Can We Take Some of the Sass Out of SaaS?

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August 24, 2007

Can We Take Some of the Sass Out of SaaS?

My colleague Beth Gold-Bernstein recently recounted a Software-as-a-Service experience with an all-too familiar ring. That is, when an error occurred in the application, she made numerous attempts to first fine, then contact customer support. She eventually inadvertently found herself on the line to the owner's mother. (Then again, it was the "parent" company Beth was trying to reach...)

I too, use SaaS-based vendors to do survey research work. One vendor I was using earlier in the year had an application that worked okay, but the vendor had a nasty habit of taking the system down for upgrades or maintenance without first telling customers.

Last February, I had prepared a survey for launch on a Monday morning, timed with a large email blast. I happened to be on the road in California, and three hours after the 9 am Eastern Time launch, I found out -- through worried emails from the survey's paying sponsor -- that the survey form wasn't coming up in the browser. Working the crisis from a hotel room, I found out that the survey vendor had taken the system down over the weekend, and ran into complications trying to install the new system.

That time they answered their phone, but a little while later to my chagrin, they were taken over by another company, and the support representatives I was used to calling vanished.

Yes, there is a risky side to SaaS. Beth points to the spotty service that one SaaS vendor provides. Another issue is data -- who stores, manages, and has control over your data?

A few months back, I spoke to Dave Mitchell, director of software-as-a-service strategy for IBM, who noted that “most of the start-up application vendors are selecting SaaS [Software as a Service] as their primary model, and increasingly as their sole model for delivering applications.” If you're going with a SaaS-based startup, what guarantees do you have that they'll be around and up and running six months from now?

Dilip Wagle, a partner with McKinsey & Company, told me that one of the biggest risks is that end-user companies may have less control over the reliability about how their data is managed. ‘Pure ‘in-the-cloud’ services imply that all the customers data are essentially stored off-premise in a data center owned or contracted by the service provider,’ he explained. ‘In the event of data center failure on the part of the service vendor, the customer has no recourse but to hope that data were appropriately backed up and managed in a secure fashion. The problem can be exacerbated if the SaaS vendor in turn, outsources back-end data center operations to yet another third party. This can complicate accountability and liability in the event of failure or security breaches,’ Wagle said.

SaaS is quickly displacing the install-from-the-CD-and-cross-your-fingers approach to software — good riddance to that. But SaaS also makes us even more reliant on third-party firms which may be here today and gone tomorrow. Especially if we’re going to those startups Dave Mitchell was talking about. Remember that creed that IT managers have been living by for decades now — whether its applications, data, or coffemakers — always, always, have a backup.

Posted by joemckendrick in Software as a Service | Digg This | Add to del.icio.us