When – and why – hybrid SaaS might be a better option

Cloud services, particularly SaaS products like Office 365, G Suite, Slack and Zoom have been invaluable to enterprises trying to maintain functioning, productive operations amidst this year’s sudden shift to remote work and distributed teams.

SaaS has long been popular as a replacement for internally operating broadly-used, commodified IT software like productivity suites and communications platforms.

However, the pandemic, which forced IT operations and support staff to work from home, led more organizations to investigate and adopt SaaS for backend business services like CRM, ERP and content management.

Indeed, Flexera’s annual cloud survey found that one of the fastest-growing enterprise initiatives is migrating on-premises software to SaaS.

The deeper SaaS creeps into an organization’s back end services, the more it renders the availability and performance of critical business processes dependant upon a SaaS product and vendor that the business doesn’t control. When revenue, customer satisfaction and business operations rely upon an external service provider, it forces business executives to fully understand the tradeoffs of SaaS and options for mitigating the risks without sacrificing the benefits. A hybrid SaaS implementation that combines shared and single-tenant infrastructure is often the right option. 

Shared- versus single-tenant SaaS

The SaaS deployment model is typically conflated with implementations using shared infrastructure. The concepts are understandably merged since the vast majority of SaaS products, and all consumer titles, are delivered from infrastructure shared across hundreds or thousands of customers. Nonetheless, the sensitive nature of customer, financial, procurement and HR data held in CRM, ERP, CMS and EHR systems led many software vendors to enter the SaaS market with single-tenant infrastructure to assuage the fears of skeptical business leaders. SAP S/4 HANA Cloud, STE is a prime example of the type that Brian Sommer warned about almost two years ago when he wrote:

Great SaaS apps run in the cloud in multi-tenancy (Old ERP vendors still peddle single-tenant on-premises, hosted and private cloud solutions).

Although Sommer lumps single-tenant SaaS together with on-premises software (“and their countless variants”), the single-tenant deployment model doesn’t necessitate uncontrolled heterogeneity. Indeed, it is often built from a standardized software distribution, run on the same cloud environment as a vendor’s multi-tenant customers, but using cloud resources, i.e. compute instances, storage columns and buckets and virtual networks, that are dedicated to one customer. Such implementations sacrifice some of the operational efficiencies of shared infrastructure for greater control over performance levels, maintenance windows and data placement.

A better SaaS alternative is a hybrid model in which parts of an application, such as the Web UI, mobile interface and administrative console are delivered from shared infrastructure while the backend databases and business logic run on dedicated infrastructure. For example, Generis CARA, a content management SaaS that targets highly regulated industries like life sciences and financial services provides two classes of service that vary the mix between shared and single-tenant resources: 

  • Standard with shared infrastructure for the application logic and UI servers, with a dedicated database for each customer. Updates are automatically applied each quarter.
  • VIP with dedicated services for the application middleware, UI and database. Updates are available each quarter, with customer control over the schedule (including the option of skipping updates)

The advantages of a hybrid approach include:

  • Predictable application performance by eliminating resource contention.
  • Customer control over software updates and maintenance downtime.
  • Customer control over application version and configuration, backup policies and the physical location of data repositories. 
  • Lower lock-in risk by using dedicated databases that are more easily replicated or migrated to other cloud infrastructures. 
  • Faster data restoration in the event of accidental or malicious deletion, again due to not comingling customers on a shared database or storage repository.

Noisy neighbors and other cloud performance concerns

Data security and cost control usually top the list of business concerns when asking executives about cloud usage, however, dig deeper and you’ll find that many IT leaders also worry about performance when using SaaS applications. An ESG survey focusing on applications for distributed workers, i.e. every employee in the COVID era, found that dismal SaaS performance for remote workers is common. – Read more

Considering Hybrid Cloud? Focus on the Why

So much of business—and life in general—comes down to semantics. We articulate goals and measure success using a variety of terms. Some serve to clarify; others confuse. Consider the term “hybrid cloud”—a Google search yields 5.96 million results. So, yes, hybrid cloud is a hot topic, but what exactly do we mean by it?

The (current) accepted definition of a hybrid cloud is any compute/storage environment using a combination of third-party and private (on-premises) cloud resources. Yet, this definition is somewhat misleading. It is very likely that your company has already been using third-party platforms and services—a hybrid cloud model—for many years.

Hybrid cloud is less about the “what” than the “why.” The question isn’t, “Should I move to a hybrid cloud?” (You already have.) The better question is, “Am I using that model to my best advantage?”

On-Premises vs. Public Cloud Capacity—Strategic vs. Non-Strategic Applications

The number of diverse applications, systems and business requirements IT must support is growing exponentially. In response, more tools are being made available to help. Public cloud, private cloud, edge computing and PaaS/SaaS models all give CIOs and IT managers options for handling new, more complex demands. Each has its advantages and disadvantages. The challenge for IT is developing the best mix of available tools to ensure business goals are being met in the most efficient way possible.

Source: Veritas Inc., global IT consulting

The first step in developing a hybrid cloud strategy is understanding which functions, applications and requirements are strategic to the business. More specifically, which operations are core to the organization’s purpose or must remain in-house (i.e., private cloud) due to security, regulatory or other governance issues? These are the high-priority operations for which it makes sense to prepare highly efficient, on-premises resources and staff to support your cloud initiatives.

In deciding whether an application or function is strategic, it is essential to separate the IT output from the hardware/software producing it. For example, you may have significant dollars invested in a legacy mainframe with the software and analytics to run mission-critical applications. But the real question is: How strategically important is the output? If it is strategic, then, by all means, keep it in-house. If not, it may make more sense to migrate applications to public cloud equivalents and use the vacated space for something more strategic.

On the other hand, non-strategic functions represent an opportunity to increase operational efficiency and cost-savings. For example, using a SaaS or PaaS provider to host your CRM platform in a public data center provides more space, staff and resources to support the higher-priority business.

Maximum Productivity and Value, Minimum Space

While the functional purpose of a hybrid cloud strategy is to determine which applications remain on-site and which can go, the overall goal is improving the value and delivery of strategic and non-strategic functions. Often, the full weight of your decisions is not realized until later, when you must address the need for additional data center space.

The cost, time and manpower needed to plan, design, build and maintain a new facility represent some of the most substantial investments a company can make. By strategically optimizing your on-premises cloud capacity—and offloading non-strategic functions to the cloud—you increase available white space. This buys you more time to figure out when you need more space and whether your current optimized facility remains competitive with other options. Additionally, your on-premises equipment (because of its strategic importance) becomes far more valuable and productive.

In some cases, organizations will discover that, once they take their non-strategic operations to the cloud, the cost of running key applications on-site does not warrant maintaining their existing data center. At this point, it may make more sense to sell the data center and lease back the space needed or partner with a multi-tenant data center.

Potential Pitfalls

Of course, moving applications and business functions off-premises also has its downside. Select well. Re-locating core capabilities to the cloud compromises control and can erode your competitive edge. And, while public cloud may appear to be an especially good option for smaller organizations, it can quickly become cost-prohibitive as you scale. Should you decide to transition from a public cloud, re-locating your data to a new environment is often complex and costly, restricting future options. This is not to say that public cloud options are intrinsically high-risk; they’re not. It does, however, emphasize the need to view every decision within the context of your long-term strategy while weighing the cost and agility entailed by public cloud options. – Read more