SaaS ISVs do face a choice these days of deploying their software on the cloud - Public or Private. Private Cloud is your infrastructure behind a firewall. The infrastructure can reside in your data center or at a hoster like Savvis. Public Cloud is services like AWS which does not require you to set up your own infrastructure.
I read an article which talks about using a Private Cloud first to navigate the waters before jumping on to a Public Cloud. You can read the article on why Private Cloud might be a good place to start.
Building a Private Cloud starts with standardizing your operational environment and implementing virtualization. Oracle started doing this quite some time back. As has been well documented, consolidation of datacenters along with business process standardization and self service initiatives saved Oracle more than 1B. Now, Oracle IT is standardizing the operating env and has become the biggest user of Enterprise Linux. Virtualization is changing the game for us. The obvious benefit is hardware consolidation. The other more substantial benefit is, Oracle VM allows IT to decouple the software from the hardware (software can be certified on Oracle VM and x86 hardware can be bought later as needed). Virtualization allows compute resources (hardware) to be built generically and applied for compute needs (software) as needed. Oracle Data center is a pool of low cost hardware clusters on which a VM Gold image can be quickly deployed as needed providing us massive elasticity to respond to real-world demands while allowing us to manage the grid effectively. Oracle Enterprise Manager allows us to provision & manage application, accelerate detection and perform diagnostics and remediation.
For large ISVs, with their own data centers, and hosting providers, supporting smaller ISVs, there is a lot to be gained by taking this first step towards building a private cloud.
