The IT world is not free of bandwagons and the “cool” crowd. It’s like the age old question; Would you jump off the bridge just because your friend did? When you’re base jumping, then it’s an excellent idea; if you don’t have a parachute, it’s probably a poor choice. As manager of hosting services at Cherwell, I see so many who want to go SaaS, without the knowledge of the benefits to them. What are the criteria that make it a good idea and good fit, or a bad idea and bad fit?
Thus I give you, SaaS: the good, the bad, and the ugly.
When is SaaS a good idea…
SaaS is a good option when the fiscal model makes sense. Operational expense can be advantageous to the capital expense it takes to invest in hardware and software. It’s also great when you consider the aspects of disaster recovery, maintenance, and support. Customers can leverage the expertise of the manufacturer to manage the software better than they can themselves and the manufacturer can leverage economies of scale that are often beyond an individual customer’s budget.
You should discuss the options of lease or buy and on-premise or hosted with your financial team, as well as discuss and understand the technical hurdles with your technical team, and seek to understand what has the most business value. Cherwell gives you the unique ability to seamlessly move from on-premise to hosted and back again if the need arises. This flexibility and portability allows you to focus on what’s important to your business and generates the most value rather than focusing on the walls and constraints that are inherent in most SaaS models. It is important to understand that the hosting cycle can change as your business changes and that your service providers need to be able to adapt with you. Otherwise, they become the factors that limit your capabilities and ultimately constrain your business.
When SaaS is not the best option…
There are several factors that can contribute to a hosted service not being the right answer for your business. I would say the big one that most people would cite would be security and regulatory compliance. Although a lot of service providers are moving towards meeting the more common security and regulatory compliance requirements there is still a measure of risk involved. Do your due diligence! Understand first what your own requirements are and then look for a provider that can meet them. If they can’t, then they need to at least put a plan together in writing for how they will address any issues you have in a timely fashion.
Politics and personal preference also can play a big role in whether or not a company should go with a hosted solution. If senior managers aren’t on board and don’t clearly understand the benefits and risks, it can be a hard sale, and there are still a lot of misconceptions out there about what SaaS actually is. SaaS does not mean that the entire solution will be hosted. There are often technical requirements for a vendor to have an integration or proxy server in the customers network. When you are going to do complex integrations with a piece of software across the internet you need to clearly understand how this is being accomplished. Is the method secure? Does it use a local proxy agent or local integration component? What are the risks? What are the maintenance cycles and costs? These are all questions that should be asked up front.
The bottom line regarding SaaS
Finding a great SaaS partner and taking advantage of all the benefits that SaaS can offer you is a worthwhile business goal for anyone to pursue, but first you need to understand why it makes sense for you. If the IT department doesn’t step up and understand how they are creating value for the business with the choices they make, generally, there isn’t anyone else who can. You may find yourself locked into a bad vendor relationship with a system that can’t change and adapt with your business and that has left you with little choice but to scrap the whole thing and start over. As the manager of SaaS at Cherwell, I have seen more customers come to us in this state than I can count.