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Six Sigma Principle Four: Apply Leverage

Distinguish between Cloud and Application Hosting for Social Collaboration Tools

Cloud providers like Amazon Web Services provide storage and raw computing power on a metered basis. SaaS providers typically charge per user, per month on subscription contracts. To understand the technology term cloud, you first have to understand how traditional applications are hosted. There are a few distinct types of application hosting:

  • Dedicated hosting: The service provider hosts the application on a server (or set of servers) owned by the provider but reserved for the exclusive use of one customer.

  • Cloud: You purchase a subscription entitling you to access the application rather than buying the software and installing it on your own equipment. All the IT details of keeping servers and databases running and performing well are off in the cloud — someone else’s responsibility. This also means you as the customer don’t control how the servers and databases that support the application are configured.

    Cloud services are typically multitenant, meaning that servers and databases are shared among multiple customers. This allows the service provider to use server resources more efficiently and keep its subscription price low.

  • Private cloud: IT people use the term private cloud to refer to corporate data center resources and applications hosted in a cloud-like fashion, using virtualization technologies. Organizations pursuing a private cloud strategy aim to achieve some of the flexibility and cost advantages associated with cloud computing, without giving up corporate control.

Some cloud-based social collaboration services, including Socialcast and Socialtext, specifically market a private cloud version of their services: a virtualized image of their software that can be loaded into a private cloud environment. This means the data derived from collaboration activities is stored on servers controlled by the enterprise, which is important to some organizations. Meanwhile, because virtualization abstracts away some of the details of servers and operating systems, the cloud providers avoid some of the support headaches associated with traditional enterprise software.

Other forms of application hosting and outsourcing are not cloud services in the same sense. For many years, Jive has provided managed application hosting services to some of its customers. The difference is that the software runs on dedicated servers, and the customer still decides when (or whether) to upgrade to a new version. The customer is still in control of how the application is configured but outsources the routine tasks of server maintenance. These customers continue to treat Jive as a traditional enterprise software product and have more freedom to customize it than they would get from a cloud provider.

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