Outsourced IT: Understanding Software, Platform and Infrastructure as a Service

Outsourced IT: Understanding SaaS, PaaS and IaaS

Posted by Kulvinder Gill on Thursday, September 22nd, 2011

As cloud computing continues to become increasingly popular among hedge funds, there still seems to be an area of confusion that surrounds this technology. In previous Hedge IT articles we have looked at Why Cloud Computing is Right for your Hedge Fund and Understanding Public, Private, and Hybrid Clouds. Today, we will look at three key elements within the cloud: Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS).

Software-as-a-Service (SaaS)

In the SaaS model, firms are offered a complete range of application via the Internet, which are managed by the cloud provider. This means firms do not need upfront investment in servers or software licenses, while for the provider, the costs are lowered since only a single application needs to be hosted and maintained. SaaS, PaaS, IaaS

Platform-as-a-Service (PaaS)

PaaS is the delivery of a computing platform over the Internet. The PaaS model enables hedge funds to create Web applications quickly without incurring the cost and complexity of buying and managing the underlying software/hardware. Firms have control over the deployed applications and environment-related settings.

Infrastructure-as-a-Service (IaaS)

Infrastructure as a Service (IaaS) provides data centre, infrastructure hardware and software resources over the Internet. Through IaaS, applications are delivered as a virtualisation platform by the cloud provider and can be accessed across the Internet. The firm has full control of the virtualised platform and is not responsible for managing the underlying infrastructure.

SaaS, PaaS and IaaS share some common traits. They are all delivered over the Web, and services can be accessed in the cloud on demand, usually via subscription payment. Hedge funds can easily upgrade or downgrade plans in real time to accommodate business needs for cloud business solutions.

The table below illustrates the characteristics in each cloud model:

Model Service	Characteristics	Key Players
IaaS	Resources are distributed as a service Allows for dynamic scaling Variable cost, utility pricing model generally includes multiple users on a single piece of hardware	Eze Private Cloud Amazon Web Services Rightscale Gogrid Rackspace
SaaS	Web access to commercial software Managed from a central location Users are not required to handle software upgrades and patches Application Programming Interfaces (APIs) allow for integration between different pieces of software	Salesforce Google Apps
PaaS	Services to develop, test, deploy, host and maintain applications in the same integrated development environment Web-based user interface creation tools help to create, modify, test and deploy different UI scenarios Built-in scalability Integration with Web services and databases via common standards Tools to handle billing and subscription management	Force.com Google App Engine