We recently came across an interesting article on Software as a Service (SaaS) in Information Week titled “SaaS: Still Not Simple as a Service.” The piece was penned by Lawrence Garvin, technical product marketing manager at SolarWinds, and he correctly points out the expanding contribution SaaS solutions play in helping organizations become more responsive to business opportunities and providing alternative technology options. While Mr. Garvin identified several concerns with the shift from software to SaaS, we found several of his comments to be incomplete. Below we look at the specific areas we believe need additional discussion:
Cost – It is true that the cost structure of SaaS versus software must be taken into consideration as part of any decision. The article’s focus on “increased Internet connectivity cost” as a downside to SaaS is misguided. Many “total cost of ownership” models address the cost issue much more completely and should be used in place of the more limited connectivity cost mentioned in the article. These models go beyond simple connectivity cost to include the cost of servers, computer rooms, IT support personnel, etc. Use of these more comprehensive models will help you make better investment decisions.
A second area mentioned in the article concerns the complexity of managing multiple browsers used by a variety of SaaS providers. We were a bit surprised to see this as an issue, as most of our clients and prospective clients require us to be compliant with their browser policy. If your IT department is struggling with this issue, you should probably consider changing your procurement process to require SaaS vendors to comply with your browser policy.
A third area discussed in the piece concerns the areas of data ownership, backup, and security. Frankly, none of these issues should prove to be insurmountable if you pick the right SaaS provider.
- The issue of data ownership is easily handled through your procurement process. Making this a requirement will quickly eliminate some SaaS providers. Many providers understand the client’s desire for this certainty and embrace this requirement as part of their standard SaaS offer. You will be able to find SaaS providers that assure complete ownership of your data.
- Data backup - Having access to your data can be easily accomplished through more standard practices such as data escrows. Expand your focus from access and backup to include attention on the unique application and use of the data, and have a plan for how your business will transfer that data into a similar solution or software product should the need arise.
- Data security - This is an area that will continue to demand more attention and investment in the near term. The article focused on data encryption. While important, we find many businesses pushing us to address a number of areas, including intrusion detection, data at rest (i.e., inactive data which is stored physically in any digital form), firewall security, disaster recovery, and service level agreements. Depending on the size of your company, it may make sense to leverage the capabilities and investment of a SaaS provider to achieve higher performance than the organization could possibly hope to achieve on a stand-alone basis.
Lastly, it appears that the most compelling reason to “go SaaS” is found in the article’s first paragraph, which states that there are now “hundreds of successful SaaS vendors.” We believe this success stems from one cost that is not mentioned previously - opportunity cost. Our clients find that the adoption of SaaS has greatly increased their ability to compete by accessing and implementing new capabilities more quickly and cost efficiently. These benefits, coupled with faster startup, eliminate the often long wait times associated with gaining access to scarce internal IT resources.
We believe forward-thinking organizations will find that integrating SaaS applications with existing legacy systems will help IT organizations embrace new and better ways of doing business. This change shouldn’t be viewed as bad but as a way to affirm the strategic contribution the IT organization can make to the business.
If you have further questions about any of these issues, please contact us at email@example.com.