SHINING A LIGHT ON THE CLOUDS: FINDING A TRUE CLOUD SOLUTION www.netsuite.com Grab a seat and enjoy. Read Time: 4 minutes SHINING A LIGHT ON THE CLOUDS: FINDING A TRUE CLOUD SOLUTION The Cloud continues to hang over the Defining the Cloud business computing landscape like, well, At its simplest, cloud computing is just using a cloud. Public cloud, private cloud, hybrid someone else’s computer over the internet. cloud, SaaS, PaaS, IaaS—all of it makes for a However, the marketplace has done its part confusing alphabet soup for even the most to confuse things, offering up multiple flavors experienced industry observers and IT pros. of cloud, including: And, as longstanding technology firms look Public cloud: Shared services available for for ways to get into the market and new public use, including applications, storage, entrants emerge, creating new terminology, databases and analytics. Essentially, multiple claiming firsts and generally obfuscating the people using someone else’s computer over entire landscape, it only promises to get more the internet. confusing for technology buyers seeking a cost effective, scalable and agile solution for Private cloud: Cloud infrastructure created for their needs. a single organization that takes advantage of advances like virtualization and economies This paper serves to provide some clarity of scale. Essentially, one company or many around the different flavors of cloud and a divisions of a company using one computer detailed explanation of why multi-tenant SaaS over the internet. offers the greatest combination of value, agility and scalability. Copyright © 2017, Oracle and/or its affiliates. All rights reserved. Page 2 Infrastructure-as-a-Service (IaaS): Not much Why Multi-tenancy Matters different from the public cloud, but the It’s this multi-tenancy that makes the big customer is just renting the processing power difference and separates fake cloud of the cloud, which it can scale up or down in solutions from true cloud solutions. Many times of need. The customer still maintains, legacy software companies have simply customizes and updates the software. Some ported their old code and architecture over common examples include DigitalOcean, to a private cloud and offered it up as a Linode, Rackspace, Amazon Web Services service—this is what we call the fake cloud. (AWS), Cisco Metapod, Microsoft Azure and A true cloud platform is differentiated from a Google Compute Engine (GCE) fake cloud platform for the following reasons. Platform-as-a-Service (PaaS): Here the vendor • Economies of scale provides not just the computing power, Running business applications in a single but also the development environment, instance, whether it’s on-premise, with a allowing customers to build their own hosting provider or with an Infrastructure- software applications while sharing services. as-a-Service (IaaS) provider such as Some examples are AWS Elastic Beanstalk, Amazon, does not provide the economies Windows Azure, Heroku, Force.com, Google of scale of a multi-tenant solution. A hosted App Engine and Apache Stratos. provider, aka the old Application Service Provider (ASP), model may save a company Software-as-a-Service (SaaS): In this the hassle of managing hardware and using scenario, the vendor supplies everything— IaaS for applications may allow companies the processing power, the development to tap into shared commodity hardware. But environment and the software itself. running all customers on one instance of Customers run the applications over an software and shared hardware can mean Internet browser and can feed or extract the far bigger savings. Some vendors might data they need. Perhaps most importantly suggest that the advantage is only to the and often overlooked, SaaS is built in a multi- cloud provider, but be sure that savings tenant architecture, meaning customers are are passed along to the customer—just do all on the same version of the software at the a little price comparison and you’ll find out same time. for yourself. Copyright © 2017, Oracle and/or its affiliates. All rights reserved. Page 3 • No more version-lock standards. The changes coming for public Cloud customers using a multi-tenant companies in December of 2017 and solution don’t have to worry about being private companies in 2018 demand more stuck four versions behind the way they than just software upgrades—they demand do with hosted software. Ask customers many organizations rethink the way they whether they want the latest version of operate, particularly around finance and software and the answer is almost always sales commissions. NetSuite customers "yes". Unfortunately, the follow-up questions at least know they have a system that has are "how much does it cost and how addressed the new standards and built that disruptive will it be?". Customers of multi- into the system. tenant solutions do not need to worry about • Customization either one. Upgrades come as part of the True cloud vendors also provide a subscription service and enhancements customization platform that allows are iterative and gradual, what many end- customers and partners to not only users have come to expect based on their customize the application on their experiences with consumer applications. platform, but ensure that all of those • Adapting to evolving regulations customizations continue to work when a Those automatic, regularly scheduled new product enhancement is rolled out enhancements are particularly important by the vendor. This guarantees that you as regulations and standards change not only get to use the latest functionality and evolve. For example, when changes without delay, but that you do not need to were made to the Value Added Tax (VAT) constantly re-implement customizations by the UK and EU in 2008, 2009 and and integrations you previously had in 2015, NetSuite customers didn’t have to place every time a new product version worry about downloading and testing new comes out. software. Since they were all on the same • Investing in the future version of the software, NetSuite updated Furthermore, multi-tenancy means the the code and all customers woke up money being spent on applications isn’t just with a compliant system. For on-premise maintaining the status quo. The maintenance customers, that meant downloading a fees that go into on-premise and hosted patch, testing it to make sure it works and software may ensure that you can implement then testing any integration that might be the new version that comes out every impacted by the change. For on-premise couple of years, but doesn’t account for the or hosted cloud customers locked into disruption and associated costs that goes even older versions, it’s an even bigger along with that upgrade. With the true cloud, headache. The same is true for the new the money spent on a vendor like NetSuite changes coming to the ASC 606 accounting is no longer being spent simply on what Copyright © 2017, Oracle and/or its affiliates. All rights reserved. Page 4 you have. You’re spending on the newest and latest versus just keeping the lights When evaluating cloud on. True cloud users are benefiting from all providers, it’s important to the enhancements made by the vendor as opposed to waiting for it. ask these questions: 1. What is the vendor’s viability, cloud • Subscription pricing can be a differentiator track record? Most multi-tenant SaaS providers offer their solution in a subscription pricing 2. What are the cloud SLA commitments, transparency? structure, typically per user/per year. This serves as a win-win for both customer and 3. Does the cloud vendor have the right certifications? vendor. For the customer, the upfront costs are significantly lower than on-premise 4. Is it hosted or a true cloud solution? alternatives and the vendor needs to 5. Has the provider achieved scale? continue to earn your business. It also 6. Can it be customized, extended mitigates risk. While some cloud vendors and integrated? offer perpetual licenses, should the implementation fail or the customer switch to another provider after a short period, they ensure they stay in business. There is an lose that upfront investment, but ultimately alternative, however. There are a handful costs the vendor nothing. of companies that understood the need to architect for the cloud before the hype Not All Cloud Vendors are the Same began and have built successful businesses Beyond the true cloud/multi-tenant vs. fake with a large customer base, giving them cloud/hosted debate, even within the world of decades of experience serving their multi-tenancy, all clouds are not created equal. customers in the cloud and the resources to Even as legacy providers are scrambling to continue development. cloud-wash their old applications, the emerging software companies are architecting their Shopping for cloud software can be a solutions for the cloud—they have to or they confusing endeavor. With the true cloud, don’t get funding. This leaves buyers in an customers get economies of scale, regular uncomfortable place: either they turn to updates and the scalability they could legacy vendors and hope the transition to the not with hosted solutions. And with well- cloud goes smoothly, or they select an up and established companies like NetSuite, they coming software company that has built their get a partner invested in their success that solution for the cloud from the ground up, continues to enhance the product, while but doesn’t have the track record of serving supplying the security, uptime and flexibility customers long term or the deep pockets to that a modern business demands. Copyright © 2017, Oracle and/or its affiliates. All rights reserved. Page 5 www.netsuite.com [email protected] 877-638-7848.