Posted by Chris Tebo, CTO
With announcements from Microsoft, EMC, Symantec, and a number of other vendors in the last week alone, Software as a Service (SaaS) is clearly hitting its stride. But one of the more interesting announcements I heard this week came from Amazon.coms company's founder and CEO.
Speaking at the O'Reilly Web 2.0 Summit in San Francisco Monday, Jeff Bezos told the audience that demand for Amazon.com Inc.'s SaaS storage solution has grown so much that the company is being forced to scale back the beta program for its Elastic Compute Cloud (EC2) program, and that it is having to add data centers and disk space to deal with the demand for storage that they're seeing against their Simple Storage Service (S3). Ive been watching Amazon.com's S3 and EC2 services since they launched last year, and this announcement confirms what I suspected.
These two services from Amazon are game changers for SaaS providers. They provide storage and compute capacity on demand. Need 5 servers for the next day to process some data? EC2 can do that for about $0.10/CPU-hour. Need to store 100GB of data for the next 3 months? S3 can do that for about $0.15/GB-month.
These services open the door to getting SaaS solutions up and running with no up-front costs for provisioning servers. Game changer #1! While there have been some fairly high profile solutions that are using Amazon's services as key elements of their infrastructure, I do believe it is going to take some time for Amazon to commit to service levels that are required to build a business.
But there's still another game changer for SaaS solutions in all of this. One of the real challenges for any SaaS provider is to test their solution at scale - ie. test their solution in environments that mirror their production configuration and production load. The challenge here is that production environments for SaaS providers often include 100s or even 1000s of servers. Purchasing and then managing a test environment at those scales is not something that most development organizations are equipped to do. While some might be able to swallow the capital costs of the environment, the management costs will push the organization to look for other approaches to testing.
With Amazon's EC2 and S3 services, the SaaS solution provider can bring up test environments as they need them at a significant fraction of what it would cost to do so internally. Need 50 servers for the next 12 hours to do some load and scale testing? That'll cost about $60 with EC2. If you want to execute those tests every week, you're now spending $240 per month to do so. You couldn't manage 50 servers internally for anywhere near that price, so why would you even try to?
Amazon's services and others like it that will inevitably pop up have the potential to significantly impact the growth of Software as a Service. By providing the computing and storage infrastructure, Amazons service can enable businesses to build and offer SaaS solutions without having to deal with the challenges of managing bandwidth or buying servers. With a plug-and-play back-end, the time involved in getting a SaaS solution up and running can be cut back by a massive amount - 70 percent according to Jeff Bezos, Amazon founder and CEO.
I can't wait to see how all of this plays out.
And by the way... I'm not just blogging about these solutions. I'm looking at how we at Fortiva can employ Amazon's web-services to address real challenges we face in providing an email archiving service for our customers. Our first step in that direction will be focused on product testing. I'll let you all know how it goes!