Well, almost everybody does some mistake while comparing the three - Cloud computing, SaaS and On-Demand. It is important to understand the difference between the trio - SaaS, cloud computing and On-Demand, as without a clear picture incorrect decisions could be made and indeed decision-makers could find themselves assessing the viability of future projects based on incomplete or incorrect knowledge.
Evolution of Cloud and SaaS
There is no doubt that Cloud Computing has evolved from successful predecessors like Mainframe, Client Server Computing and Virtualization. In fact, Seema Ambastha, Director - Technology, VMware India, opines, “Most of the customers are in the first stage of the cloud journey. Virtualization is a catalyst to cloud the stage where most customers are in.”
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According to a report by Ernst & Young, over 72 per cent of India's IT infrastructure companies will adopt cloud computing in a big way over the next two to three years. The report also says that virtualization is going to be the first step in cloud computing strategy and this has been observed as a trend across all datacenters. Many companies in India are rapidly evolving towards cloud computing, though from different starting points. Software-as-a-Service (SaaS) is the most predominant type of cloud computing and people use the term interchangeably with cloud computing. On the face of it, SaaS and Cloud Computing are very similar. It sits in the cloud; it means that the SaaS needs the fundamentals of the Cloud Computing to exist but Cloud Computing is a bigger canvass. As Amit Sinha Roy, VP of marketing strategy at Tata Communications sees that ever since web-based salesforce.com proved that a rental-based model for software works successfully, SaaS became a buzzword, across the world. Over the last few years, India has seen the entry of several SaaS players, primarily serving the SME segment. The reason why Cloud is considered to be a synonym to SaaS is because in India most of the companies began their Cloud journey with SaaS. While it is still early days for IaaS offerings in India.On the contrary, Ramesh Rajamani, Senior Business Development Manager, India, Hitachi Global Storage Technologies, sees India at the similar stage as global when it comes to Cloud adoption for storage though the adoption rate is little slow. Hitachi GST with its latest Touro Mobile Pro is offering local and cloud backup through its portable storage drives.
Cloud encompasses several variations of service models (i.e., IaaS, PaaS and SaaS) and deployment models (i.e., private, public, hybrid and community clouds). Many companies are now exploring to use cloud computing and SaaS solutions in an effort to control cost from the recent effect of the economic downturn. “They discovered that these technologies - ranging from collaboration services such as Cisco WebEx to online application suites like Google Apps and Zoho - not only help them to improve their bottom line, but also allow their workers to share ideas and complete assignments more efficiently than ever before,” informs Rajesh Rege, Sr. Vice-President - Data Center, Cisco India & SAARC.
The penetration of broadband internet services to a critical level has been the cause for progress of Cloud Computing. According to Gartner, cloud computing is a way of computing which provides dynamically elastic and massively scalable IT services by using internet technologies. Similarly, SaaS is also extremely scalable even with multi-tenancy providing one-to-many mapping structure.
According to Mayank Kelkar, Solutions Consultant, IMS Practice, Tech Mahindra, “India has been a test-bed for many new technologies in terms of adoption and development. We have already seen successful adoption of Software as a Service market in India as many SMEs are already using CRM, Email and other enterprise-class services for a long time now. Many global companies like Amazon, IBM ,Google and Microsoft have made their foray in the cloud market in India and at the same time Indian IT service providers such as Tech Mahindra, Mahindra Satyam, TCS have also created their Cloud competency units to cater to their customers in India and abroad. Cloud products from companies like Airtel, Reliance and Tata Communication have also launched. This will bring a total new dimension to the IT market.”
What is On-Demand?
On-Demand is a family of SaaS solutions that simplifies Windows management tasks without the need for traditional software deployment and maintenance. You save time and money, while reducing risk. As Bobby Mon, Head - Enterprise Business, SMB, Dell India, defines it, “On-demand is just a way of providing cloud services.”
If Cloud computing has three segments IaaS /Saas/PaaS, then On-demand means all these services available as and when demanded. Industry claims that Cloud and On-Demand are very closely linked, as Cloud is a mode of delivery of a solution, whereas On-Demand is a mode of consumption of the solution.
Giving a contrast, Rajeev Asija, COO, HCL Infosystems, explains that when an organization has a requirement for storage delivered on the Cloud, and the offering is accessed by employees on a case-by-case basis and charged suitably, that is an On-Demand. The great strength of the Cloud delivery model is that On-demand access and billing is built into the solution. “On- Demand services can also be delivered without the cloud, e.g. On-demand print services, where the organization is charged on a per copy printed cost, this can be an on-premise solution and does not really need a cloud delivery model,” he adds.
One way to look at it is that Cloud is a “platform”, i.e. computing power on the internet and on-demand is a “model”. So a service can be based in the Cloud, e.g. a datacenter in the UK, and sold on-demand per user per month. “On-Demand is one of the characteristics or properties of the cloud. Users expect that the cloud will enable on-demand delivery of any of the services such as SaaS, IaaS or PaaS. So, in that sense, your question has to be rephrased to 'what is the relationship between cloud and on-demand services?'”, said Ramshankar, Head - Strategic Programs, Ramco On-Demand ERP.
Market and Target customers
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First, there was the hype, but today cloud computing has moved beyond the initial buzz into the mainstream and is gaining significant traction among companies. Businesses are realizing that the ability to respond quickly, efficiently and strategically to market dynamics is heavily dependent on innovation driven by IT management. This will help Indian enterprises save as much as 50 per cent of the cost of IT operations and generate one lakh jobs by 2015, said a recent study. Sharing an interesting Compuware's recent global survey of 677 businesses across North America and Europe, Neeraj Dotel, Managing Director, Compuware India Ltd., revealed that poor performance of cloud apps had a direct impact on some organizational revenue, with businesses in North America “losing on an average almost $1 million per year because of the poor performance of their cloud-based applications and in Europe, more than $0.75 million. “So while Indian organizations are beginning to leverage cloud attributes, be it private, public or hybrid clouds, the rest of the world is beginning to demand cloud performance and availability.”
Cloud is a market for those who want to focus on their core business, and leave the responsibilities of the IT tools to the specialists. A cloud is more of an implementation concept than a meaningful description of the type of services provided. On-demand service can be provided using a cloud, a supercomputer or a grid. Going forwards, it will not be that important which technology provides the information, but that the information is there available with the flip of a switch.
With a powerful ecosystem of over 1,300 independent software vendors (ISVs), 1.4 million developers and more than 11,000 system integrators (SIs and Custom software development organizations), India is ideally poised to address this growing opportunity and more and more companies have begun to adopt one or the other models of cloud computing available.
While organizations have started adopting cloud computing, the hybrid cloud model would be the most ideal for businesses. A hybrid cloud is aimed at providing users a cloud infrastructure which is customized to their requirements, making use of the features of both a private and a public cloud. HP's cloud solutions allow organizations to build both private and public clouds. They also provide a common automation and management layer to manage those services no matter where they are sourced from. HP Enterprise Cloud Services-Compute enables organizations to consume their technology, as needed. The service bundles server, storage, network and security resources and clients pay only for the technology needed to run core applications and business processes.
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Ramandeep Singh Walia, Head - System Engineering, Check Point India & SAARC, shared that Check Point is part of Cloud Infrastructure with security as a core domain. “As of now, we don't offer Security as a service On-Demand. But by the end of next month, we would be announcing On-Demand service model also.”
On-Demand, SaaS and Cloud Computing overlap, as discussed above. But there are certain elements that cause some differences:
Personality difference
SaaS ensues when an application is provided as a utility on-demand, whereas Cloud Computing happens when all computing is provided as a utility on-demand. SaaS essentially is the part of Cloud Computing.
While On-demand may be for a short period, Cloud is typically a long-term contract from 3 to 5 years engagement. On-demand is a subset of cloud. The cloud computing model has security and access as an inherent component in its build. However, in the case of On-Premise On Demand solutions, security is probably not that robust.
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As stated, cloud adopts the functionalities of on-demand services, but is not same as on-demand services. About differences, Desi S. Valli, COO, Net4 India Ltd., opines, “On-demand services delivers you a service that is specific in nature - for instance, bandwidth on-demand.”
Functional Difference: Charges and Ownership
The critical difference between the two lies in the data ownership and pricing models would vary between on demand and cloud. While On-demand will typically be for some infra solution, Cloud is typically for a service to run part of business. Google docs, Gmail, Yahoo mail, etc. are all examples of SaaS. They are available as free services, but the entire data resides in the servers of the service providers. Cloud computing is about your data and applications being stored remotely and accessed over the Internet. With SaaS you do not own the data. Thus, with SaaS data ownership and security definitely, are big concerns, but those risks are not grave enough to outweigh the benefits of SaaS, especially for startups and SMEs.
On-demand services tend to be clock based, on use based. For instance, you demand a service between specific time not based on specific use. Instead of having it stored on your IT infrastructure, it is stored on the cloud service provider's IT infrastructure. On-demand, on the other hand, is a mode of delivery of IT. This means that an organization uses only that much amount of IT resource that it requires and pays a corresponding fee for using it. It can choose to increase or decrease its IT resource usage as per the requirement and the IT service usage charges scale up or scale down accordingly.
On-demand services are generally a specific need. For instance, if you have taken power in an event location (exhibition hall etc.,) you may activate and deactivate your power depending upon the event schedules. But when it comes to cloud services, the usage is completely reversed. It is something like you do not even own the exhibition hall, and you get everything from space to power to bandwidth to people, as a service. The formation of cloud is to exhibit not to own the exhibition, so one only lease as and when it is required. In case of Cloud Computing, you have the control over the servers where your data and software applications sit. The entire cloud computing infrastructure allows you to take backups, make data repositories and store data in the cloud. In this case, you have complete control over the data storage and cloud computing gives you freedom to move your data off the cloud too, should you need to anytime in the future.
Finally...
In general terms, cloud computing indicates anything that involves delivery of hosted services over the World Wide Web. The cloud is being looked at as a very new and promising technology for Indian businesses, particularly for small and medium sector. However, across the board, there is a lot of excitement and keen interest in getting to know what cloud is all about and how businesses can harness the power of cloud for their betterment.
It seems you can't be selling IT services these days without a cloud strategy. As everyone has got his eyes on it, every vendor comes out with a Cloud offering from storage to security on their brochures. The cloud, as it is widely understood, is all about only using computing services as you need them, the claim being that it is a more economical model (whether it really is disputable), besides its many other advantages. Using the on-demand term is much narrower and speaks of only one possible advantage offered by the cloud.
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Moorthy Uppaluri,
Microsoft India
We see early adoption, as decision makers are still evaluating the most comprehensive model of cloud computing adoption that would align with their business goals. Our cloud services have already received an overwhelming response in India. For example, our Business Productivity Online Suite (BPOS) offering launched last year already has more than 1300 customers on board in India, with partners such as HCL, Wipro and Infosys providing value added services. Academic institutions such as the IITs and IIITs are also building large India-relevant projects leveraging Microsoft’s Azure platform. NIIT alone will train over 100,000 students on Windows Azure over the next three years.
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Rajesh Rege,
Cisco India & SAARC
Cloud is a new computing paradigm wherein IT resources and services are abstracted from the underlying infrastructure and provided on-demand and at scale in a multi-tenant environment. On Demand services is a key attribute or benefit of the cloud infrastructure.
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Seema Ambastha,
VMware India
Cloud is the remotely located IT infrastructure using which cloud service providers, offer compute, storage and software/applications as a service to consumers. These services may be delivered on a pay-per-use or fixed rate model. This means that while an on-demand service can be a cloud service, a cloud service is not necessarily on-demand. An organization can have a fixed amount of IT resources being delivered from a cloud, or it could have IT services being delivered on-demand wherein the service scales up or down as per the organizational needs and be charged according to the use.
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Bobby Mon,
Dell India
On demand means immediate resource access when a person or a business needs it i.e. only gain access to cloud based resources on need basis and only pay for the demanded use. This usually results in complex billing. In other words, on-demand means having any/ all those services available to you ‘on demand.
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Ramshankar,
Ramco OnDemand ERP
OnDemand is useful when there is peak-valley usage pattern. In Human Capital Management, usage of HCM software peaks at the end of the month, when Payroll is processed. At other times, it is low. Thus, it lends itself to the OnDemand paradigm. Whereas Cloud is useful for all. IT is not a strategic cost in most businesses. Why pay good capital for IT when it is available as a service?
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Amit Sinha Roy,
Tata Communications
Though, both are Cost effective - Opex business models, still quick automated service provisioning via 24 x 7 portal access is possible with cloud better.
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Mayank Kelkar,
Tech Mahindra
In the long run, both cloud and On-demand services will have their own markets. Cloud services will be explored and adapted by SMBs and even by large scale businesses. However, On-demand services will be used more by IT departments of companies to reduce cost and time required for high capacity, capital-intensive hardware and software procurement and provisioning. If an organization wants to use a hosted email as service it would adopt the Cloud Computing products available in the market. However, if the organization wants to use a middleware platform as service for a specific set of IT requirements determining needs by the hour, then it could very well go with On-demand model.
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Santanu Ghose,
HP India
Most enterprises want to move to the cloud for not only the great cost advantage that it offers, but as also it enables organizations to increase their load handling capabilities as required. Further, it also facilitates the increase in the speed of service delivery while bringing down the go-to market time for solutions. As IT cloud services enter a period of mainstream use, this is the critical time to develop strong cloud strategies and play a leadership role in taking advantage of the potential of cloud computing.
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Rajeev Asija,
HCL Infosystems
The cloud computing model has security and access as an inherent component in its build. And if there are On-Demand services offered over the cloud, then they draw on the security features provided by the cloud delivery model in use. However in case of On-Premises On Demand solutions, security is probably not that robust. Both inherently need each other to grow, as mentioned earlier, One is a delivery model and the other is a consumption model.
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Ryan Perera,
Country Head, Global Field Organization,
Ciena India.
One of the key attractiveness about the Cloud computing model is in its cost and tariffing structure such that the total-cost-of-ownership of delivering applications to Enterprise subscribers is based entirely on a per-subscriber usage model, rather than the traditional model of owning & maintaining computing resources, hardware & software associated with an Enterprise application. Thus, really the biggest similarity between Cloud computing and On-Demand services is in the Pay-as-you-use model.
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Syeda Beenish
beenish@varindia.com
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