What are Cloud Computing and SaaS?

Q: What is Cloud Computing and what is “Software as a Service” (SaaS)?

Let’s break this answer into a few parts.

What problem does it solve?

Before the era of cloud computing, companies had to maintain their own software and servers, usually on-premise (physically in an office or specific location), and all of the expenses that come with (buying and updating hardware, buying and updating software, configuring and reconfiguring, and paying for all of the personnel that required — from security guards to cybersecurity experts).

Cloud computing software companies like Salesforce do all of that so that their customers don’t have to – customers pay for a subscription, and all of those costs are built into the price of the software. Salesforce manages all of the hardware and software and updates so that you simply navigate to a landing like login.salesforce.com and enter your username and password and you can get down to work. This provides an immense amount of value to businesses both large and small, and as such cloud computing companies can command high prices and remain very profitable.

This is just the software application of the economic principle of competitive advantage — cloud software companies can provide a service more efficiently, benefitting from economies of scale, and so it makes financial sense to “outsource” this part of the business to them, and focus on whatever the core of your business is, knowing the technology is taken care of.

What are some examples of cloud computing?

Well — salesforce is a great example. While it started as customer relationship management software, it’s expanded and built a platform with a large footprint – from sales to service to marketing to analytics, all provided as a service and delivered to you via “the cloud.”

Adobe makes an amazing suite of tools called CC, or “Creative Cloud.” You can use programs such as photoshop and illustrator and premiere pro, and all of your projects will be synchronized with Adobe’s servers so that you can work from any machine on the same project.

Google and Amazon provide cloud software as a service – products like Gmail, Google Drive, G Suite, and Amazon Web Services (a platform which Netflix utilizes to provide you with streaming video that never seems to need to buffer).

Apple’s iCloud is also cloud software, obviously, allowing you to sync things like your photos and messages and settings across your phone, tablet, and laptop.

Okay, and Software as a Service (SaaS)?

Software as a service actually refers to the business model, wherein the consumer most often pays on a subscription basis and can access the software over the internet. In the past, you used to have to buy software (like on discs!) and manually install it on each computer.

That’s all, cheers! Check out the other Conversations here.

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