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Cloud Computing: Who Owns the Castles in the Sky?

Cloud computing has been a hot topic for years, but most companies are still in the early stages of adoption.

As IT workloads shift to the public cloud over the next several years, opportunity abounds for infrastructure- and platform-as-a-service vendors, or IaaS and PaaS, respectively. However, as explored in a recent Technology Observer from Morningstar Research Services,1 only a handful of providers have the capital investments, research and development initiatives, and technical knowhow necessary to predominate.

To learn more about the best investments in this space, I spoke with lead author Rodney Nelson. Our conversation took place on Aug. 1 and has been edited for length and clarity. Laura Lallos: Many of us are most familiar with software as a service, or SaaS. How do the platform and infrastructure as a service markets relate?

Rodney Nelson is an equity analyst with Morningstar Research Services specializing in enterprise software. Rodney Nelson: The difference between SaaS and PaaS and IaaS is all about who is managing which part of the software and hardware stacks.

With SaaS, a single vender, such as Salesforce.com (CRM), manages the entire software stack, including the physical server, the database, the operating system, the middleware, the bins, the libraries, and the underlying code for the application itself. With PaaS and IaaS, the customer has more ability to customize.

With IaaS, the only thing that the cloud vendors do is manage the core compute and storage services.


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