Scaling with cloud computing and SaaS

October 20, 2009
By djohnson

Both cloud computing and SaaS (software as a service) deliver the ability for companies to scale resources on-demand.

SaaS scales applications. In the SaaS world, companies can scale applications. Because SaaS implies outsourcing, this means that the SaaS provider can easily scale application(s) that they manage for customers. Savings are obtained by aggregating computing patterns across multiple customers.

Clouds scale computing resources. In the cloud computing world, companies can scale computing resources. Unlike SaaS, clouds can be managed internally (private clouds), externally (outsourced clouds), or using a combination of internal and external clouds. Savings are obtained in two ways – first by aggregating computing patterns across applications and second by aggregating computing patterns across customers (external clouds).

Relating this to Accounting, ERP, and CRM

When looking at accounting, ERP, and CRM applications, we agree with Larry Augustin, CEO of SugarCRM, who in a recent blog post in SFGate says “the need for data ownership, control, customization, and integration with core systems will drive the need for private clouds.” He goes on to predict that “Cloud computing is obsoleting SaaS as defined by Salesforce, NetSuite, and single-vendor solutions.”

Recommendation

For applications such as ERP which may require customization and compliance with regulations, select an application that is built to be run on internal and external clouds. SaaS is a great option, but make sure that you do not get locked into a single vendor which will limit your options in the long run.

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