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It's Cloudy. While SaaS and The Cloud create confusion in commerce, opportunity calls

9 July 2015

SaaS. Cloud. On-demand. On-premise. Managed Services. Hosted. Multitenant. Single tenant. Public cloud. Private cloud. Hybrid cloud. We are surrounded by these terms, but if you really know the differences, you are part of a seriously small minority. So when half of retailers say they want to go cloud in the next year – in commerce, what do they mean? And from a product perspective, what’s the right fit? Brenna Johnson, Commerce Product Strategy at Oracle sheds some light...

Software has been eating the world for years now, and Software as a Service (SaaS), hosted in The Cloud makes it all easier, faster, cheaper. 

In an effort to be ready for the SaaS boom, “SaaS” and “cloud” in the commerce space have become interchangeable. But good messaging and subscription-like finance terms does not define a SaaS product.

And software doesn’t just live a singular “Cloud,” there are many clouds, and not all clouds are created equal. Public clouds, private clouds, hybrid clouds all vary in security, scale, performance, capabilities, and hardware depending on provider.  

From a product perspective, here’s what "cloud" can mean today:

  • SaaS (multitenant) delivers upon the promise of commerce in The Cloud: zero infrastructure or upgrade management, housed in a public cloud/data center on a server with other storefronts (multitenancy) to take advantage of automatic push upgrades, elastic scaling, and shared cost. True SaaS is appealing as it requires no CapEx budget, implementations are typically less expensive, and customers are typically billed via monthly subscription. Today’s SaaS commerce solutions offer slick tooling and beautiful templates, but not the brand control, features, or proven scale for growth needed by marquee brands (or those aspiring to be). For these vendors, in order to push a single release of software without breaking sites, the ability to customize each storefront is limited – leaving many sites looking the same. Questions about infrastructure and scalability raise concerns with performance and security.
  • On-demand / hosted solutions (single tenant / “private cloud”) can simply be an on-premise technology (or an on-premise platform re-architected for the cloud) deployed on a private server on or off site. It can also be a hosted in a private or hybrid cloud at a commerce vendor or hosting provider, and may feature a full or limited feature set of on-premise software that can be customized. On-demand / hosted deployments typically require moderate CapEx budget, and billing models vary. While these solutions offer benefits of multi and single tenancy, they are not SaaS products. An IT staff may not be maintaining the deployment on-site – but someone somewhere is still maintaining it, and someone is paying for that maintenance.  Longer custom deployments and upgrade management still leave much to be desired in terms of true agility with on-demand / hosted cloud solutions.

Then, there's:

  • On-premise (single tenant, on-site, private) ensures total customization – and everything that comes with ownership from a cost perspective. Many merchants welcome this approach, as it is the only option that can meet their requirements. They may look to the cloud – or move elements of their deployment to the cloud – but they see no other realistic option for their core site. Requires more substantial CapEx budget, billing models vary.

Today, the reality is that there is no perfect SaaS or cloud solution. Many merchants happily compromise because they have to – whether it’s scale, growth, control, customization, or cost. Some are left with a dilemma: do I lower my management and infrastructure costs, or do I make sacrifices with the customer experience?

Complex commerce organizations craving total control and customization won’t get what they need from a SaaS or on-demand solution. Growing organizations with limited resources kick the can down the road until their SaaS solution becomes restrictive to the brand experience, and cost prohibitive.  On-demand users can say they are cloud, but are still left wanting more in terms of agility and cost savings.

What if there was an opportunity in the market to marry the agility and cost-savings of a true multitenant SaaS solution, with the brand control and experience customization you’d get with an on-premise platform?

In a landscape peppered with cookie-cutter sites and environments that can’t scale, it’s time for a shake up. Online businesses have been waiting!

Stay tuned for an interview with Oracle Commerce Development to hear how we are working to solve these challenges…


Source: Oracle Customer Experience Blog


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