Cloudonomics: The Business Value of Cloud Computing, + Website

Visibility and Transparency

With SaaS, customers have greater visibility into their costs; after all, receiving a bill every month that clearly indicates the direct costs: say, 473 users times $10. With owned software, it can be difficult to determine how many IT resources are actually used, including servers, storage, load balancers, accelerators, power, cooling, administrators, network, patching, security, and the like.

True, not all costs in using SaaS are represented by the bill from the SaaS provider. For example, there are will be network access costs. However, in most cases, network access must be provisioned for the endpoints anyway, so the marginal cost to a SaaS customer for network usage for SaaS may actually be zero. True, the provider must pay some network costs, but this is built into the price and is thus part of a charge with full visibility.

The difference is the same in eating a meal: It’s easier to determine the total on your restaurant bill than to figure out the cost in your kitchen, including the allocated use of your stove, the gas that it uses, the power for your refrigerator, your time as cook, and so on.

In addition, the trust factor requires that SaaS providers offer a high degree of visibility into their operations and status. Although for some providers there is no one to call and unhelpful customer service communications, such as “We are down. Check our Twitter feed for updates,” the leading providers offer a high degree of transparency into the state ...