Governments must lay foundation for SaaS

Governments should build out the national infrastructures to support large scale utility computing, to enjoy economies of scale, says Salesforce.com executive.
Written by Victoria Ho, Contributor

As the industry talks about the economies of scale that SaaS (software as a service) platforms can provide to user organizations, the best guardians of the underlying architecture are governments, a key Salesforce.com executive said.

Peter Coffee, director of platform research at Salesforce.com, said in an interview, in order to reap the economies of scale of SaaS delivered over a large architecture, governments must come in to lay the foundation.

Talking to ZDNet Asia, he drew the analogy of the U.S. interstate highway network to explain the need for national grids. "[The interstate highway] made our transportation costs go down, and made new centers of industry grow, boosting our economy," said Coffee.

Connecting systems in a country over large pipes and ensuring services can be delivered quickly over a common platform is akin to building physical rail and road infrastructure: "Today, the tower of economy is in creating new content and exchanging ideas, and in managing talent and capital," he said.

Highlighting Singapore's investments in building a national broadband network, Coffee said: "What far-seeing governments understand is that some of these things are best done at the level of a national commitment and national priority, because they are enablers of national achievement and success.

"You can't rely on the private sector to build an extensive network" like the interstate highway--and similarly a national grid to serve up SaaS products to the public, he added.

Singapore also recently announced the launch of its first SaaS incubation center, which aims to accelerate the growth of SaaS startups in the country.

Coffee sees this as an opportunity to populate the market with a variety of services end user companies can put together for their particular needs. "Today, an enterprise can go shopping in the cloud and buy some storage here, some social networking framework there, and put together something strategic and unique that does not require any new servers, square footage or administrative staff."

SaaS companies differentiate the same way other software companies do--by providing unique features and services, he said.

By extension, the oft-used image of utility computing being like getting electricity from a large source is inherently flawed, he added. "A watt of electricity is a watt of electricity no matter where I get it from. But buying compute cycles from Salesforce.com is not the same as getting it from Amazon.com."

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