4 issues with using Software as a service (SAAS)
4 issues with using Software as a service (SAAS)
Posted by: Krishna Kumar in Ideas on Sep 20, 2009
Many, including yours truly have written reams about the advantages of using software as a service instead of software installed just for you, at your premises. But none have dwelt upon the problems you can face as you go along. And rest assured, there are enough problems with SAAS.
Before we jump into the problem areas, let us for the record summarize the plus points of SAAS.
1. It takes away the pain of installing and maintaining the software and of having the people required to do it
2. It converts a capital expense into an operating expense
3. The operating expense itself is made up of a stream of smaller monthly, quarterly or similar payments rather than a one time payment, easing your cashflow
4. It is easily scalable. You can add more users or more capacity as and when you need them.
And now, the flip side; what can go wrong
1. When your own cash flows get tough, as many experienced during the current economic woes, SAAS commitments can really be heart wrenching. I know of many who wished at least once that they had done the traditional model when times were good.
2. Problems the creators did not provide for- SAAS is good for standardised stuff. Very few SAAS products have a rich plugin environment that extends the basic functionality provided. Even then, if you have a very specific requirement, it is often impossible or very costly and time consuming to implement a work around.
3. When things go wrong, you may find that there is no human you can talk to. Typically, you do not speak to anyone to get a SAAS account. Most likely, you signed up at their web site and paid with a credit card. Possibly there are a few email that went back and forth. This is good as long as things work. It is when things go wrong that you need to speak to some one to sort things out. And I realized too late that there is atleast one SAAS provider out there who does not provide a contact telephone number!
4. When the service provider goes belly up - Blame it on the economy but SAAS providers too go bankrupt. And when they do, they often do not give you enough notice. And when they do, they not only take the service, but also your data with them. And you are not sure whether to scramble to replace the now defunct service or to go after the data that is lost for ever.
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Of the 4 issues you raise, perhaps the one about having to make a committed outflow every month is perhaps one that is unique to SaaS. Even so one must account for the fact that you probably saved a pile in upfront outflows that should mean that you have more cash left to tide a downturn than if you had made the CAPEX.
The other 3 risks are inherent to any software product and pretty much also present even with on-premise products. A good SaaS vendor will offer a user driven roadmap to give you a fair chance to get the functionality you need but with an on-premise model your only hope is a costly and time consuming "customisation".
A vendor going belly-up is painful even if you have the product installed. In most cases it would be as good as dead as you would be running the stuff knowing that if it stops there is no one you can turn to.