Several years ago I received a link to a site offering online databases without the hassle of running an online database. I automatically dismissed it as too complicated or limited. When I needed an SQL server I used the MySQL database that came free with my virtual hosting account. Everyone else? They didn’t need an online database.

Fast forward to 2011 and such services are passé. Why? Because we discovered that databases can be commoditized. Lots of things can be packaged into simple bites that make them easier to consume and there’s nothing wrong with that. When it makes sense we should be flexible with our concepts. Software as a Service (SaaS) at its heart is all about buying just what you want.

When opening a new office you have to choose whether to buy or rent the things you need. Owning the building or the coffee maker doesn’t make sense when you meet for 8 hours a day or drink only 2 cups of coffee. Why should software be any different? It isn’t, but the argument has been made that “why buy your software as a service if you can simply roll your own.” The answer is the same when people move from physical servers to virtual. You don’t always need more, even if it comes “free” with the service. It’s the reason the Cloud has taken off  like gangbusters.

Recently I read a blog post took the position that SaaS would be sacrificed on the altar of IaaS and PaaS. We have to be careful we don’t limit either layer by placing too solid a line between them. They overlap and where they do it’s because those layers have taken over some of the functionality of the one below.

Cannibalism is more likely in the traditional Hosting space than the Cloud. Traditional colocation is replaced by IaaS and complicated managed application servers are replaced by Platforms. Companies consider SaaS because it’s no longer appropriate to build and house large, complex systems that serve only a single purpose. Perhaps the word cannibalism is the issue here. If we consider how each new layer of the Cloud transforms the old one we see that what looks like cannibalism is more likely the natural evolution of a product.

Why not replace the word “cannibalize” with the phrase “will evolve into?” Where PaaS blends into SaaS you receive all the benefits of paying for what you need, but you also get the extras you want under PaaS. This appeals to the small business with one or two Citizen Developers just as much as it does to the Enterprise IT shop. Enterprise shops have stricter requirements and find the PaaS elements inside many SaaS service compelling.

I will make a prediction, though. The cannibalism that will come is a fight over the same IT dollars we all fight over in this industry. IaaS absorbs traditional colocation dollars. PaaS will claim the Managed Hosting budgets. SaaS will woo those who only need what comes from the labors of those who came before. It claims everything else because it’s on the menu at a price people can afford.

And honestly, it’s a pretty tasty dish.

So what do you think?  What role do you see for SaaS, PaaS and IaaS?  How do they compliment each other.  Do you see a cannibalization emerging?  We look forward to your comments.
Jeff Morgan Lead Product Marketing Manager AT&T About Jeff