Cloud Computing vs. SaaS Salesforce.com is a successful SaaS company that has taken the idea of mass cloud customization to new heights with their Force.com platform which allows for one-off programming and scalability as needed.
The short answer is this… Mass cloud customization computing is more natural, more flexible, and offers more potential for competitive advantage than in the wildest dreams of SaaS, because cloud computing is built on Web services that are a) inherently abstracted, b) independent components and c) accessible at every layer of the technology stack.
A previous post on this blog detailed the difference between SaaS and cloud computing. I argued that, while both technologies deal with online applications of some sort, there is a key distinction: most people’s experiences with SaaS involve web-based software for human users (e.g., Websites), whereas in cloud computing one deals primarily with programming components used by other computers to deliver services over the Internet–in essence, Web Services are more “Cloud” than they are “Web.”
The Role of Meta-data in Mass Customization
Mass customization in SaaS is achieved by converting hard-coded application functions into meta data configuration settings.
For example, multi-tenancy converts hard-coded deployments of multiple customer databases into a single database infrastructure where each customer deployment is identified by a unique customer ID.
All the technical miracles that distinguish one customer’s data from another customer’s data are abstracted to this single piece of meta-data to enable data-driven functionality like Customer[1].Name = “Company X” and “Customer[2].Name = Company Y”. Voila! Mass customization = meta data abstraction of functional capability.
More Natural – The Inherent Abstraction of Web Services Mass cloud customization is more natural to cloud computing vs. SaaS for one simple reason: meta-data abstraction is inherent to Web services, but it is optional for websites.
SaaS applications must be carefully architected to enable mass customization at all, i.e., it is a matter of good SaaS application design discipline to employ a multi-tenant database, configurable security settings, customizable page views, etc. In contrast, every function of a Web service is inherently abstracted to meta-data in the XML inputs and outputs of the API.
Cloud Computing vs. SaaS
The Xignite stock quote Web service can return a wide variety of information such as the current stock price, an intraday stock chart, and financial news that varies by the stock symbol (meta-data) supplied to it.
It turns out that not everyone is motivated by a paycheck.
For example, if you have Company X as the company who needs financial information about itself on its website for potential investors. Then the company has an application where they provide in-line stock quotes for companies discussed in their news stories to people reading those articles.
It would be difficult to build this degree of customization into a single end user SaaS (Software As A Service) Web app because there are two completely different applications built from one web service.
More Flexible – Independent Components vs. Monolithic Applications The stock quote example above also demonstrates the flexibility of enabling mass cloud customization through independent components over that of a monolithic application.
Changing a single feature from hard-coded to configurable in a SaaS application can require modification and refactoring at every layer of the software stack from the database structure to the user interface, e.g., adding user-defined custom fields.
Moreover, the introduction of new configuration settings can have a multitude of known and unknown impacts on existing and seemingly unrelated features, e.g., changing an address format from a standard US postal structure to a configurable structure that better supports international clients. The result is that even the simplest modifications to a SaaS application must be carefully considered and become more difficult the more complex the application.
Web services are self-contained components that can be added to or taken away from with little impact on other Web services.
For example, I use Google’s charting service for my SaaS Model Scorecard because it has more options than the Microsoft Office Chart function in Excel. If they want to add new charts types into their system, all they have to do is create a new value for “cht” and any other relevant parameters without having too much of an effect on anything else.
One reason why a customer might prefer this type of SaaS is because it allows them to build their own website or application from components that they can choose. This also means you have less time and money wasted on building the wrong thing, which has been an issue for many companies in this industry.
Wildest Dreams – Morphing Applications and Infrastructure, not Just Features Imagine building a SaaS application that could magically morph from CRM to ERP through configuration settings. The complexity of building such an application is staggering, not to mention the subsequent configuration. Again the Force.com platform comes to mind. Now consider cloud computing. Let’s say I store the respective CRM and ERP application executables on Amazon S3. And, I create a Web service with two calls: gimme CRM and gimme ERP. When I log in, I select ERP or CRM. This Web service automatically downloads the specified application and instantiates it on a farm of Amazon EC2 virtual server instances, where it can be accessed from the URL http://www.elastic_crm_or_erp.com. This neat trick is possible, because Web services allow mass cloud customization at every layer of the software stack. In this particular case, the configuration reached down below the application layer itself to the O/S and swapped out the entire application. From the user point of view, I just magically see my website change from ERP to CRM. This approach is really overkill for this simple example, but it makes clear the ability of cloud computing to handle meta data driven, ad-hoc modification at any layer in the technology stack. It could just as well be accomplished at a much higher level in the stack using two SaaS applications and a single sign-on…uh, Web service.
Mass Cloud Customization and Competitive Advantage in Cloud Computing Although cloud computing offers greater potential for mass cloud customization than SaaS, cloud computing does not really compete with SaaS. Amazon AWS and Force.com are unlikely competitiors, because they segment the market into the high-end and low-end of mass customization respectively, and customers will choose one or the other according to their requirements.
Cloud computing is an on-demand service that offers many of the same benefits as SaaS, but it does not compete head to head with SaaS. Cloud computing competes for components at every layer of the technology stack from storage to user interface and therefore architecture becomes a crucial element in adoption decisions. Adopters must rethink how they build applications using interchangeable components which may or may not exist within their own firewall. To help overcome this barrier cloud providers should leverage mass cloud customization by offering customers orders of magnitude improvements in functional versatility, deployment flexibility and infrastructure elasticity alongside lower TCO.
