OPINION
Can SaaS and Cloud Computing Be Location-Independent?

In my last commentary in this space, I suggested that there was plenty of room for enterprises to build their own private clouds to satisfy their specific business requirements. I'm increasingly convinced that today's technology is making it possible to make cloud computing and Software as a Service (SaaS) solutions location-independent.

The idea of private clouds, as well as deploying "hybrid" SaaS solutions behind the firewall, has become controversial among many cloud computing and SaaS zealots who believe that this approach compromises the fundamental value of today's cloud computing and SaaS capabilities. They argue that one of the cornerstones of the cloud computing and SaaS movements is that they enable users to share resources via the Web, eliminating the need to house systems and software in their own data centers, thus avoiding hassles, reducing costs, and accelerating deployment and time to value.

While all of these value propositions are proving to be true, there is no getting around the fact that for many real and perceived reasons, various organizations would prefer to rely on their own data centers to perform certain aspects of their IT operations.

Not an Either/Or Proposition

To listen to some SaaS proponents and cloud computing advocates, you would think that we're rapidly heading toward an either/or world in which IT and business decision-makers will be forced to make a choice between the inefficiencies of their legacy systems and software, or the new generation of on-demand Web-based alternatives.

I believe a third wave of location-independent on-demand solutions is building, and that it can give many organizations the best of both worlds.

Technology advancements already make it possible for a growing number of SaaS and cloud computing vendors to offer fully contained appliances that are deployable behind the firewall to mitigate customer concerns regarding service availability, data security and privacy.

By putting the SaaS or cloud computing solution into a "lockbox" that can be deployed wherever the customer prefers, vendors can alleviate customer concerns and substantially expand their addressable markets.

A growing number of SaaS vendors, including Google (Nasdaq: GOOG), are already allowing customers to download their applications so they can work offline and, in some cases, even maintain their databases behind their firewalls. LongJump and Intalio are offering development platforms that permit users to access their solutions on the Web or deploy them on their premises. Boomi and Cast Iron Systems are doing the same thing with their integration tools. These vendors, and a growing number of business application SaaS providers, are recognizing that they must give their customers various deployment options in order to satisfy their varying needs.

However, there are still many vendors who are deceiving themselves and their customers into believing that simply hosting their old legacy applications or systems can satisfy customers' escalating requirements. There is more to this new generation of SaaS and cloud computing solutions than the fact that they reside on the Web.

No Tampering With Code Base

True SaaS solutions must also deliver greater value as a result of their better ease of use, more flexible pricing, continuous functional enhancements, real-time analytics and data aggregation capabilities, which can be used for more meaningful benchmarking purposes. These attributes clearly set real SaaS solutions apart from legacy hardware and software that is simply being hosted by a vendor offsite.

The key to the location-independent go-to-market strategy is locking down the code base so customers are unable to substantially alter the solution. This ensures that the vendor is not supporting multiple versions, as was common in the past but proved to be an inefficient model from both the vendor and customer point of view.

If the vendor can design its solution with these controls in place, and the customer can accept these constraints, the technology is available and the business models are rapidly evolving to make location-independent cloud computing and SaaS solutions a reality.

The question then becomes, as I suggested in my previous column, does the customer truly need to have its SaaS or cloud computing solution on-premise to achieve its IT or business objectives?