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We’ll be hosting a live chat with experts from Aria Systems tomorrow at 2 p.m. ET on SaaS subscription and billing management.

Over the last decade, CEOs, investors, analysts and business advisors have fallen in love with the recurring revenue model. But these new recurring revenue businesses also come with new requirements.

In order to better-understand today’s billing landscape and optimize your unique revenue model, join this complimentary webcast. It will serve as an instructional roadmap for building a recurring revenue model and outlining many of the different monetization strategies available. Access this now to learn how to:

• increase revenue through greater customer acquisition and retention;
• choose the right recurring revenue model;
• and more.

Hope to see you there tomorrow!

General Cloud Terms

Private cloud: Consumer, provider and owner of the cloud are within the same enterprise. Don’t want to give up your data and security to an outside service provider? Consider virtualization and data center automation for a private cloud. More interesting than having a cloud to call your own is the possibility of creating a partner cloud, or as Eric Knorr calls it, “quasi-public clouds for partners…[that] may accelerate business-to-business e-commerce in unanticipated ways.” You don’t set up a lemonade stand to just drink it all yourself do you?

The main opposition to the private cloud is that it doesn’t exist. Skeptics argue that having to buy, build and manage your own system defeats the purpose of a cloud. Still, proponents for the private cloud praise the ability to monitor security and confidential data, as well as maintaining a “heterogeneous infrastructure,” according to the latest Novell study . Just as virtualization is considered a great stepping stone into the private cloud, at the very least, the private cloud introduces your infrastructure to the cloud, which can mean a smoother transition in the future.

Public cloud: The consumer and provider are in separate enterprises. Ownership of deliverable assets remain within the provider. Much of the concern surrounding public clouds have to do with security and compliance. If the data and hardware is out of your hands, who’s to say the security of that data and hardware isn’t as well? According to Research & Market’s survey from earlier this year and the over 500 developers they surveyed, Google is at the head of the pack for application setup, infrastructure and management in the public cloud. So it seems, until a standard is reached for cloud computing, companies are steering clear of unfamiliar names or entrusting mission-critical applications to the cloud.

Hybrid cloud: Any combination of providers and consumers, with multiple service layers. There it is, the middle ground, the peacekeeper, the Great Cloud Compromise. For those less comfortable with sending out all of their data and business processes into the cloud, there is the hybrid of private and public clouds. Janel Jarvin, CEO of Evans Data, told WebSphere Journal in an interview that “[m]ost developers expect to be in a hybrid situation going forward with respect to application deployment in the Cloud.” Just as using multiple forms of the cloud can benefit the enterprise, so can using multiple cloud and SaaS vendors. In Research & Market’s study, developers cited Google as the top dog for public clouds, and IBM as the go-to for private clouds. Avoiding vendor lock-in and remaining open to a unique infrastructure is vital to finding the perfect cocktail of services right for your enterprise.

A Little-Bit-Less-General Cloud Terms (after the jump)

One of the beauties of the cloud is its flexibility. For the commitment-phobe in all of us, it means making it to the river without throwing all of your chips onto the table. There are different levels of the cloud, involving different mixtures of people and projects, pegging full cloud adoption as a process rather than a one-time commitment.

Private Cloud

Integrating the use of a private cloud into the enterprise should begin with those familiar with the cloud and spread out as you become more familiar with how it fits with your business processes.

• Exploratory cloud: This is dipping your toe into the cloud, so to speak. The workload is isolated and experimental.
• Departmental cloud: This brings a few more people into the mix; the IT organization and cloud users are under the same management.
• Enterprise cloud: Come on in; the water’s warm! The IT organization and cloud users are scattered throughout the enterprise, across internal boundaries.

Public Cloud

There are two distinct forms that the public cloud can take, depending on the goals and enterprises seeking the service.

• Exclusive cloud: Provider and consumer have a one-on-one relationship. In this case, the consumer can be a group of consumers, such as residing under one umbrella group, but are familiar and involved with one another. These parties have a say in deciding what terms the cloud is provided and managed, meaning the possibility for high customization.
• Open cloud: Provider and consumer have a one-to-many relationship. This form of the public cloud is less personalized than the exclusive cloud in that the terms of service are decided and communicated by the provider. The consumer is one of many consumers dealing with the cloud provider, and purchases their services usually through an automated and standardized process.

The Breakdown: [Insert Term]-as-a-Service

Other perks of the cloud computing craze are the a la carte services. Some enterprises rely on SaaS more than others, depending on their size, capabilities and budgets.

• Infrastructure-as-a-Service: IaaS is often used for servers, networking, storage, and data center provisioning.
• Platform-as-a-Service: PaaS adds middleware to IaaS. Use for database software, development tools and application runtimes.
• Software-as-a-Service: Adds applications to the PaaS mix. Use for everyday needs such as email, Web conferencing and collaboration, CRM, and ERP.
• Business-Process-as-a-Service: This one mixes things up by changing the operator of industry applications. Hire a cloud, hire an operator. These business processes are usually standardized such as human resources, accounting or back-office processes.

Once you have your terms straight, you’re ready to broach the subject in your enterprise and to determine which level of cloud adoption you’re ready for.

Melanie Yarbrough is the assistant community editor at ITKnowledgeExchange.com. Follow her on Twitter or send her an email at Melanie@ITKnowledgeExchange.com.

Source: IBM Defining a framework for cloud adoption

The duo of interesting surveys have shed some light on the question of actual Software-as-a-Service adoption in various-sized companies, as NASDAQ News’ Steve Monfort reports:

Techaisle, an IT market research firm, reports that companies begin to use cloud computing services when they expand beyond 20 employees. As companies grow to 250-plus employees, they become more likely to move IT operations in-house – and if they continue to grow past 500 workers, they turn once again to the cloud. 

Monfort also notes a Novell study that indicated 77% of 2,500-person companies are using “some form of cloud computing today,” mostly to complement rather than replace existing IT infrastructure. Both studies jibe with what I’ve seen anecdotally: The smallest companies are often relying as much as they can on SaaS, whether it’s free products like Google Docs or low-cost SaaS options like Quick Books Online. And the big companies almost cannot avoid it, with the sales force demanding, well, Salesforce.

It’s the medium-sized companies, however, that are being the most cautious: They’re too big with too-specific needs for the “trimmed down” offerings available to the low-end, but not able to afford enough customization and cloud redundancy on the high-end to make it worth their while.

As mentioned, the data itself can be a bit cloudy. See a recent CompTIA study which found mid-sized businesses being the largest “cloud” adopters. Sure, cloud can cover a lot of things beyond SaaS, but perhaps the most important lesson from all this is that the right cloud strategy isn’t what your peers are doing, it’s what’s right for your company.

Michael Morisy is the editorial director for ITKnowledgeExchange. He can be followed on Twitter or you can reach him at Michael@ITKnowledgeExchange.com.

James Urquhart, Market Strategist for Cloud Computing and Data Center Virtualization at Cisco, was recently traveling in Australia. What struck him the most, he said, was how they were equating cloud computing with outsourcing. “They’re not the same thing,” he assured me. “Though they do have a loose relationship with one another. They have the same concerns: service levels, security, liability, legal concerns and all that. They’re still there.”

So, what can cloud computing offer the enterprise?

There are the obvious financial appeals, or what Urquhart referred to as the ability squeeze costs. But that just gets the customer on the lot, the “extreme agility” that cloud computing offers is the great gas mileage. Citing one of his favorite quotes from a CIO, “We came for the cost savings, but stayed for the agility.” Urquhart stressed that CIOs aren’t just looking for a way to cut costs, they’re interested in innovation.

The concerns surrounding traditional IT are interwoven. Complaints that IT has become a “cost center” is partly attributed to IT becoming a buy-over-build arena where “80 percent to 90 percent of IT and telecom budgets are spent with outside vendors.” Innovation in the traditional IT model is too risky, too costly.

Urquhart puts it this way: In the traditional IT model, a lot of new projects get the boot because of the risk factors. The traditional IT cash flow model has changed, thanks in large part to SaaS and the cloud. Whereas before there was a big spend and outpouring of budget followed by an effort to minimize depreciation, the cloud offers a pay-as-you-use model that’s more appealing. IT budgets can be spread out, allowing CIOs to dip their toes experimentally without fear of losing millions of dollars.

The pressure to “plan for success” has been loosened a bit; the cloud has created some wiggle room for trial and error, where innovation and exploration are feasible possibilities rather than pipe dream luxuries. In the end, companies are willing to pay more for the cloud and agility, said Urquhart. Though altogether the bill may add up to more, the appeal of spending more slowly and with an elastic commitment often wins out.

The appeal or the downfall of cloud?

Is this noncommittal, curious attitude toward cloud risky in itself? Are CIOs really willing to give up the option of customization? Cloud may force enterprise introspection, picking out which applications are unnecessarily customized at what cost, and stripping down to the bare bones. If a standard offering were available, enterprises could get what they needed without the temptation of over-customization and over-allocating their budget.

What’s next for IT professionals?

When asked about how IT professionals should approach the changing market, Urquhart was optimistic. IT has long been viewed as a drag rather than an innovation center, he said, so maybe these changes and “threats” to traditional IT are a chance to reinvent your career and career path along with the whole infrastructure.

“The nature of operations is changing,” says Urquhart. “We’re transitioning from server-centered operations to more application-centered.” Whereas previously you’d buy a server, install an OS, give it an IP address, then install the application, these days your deployment is the application, he said. This creates an opportunity for new cocktails of skills to remain competitive in the changing market. The old: Network/storage skills. The new: Service-level skills based around applications, middleware, and the data center. He stressed the importance of beginning to “understand what it means to manage from the perspective of the application,” focusing your skills and knowledge on the application rather than everything else.

Melanie Yarbrough is the assistant community editor at ITKnowledgeExchange.com. Follow her on Twitter or send her an email at Melanie@ITKnowledgeExchange.com.

First things first: What is Software-as-a-Service? From SearchCloudComputing.com:

Software as a Service (SaaS) is a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet.

Before you SaaS, Ask

SaaS is being hailed as a “savior” by some, but the perfect solution for a company that looks a lot like yours may be what sets your own operations and budgets back. Be sure to ask the right questions before deployment:

• Should your company rely on software built and utilized by hundreds of other companies?
• What are the possible repercussions of less specificity?
• What are the possible repercussions of the buy-over-build mentality?
• Is this functionality separate from other processes?
• Are you currently investing in unnecessary customizations? In other words, will outsourcing to SaaS simplify operations in a beneficial way?
• Can you afford to not own this functionality? Would downtime cause a disruption in business operations?
• Is there a service-level agreement in place to protect your company from downtime?
• Have you compared total cost of ownership (not just up-front licensing, but ongoing costs such as support and operations staff, hardware, etc.) to SaaS costs?

Benefits of SaaS (or why CIOs are foaming at the mouth)

We’re all familiar with solutions that look great on paper, but once they’ve been adopted past the point of turning back, they turn on us. Below are some of the reasons CIOs and other execs see SaaS as an answer from the heavens:

• Faster implementation
• Faster access to current technologies
• Fewer bugs due to less complexity and fewer chances at errors
• Lower cost for enterprise
• Reduced start-up costs; can get off the ground faster and cheaper
• Since vendors have less support spend, they can pass on savings to customer
• Less time spent managing compatibility and upgrades
• It’s the answer to across-the-board simple processes that allow time and money to go toward the more necessary and complex processes

Protect Yourself Before You Wreck Yourself

With the good always comes some bad, so be sure to know the ways you can protect yourself when entering this growing market.

• Service-level agreement
• Stringent security policies
• Rights to the software and data should the SaaS vendor go out of business
• Request permission to audit vendors’ controls

Money isn’t the only concern; often smaller companies with fewer resources outsource the risk in addition to the cost of keeping developers in-house. Look at the situation from the angle of worst-case scenario as well; would you be able to afford repair and recovery should something go wrong? If not, it may be worth outsourcing that responsibility to a third-party vendor.

For more information on the ins-and-outs and latest news on SaaS, check out SearchCIO’s Enterprise SaaS news section.

When we first met last year, both sides seemed a little unsure… at the time we had fairly different product focuses, customer sets, and cultures.

Google was the bad boy of the consumer revolution, of life made simpler, the David that slayed Microsoft’s giant while breaking all the rules. VMware was a quieter revolutionary; the quiet, nerdy prodigy that helped organize away abstract concepts efficiently, whose biggest fans were in the IT sector that Google was pushing towards irrelevency.

Call it fate, or Cupid’s arrow, or the fact that they shared the same college dorm at Stanford, the Gates Computer Science Building.

Whatever the cause, Steve Herrod was publicly crowing about the two tech giants’ ”Open PaaS” strategy, and he offered a little more insight in his Q&A with Alex Barrett, news director of SearchCloudComputing:

What are VMware’s broad goals for cloud computing?
S.H.: We’re moving from straight virtualization to virtualization as an enabler for cloud computing. We need to help IT build the private cloud, to create differentiated but compatible public cloud offerings and — to bridge those two — by letting IT managers view IT assets that reside on on-premise and off-premise resources.

We also need to address security. One thing you hear CIOs say is “My data needs to stay in one state” for compliance reasons. I think we’ll see the emergence of different kinds of public clouds: the New Jersey cloud, the hydroelectric cloud, the cheap cloud, the secure cloud, etc. One way we do that is by working with partners. We currently have 2,000 cloud partners — that’s up from zero one and a half years ago — and each has a different angle about why they matter, and who they appeal to.

Essentially, VMware hopes to vastly broaden the SaaS and cloud markets, carving out a piece of the action. And as long as that market grows exponentially, they’re happy to help Google grow its own hosting service (which Herrod noted “is not currently based on VMware’s server virtualization products”) and hopefully convince customers rapidly deploying it that VMware’s own hosting solutions, which virtualize the messy hardware side of things, might be a better long-term fit if they want to control costs, security, or another element more tightly.

Or as VMware’s CEO Paul Maritz put it more succinctly: ”The more choice you give developers to deploy their technology, the greater the motivation and the greater the resulting apps.”

Strange bedfollows indeed, but they might just be a winning combination when it comes to growing the SaaS, virtualization and cloud computing markets.

Michael Morisy is the community editor for ITKnowledgeExchange and formerly the news writer for SearchNetworking and SearchTelecom. He can be followed on Twitter or you can reach him at Michael@ITKnowledgeExchange.com.

Enter skipfish, Google’s automated web security scanner, which was launched Friday by Michał Zalewski in a post on the Google Online Security Blog:

Today, we are happy to announce the availability of skipfish – our free, open source, fully automated, active web application security reconnaissance tool. We think this project is interesting for a few reasons:

• High speed: written in pure C, with highly optimized HTTP handling and a minimal CPU footprint, the tool easily achieves 2000 requests per second with responsive targets.
• Ease of use: the tool features heuristics to support a variety of quirky web frameworks and mixed-technology sites, with automatic learning capabilities, on-the-fly wordlist creation, and form autocompletion.
• Cutting-edge security logic: we incorporated high quality, low false positive, differential security checks capable of spotting a range of subtle flaws, including blind injection vectors.

For those worried that this just further enables malicious script kiddies to hunt out and play with gaping holes in your poorly designed web app (or that budget SaaS vendor your CIO chose), Google included this disclaimer:

First and foremost, please do not be evil. Use skipfish only against  services you own, or have a permission to test.

We’ll see how long that lasts, but at least there’s another (open source, no less!) tool from a reputable company to help catch problems before someone else does. If you’re interested in a second opinion, the folks at Securi Security also took a closer look at skipfish, and left with a favorable impression.

Well, there’s a lot of good reasons, as it turns out, even if you are a cloud devotee. Also at the breakfast was Dan Richards, vice president of Constant Contact Labs, the edgier research division of cloud-based communications giant Constant Contact: He admitted that his company uses an on-site CRM appliance, which is a a bold statement considering CRM giant SalesForce is one of the darlings of the SaaS/cloud computing universe and one of the sponsor’s of Dan’s breakfast muffin.

So why not go with Salesforce, Google Apps or another mousetrap maker who specializes in that need and leave your IT to focus on your core business? Migration headaches is often a major head block, as are security concerns. What are your thoughts? Weigh in: Other community members are already debating cloud migrations in the forums.