Application Hosting is not necessarily Cloud

These two terms are so much interchangeably used, many providers of application hosting services claim they are doing cloud and there is a great deal of confusion on characteristics and differences that I wanted to put my own perspective to hopefully clarify the concepts.

Traditionally, application hosting means you buy your software solution from the application vendor. A typical example would be SAP ERP application for your company. You would then install this software at a data center where either physical or virtualized servers that you own/lease reside.  You then install the application very much like it would be implemented 'on premise’. From then on, your IT department would be responsible for the maintenance (If the application is also maintained by external parties, this would be called managed service and we are not focusing on that concept). Application hosting is in extreme contrast to SaaS approach where you pay license fee/subscription fee to use the application and SaaS provider owns everything as in shown Figure 1 (at the end of the post). For example, Microsoft Office 365 uses SaaS model where you run MS Word with your new laptop on which you never installed office. You access MS Word through the application portal. The underlying OS, server model or VM hypervisor in the data center offering SaaS would be irrelevant to you as you neither installed the application nor will maintain it.

SaaS can be provided directly from the data centers of the vendor as in the case of Salesforce.com or Microsoft Office 365 or can use a public IaaS Cloud and/or PaaS Cloud offering. Dropbox SaaS for example uses AWS, which is classified as a public IaaS Cloud. In all these cases, application vendor owns the application and its maintenance and lets you use per your license/subscription through web portal or a thin client. For the case of application hosting, the traditional boundary of provider’s ownership nowadays tend to be extended. Application hosting provider, in addition to providing rack space, can now own the servers/VMs and can even now maintain the OS for you. However, in all cases of application hosting, ‘you’ purchased the application and ‘you’ are responsible for deploying and maintaining it. Leveraging the lack of clarity in terms, such hosting centers/data centers will call themselves ‘Cloud’. I will categorize them as non-cloud application hosting providers as they stretched the traditional application hosting model explained above. Please note that if you are working with a real Cloud provider, you can use their IaaS or PaaS offerings to host your application as well. This is called Cloud Based Application Hosting. Please see figure 1 for details of ownership for all these options.

Then, what makes cloud?

Definition of Cloud is that it is an automated and orchestrated data center providing self-service creation and elastic scale up and down of compute, storage and network resources for many tenants in a utility like pay per usage model through virtualization and abstraction and also providing access from anywhere you have IP connectivity.

In this comprehensive definition, I would argue that non-cloud application hosting providers can also be accessed from anywhere there is IP connectivity, can also provide multi-tenancy (more complex to configure) and can provide somewhat limited elasticity scaling up and down (if you just wait provider to do it manually subject to their schedule). The key differentials, then, remain to be the self-service request fulfillment in an automated and orchestrated fashion via a click of a button and pay per resource (compute, storage and network) usage that is possible with the dynamism and the abstraction/virtualization of resources (your VMs can change locations in the cloud and you will never be aware of it).

The bottom line is that even if the application hosting provider provides elasticity or multi-tenancy, if you are paying the so-called ‘Cloud’ providers per rack space and/or per server, you are definitely not working with a Cloud provider. Also, if the changes you are requesting are handled manually and taking long time (meaning no self-service automation and orchestration), you are not working with a Cloud provider. In this case you are working with an application hosting provider (traditional or non-cloud). This is why application hosting is not necessarily Cloud.

Figure1: SaaS, Application Hosting (traditional and non-cloud) and Cloud Based Application Hosting