Pure cloud SaaS Vs Cloudwash

Date: May 23, 2014

Five questions to help you spot the difference

We all know that cloud computing is here to stay. It’s no longer just an IT industry buzzword that over promises. It’s something that is bringing real benefits to millions of businesses all over the world. Whether this is rapid and easy deployment, frequent upgrade cycles, lower cost of ownership or enhanced client service, cloud computing and Software as a Service (SaaS) applications are good for business. But not all companies are willing to do the hard work from the ground up and are instead taking shortcuts by pushing existing legacy software into the cloud. This is what we call ‘Cloudwash’ and we will help you spot the difference.

So, how do you spot the real thing from an empty marketing message or systems that have been hastily migrated to the cloud? StatPro has spent over $30m over six years developing a pure SaaS application and launched StatPro Revolution in March 2011, the world’s first cloud-based portfolio analytics platform. This isn’t something you can simply push a ‘migrate to cloud’ button with. These applications are built from the ground up and designed for cloud delivery, scalability and security from the very first line of code.

What is a pure play SaaS application and how can you compare one service versus another and why should you care?  Well, the simple reason you should care is that Cloudwash applications do not deliver all the benefits you may be expecting. You may be sleepwalking into another IT project that is as flexible as an oil tanker and as cost effective as an English Premier League football team. I’m going to give you five questions you should be asking the application vendor and the answers you should be getting to help you spot the difference.

Read: New Insights for Asset Managers: How Technology Can Drive the Most Effective Middle Offices


1. How many versions of the system are in production?

The answer should be one.

Why? True SaaS applications are single version, no matter how many clients are using the system. This is called multi-tenancy. Think of it like a five star hotel. Lots of private rooms with security and even safes in the room, but they’re all in the same building. They share the pool and the bar and if the hotel upgrades its facilities then everyone benefits at the same time. All the rooms are secure but the hotel can get access with permission to clean and service your room. If your solution has multiple versions then you have something called ‘the software grid of death’ – lots of live installations with different versions everywhere. This is bad because it means the software vendor has to maintain all their clients while trying to write new versions of the software. They must divert resources to support legacy implementations instead of focusing on innovation. It also means you have to wait your turn when it comes to upgrades. Are you first or last in the queue?

2. Does the service run on shared hardware or your own dedicated server?

The answer should be shared hardware.

Why? Sounds counter intuitive, you want your system on your own hardware right? Wrong. A true cloud based SaaS application runs on shared hardware. This is a huge benefit because of software scalability. Your system can only run as fast as the hardware it is installed on. If you are installed on your own dedicated server then its performance will plateau at some point and won’t run any faster. Not good when you want to load more data and get your analysis and reports in time. A true cloud-based SaaS application is scalable. It has access to hardware that is elastic. It can grow as more demand is placed on it. You simply ‘spin up’ new servers and keep on scaling. SaaS applications, like StatPro Revolution, have been written and built especially to utilize hardware in this way. Applications pretending to be real SaaS still sit on side by side servers that cannot scale. 

3. What is the update schedule? How many updates get released each year.

It should be frequent – at least five or six updates a year.

Why? With SaaS you’re paying for a service. You shouldn’t have to wait 12 months before you get new functionality. The beauty of a real SaaS application is that it’s much easier for the software vendor to issue new updates and improvements because they only have to do this on one environment. SaaS vendors don’t have to manage IT upgrade projects so they do what they do best, make great software. You may think that too many new versions could be a problem. How can I keep up? How can I test all these changes? Testing everything is an old legacy process that you may be used to with traditional software or software masquerading as cloud. You don’t need to test everything every time there is a new release because they are in smaller bite-size pieces. When you get a huge dump of new code every 12 months then you need to test many things. With SaaS and the cloud, you don’t, you simply log in and start using new functionality. Frequent updates also mean your software vendor can listen to your requirements and needs. They can be agile enough to get these updates to you quickly rather than fake cloud vendors who may take 12 months (and that’s if you’re first in the update queue!).

4. Is the platform secure? Has it passed external security audits?

Well, obviously the answer should be yes and yes.

Why? Do you really need to ask? There have been many well publicized Internet security incidents over the years but how much of a risk do they present to your data and your service? Are real SaaS systems more secure than fake Cloudwash systems? Very much so. Cloudwash systems are basically old traditional applications with a new web based interface. This new interface may be secure, but is the back end database? Is your data encrypted? Legacy applications that have been migrated to the cloud always add security as an afterthought. It wasn’t baked in from the beginning. Security in pure SaaS applications is paramount because of the multi-tenant features and the fact that they are designed to be internet facing. It’s like building a house then thinking about adding a security alarm afterwards versus building a castle and designing it be secure by digging a moat and adding a draw bridge from the very start. Passing well known industry audits is key to demonstrating a vendor’s competency in application security. Look for things like ISO27001 and SSAE16 certifications. Also ask about penetration tests, not quite as painful as they sound but they effectively involve a specialist security company ethically hacking your service to test for vulnerabilities. These are an essential part of maintaining a secure service. Not many Cloudwash solutions would pass such stringent tests.

5. Does the system play nicely with others?

Yes, pure cloud SaaS applications think about integration with other systems

Why? You use many applications and they all generate data in some form or another. It’s very common to share data between applications and to integrate them together. Data is the essential ingredient in any portfolio analysis platform and it can be a very time consuming and expensive thing to manage. The last thing you want is to deploy a new platform then be left to integrate the data by yourself. StatPro recognized this a long time ago and has integrated market data directly into StatPro Revolution. We’ve even integrated with over 30 fund administrators to provide seamless access to portfolio data. Cloudwash systems that are not true SaaS multi-tenant applications often have multiple versions with various release cycles (see question 1). They don’t always have easy ways to integrate leaving you to build your own solution to get it to talk with anything other than itself. If you have to build your own integration solutions you may get left behind when a new version is released that breaks your integration and leaves you with a big problem. Pure SaaS based applications often include something called a web API. This is an interface that allows you to connect with all your local applications or even other cloud based platforms. This interface is supported by the software vendor and you’re never left alone to maintain it yourself. As new versions are released you simply get access to more data that you can integrate with other systems. So, always check with your vendor that their solution plays nicely with others.

Hopefully these five questions will help you spot the difference between pure SaaS applications and Cloudwash marketing waffle. StatPro realized that the cloud was the future of all software delivery back in 2007 when we started an R&D project. We began full time development in 2008 and have been banging the cloud drum ever since. We’ve recently noticed many others doing the same thing, but strangely enough not all the solutions out there are new, they have simply been ‘migrated’ into the cloud. There is no short cut. Beware of Cloudwash. StatPro Revolution is the real thing.

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