How a Hosted Software Delivery Model Differs from SaaS for Kubernetes Management and Operations

March 14, 2022

Over the past several decades a debate has raged between software as a service (SaaS) and on-premises (or in VPC) software delivery models. Both approaches make sense depending on the use case for the reasons that will be described below, however, enterprises should carefully evaluate each in order to determine the approach that best meets their needs. Another approach, called hosted software, attempts to bridge the cost and IT gaps between SaaS and on-premises software.

This blog aims to address two things: 1) Examine the differences between SaaS and hosted software delivery models in general; and 2) Understand how these two models compare when applied to Kubernetes management & operations, specifically Rancher (hosted software) and Rafay (SaaS).

What is Software as a Service (SaaS)?

A fundamental tenet of SaaS is multi-tenancy. A single instance of the software runs on servers in the cloud and can be consumed by multiple companies in parallel. Because the customer count may be dynamic, SaaS applications are designed to automatically scale and are typically metered by some consumption model that suits the given industry. SaaS enables software consumption over the Internet without the cost, complexity, and IT management overhead associated with hardware and network management, scalability and availability, disaster recovery planning, etc., that are typically involved with on-premises software.

Recent research finds that the SaaS market is still growing by 18% per year globally. Why do enterprises choose SaaS? 70% of CIOs claim that agility and scalability are the top two motivators for using SaaS applications, but there are more reasons, including:

• Deployment time: time to value is fast with SaaS, with deployment time measured in hours or days vs. months.
• Robustness and reliability: included with an uptime guarantee.
• Zero technical preparation: required from the enterprise, e.g.:
  • No input is needed from the customer for sizing of service.
  • No software installation & updates.
  • Zero hardware sizing.
  • Guaranteed network access and redundancy.
  • Backup and data isolation.
• Multi-Tenancy: Multiple users and groups can leverage the same application with isolation boundaries.
• No upfront costs: and flexible pay-as-you-go pricing model.
• No need for hiring expensive and hard-to-find teams of technical experts.

Although SaaS customers share a common infrastructure, logic exists so that each tenant has access to a separate and isolated view of the solution backed by SLAs to ensure reliability, governance, and security.

Another key benefit is that the SaaS vendor manages software feature improvements, patches, and security updates. Once done, every enterprise employing the service benefits without worrying about compatibility issues or testing with the underlying infrastructure of the solution.

What is Hosted Software?

One step removed from on-premises software, hosted software requires enterprises to purchase a software license but rely on the software vendor to install, host, and maintain that software on dedicated hardware in a data center or in the cloud. The data center or cloud could be owned or provisioned by the customer, the vendor, or a third party. Typically, companies may have to play a part during some portions of the setup process, including infrastructure sizing, networking configuration, and testing.

How Hosted Software Differs From SaaS for Kubernetes Management & Operations

In order to alleviate the cost and overhead associated with on-premises software while claiming some of the benefits of SaaS, traditional software vendors have begun offering their products as hosted software. However, if a solution is designed from the ground up to be consumed by one team at a time, there is virtually no way to retrofit that to be multi-tenant SaaS.

In the Kubernetes management and operations market, an excellent example of this is Hosted Rancher offering. Why is Rancher providing this option? Because, in Rancher’s own words, installing and operating a hosted Rancher controller can be quite burdensome for customers (source: www.rancher.com):

• Focus on Day 2 operation: “Teams can focus on deploying and managing more clusters and let our expert team handle the operational overhead of SUSE Rancher Hosted.”
• Lower Total Cost of Ownership: “Offloading the overhead for managing your SUSE Rancher Hosted control plane not only reduces operational risk but is better economics.”

However, Hosted Rancher software was not designed to be SaaS. Here are several examples highlighting how Hosted Rancher compares to what enterprises should expect from a cloud-native, SaaS delivery model for Kubernetes management & operations:

1. Multiple Tenants with Isolation

It is extremely common for enterprise operations teams to require separate environments with isolation boundaries for development, QA and production purposes. With a SaaS offering such as from Rafay, the ability to create an unlimited number of separate tenant/organizations is available to enterprises at no extra cost.

2. Infrastructure Sizing

The supporting infrastructure needed to host a Rancher controller for an enterprise with 5 clusters is not the same as a customer with 50 clusters. As a result, the Hosted Rancher operations team will need to perform both initial and ongoing planning of the infrastructure required to operate numerous Rancher controllers.

3. Timely Software Updates

With SaaS, upgrades and enhancements are implemented once by the software vendor and are instantly made available to all customers. With Rancher's hosted software model, this simply cannot happen given that each hosted instance is an independent instance per customer.

4. Licensing Limitations

Hosted Rancher is only available to Rancher customers licensed with a Platinum support SKU. True SaaS offerings do not have any such limitations.

5. Technical Limitations

Other technical limitations are amplified when a vendor offers a hosted software option. For instance, Rancher's hosted software does not support the use of cloud credentials with IAM Roles for Amazon EKS lifecycle management.

6. Security Posture and Compliance

For SaaS offerings, security and compliance is an important concern. Enterprises can expect SaaS offerings to have SOC-2 Type 2 compliance and a continuously improving security posture for their service.

Which Kubernetes Management & Operations Deployment Model Is Ideal for You?

Ultimately, enterprises need to choose their preferred deployment model. Many enterprises will require air-gapped deployments and prefer to deploy software on-premises or in a VPC. But if your business prefers to consume software as a service, there is really no upside in using a hosted offering.