consumers think about the electricity that powers their applications. But for
the enterprise sector, whose reliance on SaaS is growing, this is not something
that can be ignored.
leaves many questions. How is the energy use and cost being priced into the
services such as SaaS? Are SaaS providers paying too much for power?
providers are focused on cost per transaction; meaning this becomes a question
for the data centre operator. Should SaaS providers demand energy cost
transparency and that data centre power provision be more flexible and
figures below reveal there is little doubt that SaaS is taking over the global
enterprise software market. So, what are the power cost implications for SaaS
players and their data centre partners?
first glance SaaS, like its enterprise application perpetual licence forebears,
may appear many layers above and removed from the physical equipment and energy
needed to make it work.
promise of SaaS (and cloud as a whole) is that it fulfils the desire of IT
organisations to abstract their own service provision away from the
if the enterprise is no longer managing the infrastructure then this falls to
the SaaS provider to source – through building or buying – the data centres and
power to deliver these applications.
energy consumed by SaaS instances doesn’t usually surface as a consideration
when selecting which SaaS platform to use. (At least not in the public domain).
But as the world focuses on reducing energy consumption and GHGs this is likely
How SaaS applications are powered has huge implications across the entire supply chain of utility companies, data centre providers and ultimately end users.
SaaS Eating the Enterprise World
revenues in enterprise applications are expected to be around $450 billion in
2020 and the market is expected to reach nearly $500 billion in 2021.
we unpack this, an increasing share of the enterprise application market is
going to be SaaS based.
According to FinancesOnline much of the enterprise applications world is already SaaS based.
a key component of the cloud computing market, the global SaaS market size is
estimated to end up at around $158.2 billion in 2020. With a CAGR of 11.7% in
the next four-year period, the projected SaaS market size will be about $307.3
billion by the end of 2026. In 2020, it is estimated that the overall worldwide
SaaS penetration rate will be at 36%.” In the collaboration application segment
SaaS penetration is getting the lion’s share at 81% of the market, it says.
biggest SaaS applications are collaboration, human capital management, CRM,
ERP, BI, SCM and Content.
list of the world’s top SaaS companies usually places Salesforce at the top,
even before it announced its intention to buy Slack for $28 billion. Microsoft
is usually number two followed by firms such as Adobe, Box and Amazon Web
Services (AWS) SaaS. From the traditional enterprise software world firms such
as Oracle, Docusign and IBM software are not far behind along with firms like
Servicenow and Workday.
What every SaaS provider has in common is knowing how to sweat their assets.
Where SaaS Resides
big SaaS companies can be split between those that own and operate data centres,
Microsoft, AWS and others that buy data centre services. SaaS companies
generally run a hybrid mix of data centres from the commercial colo space and
The delivery model is based on redundancy. Salesforce says: “Customer success drives our data centre strategy and delivering the highest standard in availability, performance, and security is our top priority. To that end, we build and serve each Salesforce instance from two geographically diverse data centres to have availability our customers have come to expect from us. At any given time, your Salesforce instance is actively served from one location with transactions replicated in near real-time to a completely redundant, secondary location. We regularly site switch between the locations for maintenance, compliance, and disaster recovery purposes. As we continue to expand and improve our global infrastructure presence, we recommend customers build their applications free of specific data centre requirements to support a seamless Salesforce experience.”
It adds: “In addition, we
have instances served from AWS Cloud infrastructure in the United States,
Canada, and Australia. These instances are located in two or more separate
Availability Zones within each respective country.”
So, the model is clear. SaaS provision operates
on redundancy from paired data centres. This is true for every enterprise SaaS
Why Power Costs Matter
very interesting but what has this to do with the price of butter?
per transaction is a priority for SaaS companies. The SaaS business model
demands providers look to drive out costs and get the greatest ROI from their
assets wherever and however possible.
those SaaS companies which rely upon colocation data centres don’t have control
over the power element of their cost base, because the way data centre power
topologies have been designed dictates how power is provisioned. They are fixed
and wasteful. As SaaS continues to scale, power costs as a percentage of cost
of goods can only rise. If SaaS providers are paying too much for power or
having to pay for power they don’t use then that becomes an additional cost to
be passed on to the end user.
The Answer lies in “Power as a Service”
are some questions:
- Will enterprise customers be forced by regulators
to account for the energy and carbon cost of their SaaS applications?
- As customers of commercial data centre
operators, will SaaS providers demand access to flexible and adaptable power?
- How can data centre operators respond?
- Can inflexible power provision in data
centres be addressed without ripping and replacing the existing infrastructure?
address these questions, indeed to answer many other questions which are
starting to surface about cloud provision of all kinds, ‘Power as a service’ (PaaS)
needs to become an available offering from service providers. Fortunately,
technology already exists which can enable the sorts of fixed data centre power
systems which are ubiquitous to fulfil the adaptable and redundant power
requirements of SaaS applications.
Redundant Power (ARP) from i3 Solutions Group, is one such solution
designed to address many of the flexibility requirements to make PaaS a reality
for SaaS environments. By making energy use more economical and flexible, ARP
technology brings agility to data centres by accessing trapped power and
reconfiguring the power system topology to provide granularity to match SaaS
service levels. The obvious benefits are power resilience better aligned with
SLAs, more efficient utilization and the reduction of needless emissions.
the end all costs of production and delivery are ultimately charges the
customer must bear. Unlike consumers, enterprises cannot ignore the cost of
electricity that powers their applications. At the same time, SaaS market
players will likely face more regulatory and investor scrutiny of their power
use and carbon footprint. Neither they nor their data centre partners can
afford to risk letting the cost of power spin out of control. Smart commercial
data centre operators who are hosting, or wish to host, large SaaS customers
can add value to their offering by providing PaaS based on technologies such as
Ed Ansett, Co-Founder and Chairman of the i3 Solutions Group