Posts Tagged SaaS

Cloud Computing Overview

Till a few years ago, if you wanted to run something on the Internet, either to provide service to the public, or to your own employees, you would do one of the following:

  1. Your own in-house Datacenter: You put your servers in your data closet, bought a T1 or T3 link from your telco, and published a DNS name for your service (, for example)
  2. You could rent a full/half/quarter rack from a co-location facility such as Exodus of the past. Load up your own servers, install your server OS, install your Applications, install your firewall etc. and run your service

The principal reasons for renting space in a colo rack were:

  • Good electricty (Dual power sources + UPS, for example)
  • Good network connectivity (fiber connection to Sprint, ATT and other backbone networks)
  • Higher bandwidth for a lower price ( T1 is 1.544Mbps to your own data closer and may cost you $500/month, versus a $350 10Mbps link at the colo with capacity to burst upto 100Mbps for at most 5% of the time)

Setting up and getting going in a colo was, and continues to be a pain. It could involve a multi year contract, and some upfront setup charges.
Fast forward to today, and the colo scenario has been replaced by Cloud computing. Cloud computing consists of the following different types:

  1. Infrastructure As A Service (IaaS) – rent virtual machines from the Cloud Service Provider, and run (almost) any software (OS + Apps) on it
    • Example: Amazon EC2. Smallest VM is 8.5cents an hour ($744.60/year)
  2. Platform As A Service (PaaS) – rent capacity on An Application Platform to run your application. You do not get to choose the OS or hardware, and the application environment is usually very restricted. Google App Engine, for instance, requires you to write brand new applications in a language called Python
    • Example: Salesforce’s and google’s Google App Engine
  3. Software As A Service(SaaS) – you rent an application. You do not get to choose hardware, the Operating System, or the Application. You just buy ‘functionality’.
    • Example: WebEx. You purchase the capability to run web conferencing.

All of the three cloud compute options bring about an ease of use and low barrier to entry for customers that is an astounding improvement over the colo scenario of years past. Billing by the hour of use, pioneered by Amazon’s EC2 service, makes it very easy for customers to try out software, and develop on the cloud.

Advances in Cloud compute technologies are encouraging people to outsource their own datacenter and its operations to the Cloud. One step in this migration may be to run Cloud compute software in your own datacenter, and then move suitable applications to the public cloud.


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