March 9, 2009

Clearing Up Cloud Computing Vs SaaS for Database Marketers

While “cloud computing” and “software-as-a service” are not new ideas by any means, it seems as if these terms are popping up more and more when we talk about Enterprise Marketing applications – so what do these terms really mean?  Are they just two ways of saying the same thing?  Are they even related to one another?  In this post I will try to define these terms in a simple manner and frame them in the context of database marketing.  And let’s face it, for better or for worse, as marketers we are not only tasked with learning about new marketing channels like social media and text messaging, we are also assigned with knowing the latest technologies in executing our marketing programs.

“Cloud computing” is a term generally used to describe the use of internet based systems and resources to leverage your software applications/programs, rather than your ‘local’ machines. Furthermore, the applications/programs and data are physically stored in a distributed manner or, “in the cloud”, even though it is conceptually available in a single location.

Still not clear? Let me give you an example that I think everyone can relate to – email.  If you use Hotmail, Yahoo or Gmail (among others) as your email provider then you are already a participant in cloud computing!  Some other examples of cloud based applications and systems are: Amazon EC2, Google’s entire suite of office tools and Craigslist.

“Software-as-a-Service” a.k.a. “SaaS”, is kind of like cloud computing, but different.  Clear as mud, eh?  SaaS systems also deliver software applications/programs ordinarily accessed through the internet, however, a big difference is that your data does not reside in some ambiguous cloud; it’s behind some known entity’s firewall.  This firewall protection could be from your software provider themselves or even some Marketing Service Provider (MSP).  In both cases you would normally have some sort of Service Level Agreement (SLA) to help protect your interests.

To better illustrate the idea of SasS say you have a personal webpage.  It would not be uncommon for you to have a website-hosting company who “hosts” the webpage (i.e. you don’t have a dedicated server at home just for your website).  Another way to look at it is to think of SaaS as renting (versus owning) the software/application. 

In the database marketing industry I have seen all sorts of SaaS systems from reporting & analytics thru process & resource management.  Database marketers may recognize some of these SaaS platforms: Aprimo’s Aprimo Professional, Unica’s Marketing Central or even Cisco’s WebEx.

Compare and Contrast While certainly there are some ties between cloud computing and SaaS, there are also some big differences as to how they are managed.  To better illustrate these differences I have made the following table comparing A) On-site Applications to B) SaaS to C) Cloud Computing:

On site


Cloud Computing

Software Cost

HIGH: Need to purchase the software and hardware which can add up fast!

MEDIUM: With SaaS you are consolidate your costs by “renting”

LOW: There are virtually no costs because of the communal nature of a pure cloud solution


HIGH: You are in charge your own hardware and software compliance upgrades

LOW: Relatively non-existent, you just need to keep your desktops compliant

LOW: Relatively non-existent, you just need to keep your desktops compliant

Data Security

HIGH: Here’s where you get the benefit of the double edge sword, you get to fully autonomy based on your IT department’s wants

MEDIUM: There are minimal security concerns because you don’t have full control, but hopefully it is with a known entity behind a firewall

LOW: Here you are at your most vulnerable because of its open location (i.e. the WWW)

Application Trouble Shooting and IT Support

HIGH: Since you are dealing with your own internal resources this should be the most responsive option of the three

MEDIUM: You are reliant on your SLA with your hosting vendor, but it will eventually be addressed

LOW: For most applications there are fewer support staff, if any, to address your issues

Labor Costs

HIGH: Need to maintain and education a full staff of IT users

MEDIUM/LOW: In most cases you need just a handful of people to be technical and you can rely on your service provider for the rest

LOW: Minimal and this is why it’s so appealing to smaller companies who can staff an IT department

In the end, there is no one right solution for everybody, but every organization does tend to fit, or steer more towards, one type of framework or the other.  For those companies that have money and resources the On-site or SaaS models work best and make the most sense.  For those who are looking to reduce cost and/or do not have a big IT staff’s, Cloud and some SaaS may be the best fit.

Regardless, with marketing dollars on the decline we are going to see a continual rise in Cloud Computing and a resurgence of Software-as-a-Service service models popping back up in our marketing application radars (heck Kmart has brought back Layaway!), but now you know the terms for when the next time someone starts talking about them.

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