Lately it feels like everyone is fixated on Infrastructure as a Service. In fact, for many, when we discuss cloud they immediately think Infrastructure. But there are two other main cloud service categories and they are Platform as a Service and Software as a Service. I believe Software as a Service will be the dominant cloud service in the future. Why you might ask? It is simple, because application sharing drives the highest scale economies.

Now I understand that not every enterprise application will be replaced by Software as a Service. But all back office applications, especially those that are commonly used across companies and industries, will end up in the cloud. For example, expense management, sales force automation, project management, and human resources applications, to name a few, will all reside in the cloud. Smaller firms will use more Software as a Service than larger firms, but, in general, everyone will use it.

Critical “run-the-business” applications that are core to one’s business will remain in house. For example, large hospitality firms will not be moving away from their home- grown critical booking application anytime soon. These capabilities are key differentiators and will not be shared. For these Infrastructure as a Service will be used to drive efficiencies.

So what does this mean to IT?

1) IT will have to shift their focus from building and maintaining applications to integrating a variety of cloud-based services.

2) Corporate-owned data centers will be consolidated. They will use Infrastructure as a Service to consolidate even further.

3) IT will have a renewed focus using technology to improve the core business. For example, they will look to use technology to improve customer experience or expedite the selling process.

If you are wondering about Platform as a Service you will have to wait for a future article. Platform will serve those who need a little more customization then they can get from Software as a Service but delivered in a much more turn key manner than Infrastructure as a Service.

How much Software as a Service do you use today?  Do you plan to move back office applications into the cloud?  We look forward to your comments.