Updated 9/20/2010 at 4:48 PM ET with additional link.
First things first: What is Software-as-a-Service? From SearchCloudComputing.com:
Software as a Service (SaaS) is a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet.
Before you SaaS, Ask
SaaS is being hailed as a “savior” by some, but the perfect solution for a company that looks a lot like yours may be what sets your own operations and budgets back. Be sure to ask the right questions before deployment:
- Should your company rely on software built and utilized by hundreds of other companies?
- What are the possible repercussions of less specificity?
- What are the possible repercussions of the buy-over-build mentality?
- Is this functionality separate from other processes?
- Are you currently investing in unnecessary customizations? In other words, will outsourcing to SaaS simplify operations in a beneficial way?
- Can you afford to not own this functionality? Would downtime cause a disruption in business operations?
- Is there a service-level agreement in place to protect your company from downtime?
- Have you compared total cost of ownership (not just up-front licensing, but ongoing costs such as support and operations staff, hardware, etc.) to SaaS costs?
Benefits of SaaS (or why CIOs are foaming at the mouth)
We’re all familiar with solutions that look great on paper, but once they’ve been adopted past the point of turning back, they turn on us. Below are some of the reasons CIOs and other execs see SaaS as an answer from the heavens:
- Faster implementation
- Faster access to current technologies
- Fewer bugs due to less complexity and fewer chances at errors
- Lower cost for enterprise
- Reduced start-up costs; can get off the ground faster and cheaper
- Since vendors have less support spend, they can pass on savings to customer
- Less time spent managing compatibility and upgrades
- It’s the answer to across-the-board simple processes that allow time and money to go toward the more necessary and complex processes
Protect Yourself Before You Wreck Yourself
With the good always comes some bad, so be sure to know the ways you can protect yourself when entering this growing market.
- Service-level agreement
- Stringent security policies
- Rights to the software and data should the SaaS vendor go out of business
- Request permission to audit vendors’ controls
Money isn’t the only concern; often smaller companies with fewer resources outsource the risk in addition to the cost of keeping developers in-house. Look at the situation from the angle of worst-case scenario as well; would you be able to afford repair and recovery should something go wrong? If not, it may be worth outsourcing that responsibility to a third-party vendor.
For more information on the ins-and-outs and latest news on SaaS, check out SearchCIO’s Enterprise SaaS news section.