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Cloud Computing...How To Choose

Date: April 19, 2012





When a company is choosing which distribution operation to use for their cloud software app, there are two options:

  1. Software-as-a-Service (SaaS)
  2. A Hosted Solution

SaaS provides a software application that is located on a remote server via the Internet.  A company rents this software by paying a periodic subscription fee.  It is very common that the company will be sharing this SaaS application with multiple users, which is also known as a “Multi-Tenant” situation.  Since this software is shared among many users, it has a set of common code. 

SaaS is known to be popular with companies that are just getting started with cloud computing because you cannot do customizations in a SaaS.  The most common type of company utilizing SaaS is a company that has low to medium volumes or has a simple operation with a limited number of users.  Companies with tight information technology budgets are also good candidates for this approach.

On the contrary, with a Hosted Solution, a company sets up the software application on an Internet-based server.  This server is run and maintained by an outside vendor.  The vendor owns the hardware and provides the support, but it is considered to be a private cloud for the company or “Single-Tenant” situation.  It is important that the company request the definition of fees up front for a Hosted Solution, especially if the charges will be based on transactions or period of usage. 

A Hosted Solution allows for flexibility in configuring the application to meet a company’s unique operational needs.  Therefore, it is the better choice for companies that are expanding or becoming more complex. 

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