computing’ to the mainstream. Salesforce.com was instrumental in coming to market in a big way with their software-on-demand CRM product several years back. Simply put, cloud computing is a way that applications, software and services are available to an end user via a web browser. Most businesses and consumers interact with cloud computing on a daily basis and may not even realize it; Gmail, Facebook, Twitter are all examples of cloud computing. The next level in cloud is breaking it down to three separate distinctions — Software as a service (SaaS), Infrastructure as a service (IaaS) and Platform as a service (PaaS)

So what’s what, and what can you or your management team use?

Here is a breakdown of the three distinctions:

SaaS:
Think salesforce.com or google apps. SaaS allows users to have a network based solution that can be centrally located and accessed through a browser. It essentially replaces the need to download and or install software on your own network or other infrastructure. There are some hesitations in adoption here due to security issues — a company’s data is held under the provider’s watch possibly shared with other company’s data.

PaaS:
Want to build software applications, but don’t want to deal with purchasing the hardware and related infrastructure (operating systems, servers, etc)? Then PaaS might be for you. PaaS allows you to manage an entire build ecosystem of designing/building web apps without worrying about the overhead. One of the benefits to PaaS is that you only pay for what you need, no more, no less. Force.com, Rollbase and Bungee Connect are all examples.

IaaS:
That leaves us with IaaS, which is the base layer to all of this. Users can again pay for what infrastructure they require. When a company of IT department wants to outsource and host their data in a virtual world then using something like Amazon’s EC2 cloud is the way to go. Most anything can be run in a virtualized environment with a IaaS, offering massive flexibility. This can be especially helpful to SMBs that want to keep their infrastructure costs low and scale quickly (no hardware to own makes it easy to adjust); not to mention the access to enterprise grade IT for a “pay as you go” model.

It is important to remember, however, that there are aspects (security, as I mentioned) of cloud computing still being worked out — but it has brought efficiency, scalability and cost savings to the masses.

Peter Zotto
Peter Zotto
GM

Peter Zotto is the GM at Price Intelligently. Previously he was an analyst at OpenView where he helped to identify qualified investment opportunities.
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