SaaS Cloud Computing
With more and more companies transitioning more and more data and mission-critical applications to the cloud, the adoption of software as a service is becoming a dominant force in the future of data centers.
According to a 2014 survey by North Bridge Venture Partners, in conjunction with Gigaom Research, the adoption of SaaS among its respondents is 74 percent – that is a whopping fivefold increase since the survey began in 2010. While this number is significant, it is also noteworthy to mention that the influx of SaaS adoption is mostly from company’s transitioning over existing applications. The most common SaaS applications used today are HR (Workday), CRM (Salesforce) and email and collaboration (Office365).
The most commonly cited reason for the increased adoption of SaaS applications is cost. Lower upfront costs are attractive as is the pay-as-you-go pricing model. Particularly intriguing to companies is that SaaS offerings can be funded with operational expenses rather than capital expenditures.
Increased SaaS Adoption and its Effect on the Data Center
So now that we know myriad companies are increasing their use of SaaS applications, what does that mean for data centers?
The trend indicated by companies’ cloud adoption for software deployment infers that the majority of data centers are moving to private cloud deployment for implementation of new software. According to a survey conducted by Gartner Inc., “respondents will push the adoption growth of private (a combination of internal or as hosted private cloud managed by a third party) cloud (46 percent) for deployment across all software markets by nearly twice the rate of public cloud (24 percent) adoption over the next two years. The traditional deployment model for on-premises software is expected to significantly shrink from 34 percent today to 18 percent by 2017. Legacy software will remain on-premises in the traditional model until end of life unless updates and upgrades allow for private cloud deployment models.”
Along with the adoption of SaaS, Gartner expects the hybrid cloud model to become increasingly popular as companies will leave some legacy applications or applications that offer them a competitive advantage on premises and move SaaS-ready applications to external cloud servers housed in third-party data centers.