The concept of cloud computing has existed since the age of computers and networks was still quite young, and although the term seems relatively new, people have actually long been experiencing the benefits of cloud computing by booking airline tickets online and using Web-based email, such as Hotmail or Yahoo!. Recently, however, cloud computing has been the hot buzzword for marketers and business executives, often during the subject of customer relationship management, or CRM, since cloud computing, though still in its infancy, has had had a dramatic impact on this aspect of business. Yet among consumers, there is some confusion between the term cloud computing and another term that seemed to have sprouted like a limb from cloud computing, SaaS, or “Software-as-a-Service.”
Cloud computing makes it possible to use an application, store information, communicate, and access that information from any Internet-connected point and device, using an interface that is operated remotely. No software or hardware on the individual’s computer is needed to operate the software. Instead, a network of computers and/or database storage systems, or some other infrastructure combination both outside of and fully connected to the Web, operates the software and stores user information. The only thing the user needs is Internet access and a Web browser, and the cloud’s network handles the rest. MySpace and Facebook are two social media examples of cloud computing. Users may create accounts, build profiles, add and communicate with contacts, upload photos, type status updates, and share information, without downloading or installing any software or hardware on individual computers. Cloud computing allows the users to log in to their accounts and access the information from any Internet-connected device—the interface and information is always the same and always automatically reflects updates and changes for all users.
SaaS, or software-as-a-service, is a term that has evolved from cloud computing. Some marketers and users have erroneously used this term interchangeably with cloud computing, and while both share a concept and provide advantageous implications in the way of customer relationship management, these terms are not interchangeable. Cloud computing can be thought of as the bigger picture, the umbrella under which recent technological developments, like those of SaaS, have been underway. Think of cloud computing as the broad concept of using the Web to permit people to access technology-enabled services. Facebook and MySpace are ways to take advantage of cloud computing, but they are not technically considered SaaS. SaaS solutions are more specific, and often geared toward improving business efficiency as well as customer relationship management.
SaaS, while falling under the category of cloud computing because of the characteristic of being “massively scalable,” has other distinct factors. SaaS is software owned, delivered, and managed remotely by one or more providers, which permits use of the software application in a one-to-many environment, either by a pay-as-you-go billing system, or as a subscription. SaaS provides businesses with remote software solutions, and a growing number of businesses, particularly small to mid-size businesses, are taking advantage of the benefits of these on-demand applications. Some businesses use SaaS applications to develop their own solutions or integrate multiple SaaS solutions together. SaaS has played a major role in customer relationship management, revolutionizing this aspect of business.
Although most people associate SaaS with independent on-demand applications, SaaS alternatives actually exist now for almost every software application category.
Cloud computing and software-as-a-service are both innovative and efficient alternatives to traditional server-based software systems, and can help an enterprise, no matter how large or small it may be, or what industry it’s in, to revolutionize the way it conducts operations.
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