Alexander Craig's blog

IntelliFlo launched its IFA offering back in 2004 and are held high by many as the first to bring a “software as a service” (SaaS) solution to the adviser market.  They are seen as the SalesForce.com of the financial software world taking on a brave new business model: chuck out traditional software licensing and delivery and allow an IFA to sign-up to use their product on a monthly basis all hosted “in The Cloud”.

The evangelists will tell you this is great.  Now we can by software “as a service” so someone else deals with all the expensive hardware and infrastructure, maintenance plans, backup and disaster recovery.  We just connect over the web as we need to use it and pay on a monthly, or even per-use, basis.  Simple, cheap and easy to use.

In fairness, it’s not all hype.  As the market for IFA SaaS providers grows, with vendors like True Potential and Solution 4 springing to mind, momentum is being gained.  At the same time, big names like Standard Life and Allianz are dipping their toes in the water.  However the concepts of SaaS and The Cloud are not yet uniformly accepted so we felt it was worth exploring if and where they can really add value in today’s market.

But before all that, lets do a recap.  What is actually meant by SaaS, where do PaaS and IaaS come into it and when did clouds become singular and stop being associated with the weather?!

Cloud Computing is a grand term, but it is actually pretty simple.  For most of us it is just the idea that you access computing services that are hosted by someone else and appear to you on the Internet.  Okay, if you want to get technical you can take into account the massively saleable architecture of the emerging cloud platforms and if you’re in the game of large scale computationally intensive data processing (e.g. back office consolidation etc.) this may be of more interest.  However, for most of us “the Cloud” is just an alternative place for our software or services to live to our own servers.  Perhaps most interestingly, the concepts underlying Cloud Computing are not new.  They can be traced back to the very first commercial computing services.  Yes ladies and gentlemen, the Cloud can be seen as mainframe computing hauled bang up-to-date for the 21^st centaury!

So what does Cloud Computing look like in the flesh?  Well, there are already a number of vendors out there with products on offer and more to come.  The best established ironically is a book store.  Yup, Amazon have lead the way into the Cloud with Amazon Web Services.  In essence, they are allowing you to make use of their vast global IT infrastructure to run your own virtual servers.  It’s your choice of Windows or Linux and you effectively pay by the hour for the number of servers you’re running, the storage you are using and the bandwidth you consume.  But, with charging units being in pence rather than pounds it can look very attractive, particularly for development projects, system demos and other instances where you need a bunch of servers for a limited period of time.

Of course the boys over in Redmond don’t like being left behind so Microsoft are now well and truly on the bandwagon.  November 2009 will see the launch of the Microsoft Windows Azure and SQL Azure Cloud platform.  It’s been in public beta for a good long while now and is very similar to the Amazon offering.  However, as Microsoft was keen to point out at a technology briefing your author attended earlier this week, “Azure is like Amazon but with some important differences”.  Pricing is one, Azure will (probably) be cheaper but only very slightly.  Exactly what you can do with it is another, you get access to virtual Windows 2008 servers but not as an administrator but then it does mean you only have to worry about uploading your applications (not managing the OS) and they also offer SQL Azure on the platform so you don’t need to add and manage your own relational database.

Underlying this differentiation is the difference between two of the three main types of Cloud Computing: Infrastructure as a Service, “IaaS” (aka Amazon Web Services) and Platform as a Service, “PaaS” (aka Mirocsoft Azure).  In the world of IaaS you are just renting space and time on someone else’s hardware and you can pretty much install and do what ever you like on it.  In the world of PaaS you’re taking a step away from the nuts and bolts and renting space and time on virtual servers that someone else is managing for you.  It’s like the difference between leasing a car vs. contract hire.  The former feels like it is more “yours” but you take the risks of servicing etc. while the latter is very much theirs but they look after everything.

I mentioned three main type of Cloud Computing.  What, I hear you ask, is the third?  Well that’s easy, it is our good old friend Software as a Service, “SaaS”.  If IaaS and PaaS are the lease and contract hire of the Cloud world then SaaS is the taxi!  With a SaaS solution we don’t give a monkeys about servers, virtual or otherwise.  All we’re interested in is buying access to a software product, in the case of SalesForce.com a CRM solution vs. full online office automation from IntelliFlo.  SaaS is about delivering us a software service from the Cloud that we would otherwise have bought and installed on our own servers and workstations.  It’s pitched on the basis that we’ll have less overhead from looking after infrastructure and upgrades and benefit from a flexible operational cost model rather than up front capital expenditure.  It’s a pitch that sounds too good to be true.  But it’s not, sure there are some serious considerations to be taking into account before jumping into SaaS feet first but it really does have the potential to offer some major benefits to our market and this is probably why there is so much interest and excitement about it.

In upcoming articles we’ll look at the various Cloud solution types in more detail.  In particular, we’ll consider where and how they may be applicable in the market, consider the pros and cons to be weighted up and of course the relative costs.  Meanwhile, just to recap, here is a summary of what we’ve covered in this post:

• Cloud Computing — computing and software services delivered by third parties across the Internet so we can get access to servers and software without having to own or maintain the underlying hardware, typically including the ability to scale our usage up and down as required so we only pay for what we need and use;
• Infrastructure as a Service — renting access to virtual servers that we have complete control over but that are hosted on someone else’s hardware and that we access over the Internet, e.g. Amazon Web Services;
• Platform as a Service — renting access to virtual servers that are preconfigured and managed by someone else on their hardware that we can just drop our applications onto and access over the Internet, e.g. Microsoft Windows Azure Platform;
• Software as a Service — renting access to a software product that is hosted and managed by a third party that we access over the Internet (typically via a web browser), e.g. IntelliFlo Intelligent Office.

This article was first published on 08 October 2009 on the AT8 Group blog.