Counting the cost of SaaS

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Recently I had the pleasure of 12 hours on a Boeing 777 with a disgruntled ex-banker. Having recently parted ways with his £250K a year job, he was heading into the sun to contemplate his next move. Between copious quantities of G & Ts my new best friend opined on everything from the Government to cooking tips.

Most of his advice was highly questionable, but one of his pearls of wisdom did strike a chord. He commented that in a down turn people look out for themselves, and the smart business owner shouldn't trust anyone.

Now because of the way my brain is wired, I immediately put this into the context of the IT world. What struck me was the question whether, in the light of the recession, we can afford to trust others with our business critical services?

I spent a good few years exhorting businesses to adopt a more relaxed approach to outsourcing and Software as a Service (SaaS). Now I am beginning to have second thoughts. Privacy concerns aside, my other SaaS-based arguments are slowly unraveling and many SaaS vendors are failing the small business owner. After some research it would appear that I am not alone in this view. I was quite surprised to hear from a number of companies (both large and small) that have significantly changed their approach to SaaS in the light of the downturn.

One of the fundamental differences between SaaS and the more traditional desktop-based software is control. All software evolves; it grows, develops and changes. When desktop software changes you choose what happens. Upgrading can be done to fit around your timetable. However, when a SaaS vendor upgrades, that choice is out of your hands. You may not even get to hear about it.

Recently a friend learnt this lesson the hard way. He had signed up for an online accounting package on my recommendation. Three days before his tax return was due, he was furious to discover that the service was going down for a day's essential maintenance. Having finally got access to his accounts, the entire interface had changed. This wouldn't normally be a problem, but a day's worth of tutoring for his fraught book keeper wasn't meant to be part of this bright new world.

The second point to consider is the "what if" equation. What would happen if your service provider suddenly went out of business? SaaS vendors have a major disadvantage over traditional software vendors. Sure you could lose your support and future upgrades, but at least you can keep operating in the meantime, and plan a timely migration. In contrast, there have been numerous recent examples of SaaS vendors vanishing along with their servers. Even if you are lucky enough to have notice that a vendor is pulling your service, have you even thought about how you can get your data out?

SaaS makes sense if the vendor behind it is savvy or professional enough to realize control is essential to business. There are a number of offerings out there that do a great job. But they are in the minority and generally come with an unattractive price for the small business owner.

Posted at our sister site, BusinessZone by Benjamin Dyer, Director of Product Development for Actinic. Ben heads the development of Actinic's portfolio of ecommerce and retail applications.

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