A couple of weeks ago Alfresco CTO John Newton posted the following tweet on Twitter:

"Does Cloud = SaaS [Software as a Service]? I don't think so. Cloud is computing, more like electricity."

My gut reaction was that they were equal, and up until that moment I had used the terms interchangeably, but Newton's post got me thinking that perhaps they were different. SaaS applications use cloud platforms, but are not exactly cloud computing. The more I thought about it, however, the less clear it got, so I decided to do some research and also take my questions directly to some cloud computing experts and ask if the two terms were indeed synonymous or if they were as Newton opined, completely different.

Let's Define Terms

SaaS is an acronym for Software as a Service. I've written about this in Does Using GMail Mean You're Stupid? and several other posts. For companies, using a service, it means they no longer have to worry about building an infrastructure for the software. Instead, the software is available via web browser and the hosting company in exchange for your subscription fee, handles all the heavy lifting on the back end. For some companies, it's a very attractive option.

So how does this differ from Cloud Computing? In a Gartner Voice podcast from last summer, Daryl Plummer, managing VP and chief Gartner fellow offered this view of cloud computing:

"Someone is going to take responsibility for delivering some IT-related function as a service to a set of customers. Now, these customers don't even have to know how the service works. They just get to use it."

That sounds a lot like the service and the infrastructure are linked, but Plummer goes onto say that the true power of cloud computing lies in the way it changes the economics of computing, that is that it creates a marketplace with service providers and consumers. "The way that we actually charge for those services won't necessarily be based on how many servers we're running, or how much maintenance costs or which software products we bought. It's going to be based on the value of the service to the customer, and when you start getting into that consumer-provider relationship, the customer sets the value. It's what the market will bear."

If you think about what Plummer is saying here, this sounds a lot like Newton's idea of computing as electricity.

Saleforce.com: The SaaS and Cloud Computing Vendor

I decided to ask Salesforce.com mostly because they are the prototype SaaS vendor, and at the same time, they now have Force.com, a cloud platform for building your own applications on the same platform Salesforce.com runs on. Al Falcione, Saleforce director of product marketing sees a fundamental difference between the two concepts. "We see cloud computing as a very broad term that refers to building and running applications on the internet."

He says within cloud computing, Salesforce sees two different markets: cloud computing platforms like Salesforce, Google and Amazon upon which applications are built. But he says, "cloud computing applications are for lack of a better term, packaged applications that run in the cloud." Saleforce.com and Clickability are two examples of this, as are Gmail and Google search.

Jan Allerman, CEO at Servoy, a company that runs an application development environment as a service, says the line between the two terms can get thin. "Strictly speaking, the SaaS would be the service and cloud computing would be the computer layer running on the internet." He says Force.com sits in between that by providing a development environment and putting it inside their cloud to do hosting of that service.

While I see the nuance, I have to conclude that Newton's post is essentially correct. The two terms are different and SaaS to a great extent is a subservice of cloud computing. Not all cloud applications are SaaS applications, but essentially all SaaS applications are in the cloud, and the cloud is strictly providing the computing power to run those applications, regardless of the type.

What do you think? Are they the same or different?

You may wish to take a look at James Urquhart's definition of Saas vs. Cloud Computing. Here's a Google cache link as his domain is temporarily down:

I'm afraid the link doesn't work. Requires a password, but I would be interested in seeing it at some point.

Good article. When I think of SaaS, I think salesforce.com, for one. When I think Cloud, I think Amazon EC2 where you use their computing infrastructure to power your apps or whatever whereas SaaS is more of a subscription-based software rental.

Thanks for your comment, Ken. Seems we are still working these terms out, but I agree with your definitions.

Defining cloud computing is in embryonic stage. There are many XaaS types but the main ones being built are Software as a Service (SaaS which SalesForce is a great example), Platform as a Service (PaaS such as the Amazon Web Services storefront), Infrastructure as a Service (IaaS like the Amazon S3 Simple Storage Service) and Business Process as a Service (BPaaS such as ADP payroll processing). Around those services you need orchestration services such as monitoring, identity management, security, provisioning, integration and optimizing. The ideal concept is where the orchestration vendor acts like the ISO electrical energy traffic cop - moving your 'cloud' resources to the least cost or high reliability vendor at a given moment in time and then changing the vendor at the other end without the end user knowing if the cloud resources are located around the corner or around the world.

That sounds a lot like John Newton's electricity idea. Thanks for the great comment. Appreciate your input.


I certainly agree the terms are different - my company SNIP has been building what we term SaaS applications for 10 years - by that I mean applications which were accessible over the Internet and paid for by subscription model - however we owned/leased/managed servers in a data center and "installed" our web application on the same. We are now actively building applications in the Form.com world, and the process is way way different. In this case someone else provides a cloud computing platform which delivers servers, operating systems, development platform and a subscription management service. I view Salesforce.com CRM as a SaaS product, whereas Force.com is a platform for cloud computing. That difference is not well understood even by many Salesforce users, who view Salesforce as the same thing as CRM.

Thanks for your comment. And you are correct that many people fail to see the difference. I think that to some extent the vendors in the space cause the confusion to some degree in the way they discuss cloud computing in general (as a buzz word) and that's one of the reasons I felt compelled to explore the idea in this post.


Thanks for the link. I will check that out (and this one works). BTW, I started following you on Twitter. You can follow me at:

Thanks for taking the time to comment.


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I gathered more information about cloud computing Saas. I attended one conference in http://cloudslam10.com and learned more information about that conference. That information is more helpful for IT Professionals.

Three combination of Cloud and SaaS

1. Cloud Computing without SaaS.
2. Cloud Computing with SaaS.
3. SaaS without Cloud COmputing.

Please let me know if all 3 of above are valid scenarios.
most of the people disgree on Case-1

I'm not clear how you would have scenario 1. The cloud is always going to be a service, so I'm not sure how you could have one without the other. It would be helpful if you have provided examples of each scenario to better understand what you mean.

Thanks for commenting.


These quick couple of paragraphs spell it out pretty clearly...

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