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Published on November 10th, 2009 | by Isaac Garcia

Cloud versus Saas? Who Cares? I’ve Got My Reasons

Cloud vs. SaaS – the Endless Debate

[modified post as a result of a comment I left on Ben's blog; please forgive the redundancy.] 

The endless debate between Cloud and SaaS.  I want to weigh in as a
result of Ben Kepe’s recent blog post titled, “Is the Cloud Going to
Kill Conventional SaaS?
”  

While I totally agree that we should not be dogmatic about whether
one is “better” than the other, that shouldn’t dissuade any of us from
stating some hard proofs of success in a SaaS environment (not Cloud). 

At Central Desktop we run on our own private multi-tenant SaaS
platform. Essentially, our own private “cloud.”  I put “cloud” in
quotations because we don’t think of it as “cloud” – we think of it as
“our stack.”  Over the years, we’ve continued to evaluate Cloud vendors
as potential delivery options for our point solutions to our customers
– but the economics haven’t justified a switch.

What is often overlooked by SaaS pundits is the fact that
connecting to a Cloud very often reduces (sometimes eliminates) key
features that a private SaaS vendor can provide. For example, we looked
hard at augmenting our file storage with cloud storage via Amazon (and
a few other vendors) but decided against it for two main reasons:

1. Vendor Economics.

Yes, economics. The transactional access of
files and data that our customers require as active collaborators was a
very expensive alternative. Remember, we are talking about Terabytes
and Terabytes of data that we host for our clients. Sure, Cloud
storage/services are cost-effective for nascent startups trying to save
money ( I get it…I really do), but once you develop into a serious
business with lots of paying customers with high transactional needs,
Cloud becomes more cost prohibitive than one might imagine.

2. Feature Reduction.

Moving hot data to the Cloud resulted in
slower performance and a reduction of features such as the inability to
easily provide value-add features such as full-text search for
documents stored in an off-site Cloud. The bar to provide certain
features “in the cloud” was more expensive than it was for us to “do it
ourselves.”  [Yes, I know its possible to provide full-text search, but
it wasn't "easy."]

I agree that we shouldn’t be dogmatic, but the economics of cloud
storage and delivery have been prohibitive to us and our customers for
the reasons listed above.

As a pseudo-cloud pundit myself, I’d also argue that the “open
platform” and data portability that Cloud vendors promise their
customers is still hedged with the “single point of failures” that we
continue to see in Cloud vendors (virtually all of them have
experienced extended outages with their customers wondering “what is
going on?”).

At least when we go down…..we know why, we are in control of the
situation and we can fix it ourselves……and we can tell our customers
what is happening/going on. Luckily, we don’t go down very often at
all: http://status.centraldesktop.com

Will we someday surpass the ability to efficiently and cheaply
deliver our SaaS’s to our customers on our private stack? Perhaps, but
we’ve also found that our homegrown architecture enables lower cost of
goods and is becoming more and more of a competitive advantage when we
look at many of our competitors.

Our own core competencies of managing our own stack (er, “cloud”)
enable us to deliver high value to our customers at affordable prices
that are not contingent on a 3rd party vendor’s “usage rate.”

Long live profitability!

If you enjoyed this post, you might always enjoy: 

Are you Over-SaaS-y?

Google’s Silent Monopoly Redux (Or How Much Does Google Pay for its Own Adwords?) 

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About the Author

Isaac Garcia

is CEO and Co-Founder of Central Desktop



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