Relationship To Software As A Service (SaaS)
With the rise of virtualization as a platform for hosted services provision, virtual appliances have come to provide a direct route for traditional on-premises applications to be rapidly redeployed in a software as a service (SaaS) mode - without requiring major application re-architecture for multi-tenancy. By decoupling the hardware and operating system infrastructure provider from the application stack provider, virtual appliances allow economies of scale on the one side to be leveraged by the economy of simplicity on the other. Traditional approaches to SaaS, such as that touted by Salesforce.com, leverage shared infrastructure by forcing massive change and increased complexity on the software stack.
A concrete example of the virtual appliances approach to delivering SaaS is the Amazon Elastic Compute Cloud (EC2) - a grid of Xen hypervisor nodes coupled with the availability of pre-packaged virtual appliances in the Amazon Machine Image format. Amazon EC2 reduces the cost-barrier to the point where it becomes feasible to have each customer of a hosted SaaS solution provisioned with their own virtual appliance instance(s) rather than forcing them to share common instances. Prior to EC2, single-tenant hosted models were too expensive, leading to the failure of many early ASP offerings.
Furthermore, in contrast to the multi-tenancy approaches to SaaS, a virtual appliance can also be deployed on-premises for customers that need local network access to the running application, or have security requirements that a third-party hosting model does not meet. The underlying virtualization technology also allows for rapid movement of virtual appliances instances between physical execution environments. Traditional approaches to SaaS fix the application in place on the hosted infrastructure.
Read more about this topic: Virtual Appliance
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