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Whether you call it Software as a Service (SaaS), Managed Service Provider (MSP) or On-Demand Services, your organization uses the service running “in the cloud”. This blog will discuss these services, their benefits, drawbacks and operations. Are we biased? Yes. We believe that some services make sense for most organizations. Email security is one of those. However as Mark Twain said, “All generalizations are false, even this one.” Each Tuesday we will post information and questions about Software as a Service. Occasionally, we will have a "Guest Post" from either a consultant or vendor posting her/his thoughts on Managed Services generally as well as some degree of specificity based on her/his unique perspective. We encourage your insights, comments and feedback. Welcome.


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SaaS – Pros & Cons (Part 1 of 2)

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Software-as-a-service (SaaS) is one of the fastest growing segments of the IT industry. This is due in no small part to the fact that it provides a more cost-effective alternative for enterprises to achieve their business objectives than traditional packaged applications. There’s been increasing attention on how companies are saving money by taking the SaaS route. It’s been touted as a cheaper, simpler, and more flexible approach with easy deployment and trouble-free upgrades. SaaS detractors claim that SaaS doesn’t spell the end of packaged applications or customized solutions as these are both necessary components of delivering tools.

So what are the pros of SaaS? What drives organizations when it comes to SaaS? Every company should carefully evaluate a would-be provider’s resources against their comprehensive list of requirements, goals, and objectives. But what are some general considerations that can be applied to SaaS? Let’s take a look at some of the arguments for SaaS adoption.

The Pros

  • Cost: the inherent economy of scale found in SaaS gives SaaS providers the ability to deliver services very cost-effectively.
  • Risk mitigation: in theory, SaaS providers assume the risks of developing, maintaining, and delivering an application.
  • Accessibility: as long as one has access to a web browser and an Internet connection, users in different states, countries or even continents can access the same information in real time without the delay of synchronizing off-network changes. This is a key advantage of SaaS.
  • Frequent upgrades: updates are made frequently and, for the customer, effortlessly. Because the software is delivered over the Internet, hosted providers have greater flexibility in upgrading the applications and rolling out changes to customers. Traditional software vendors, by contrast, might upgrade software once a year, if that, but the customers bear the burden of reconfiguring it and paying for the newer version. Using the hosted model means customers can do more to shape the application.
  • Lower total cost of ownership (TCO): traditional software, regardless of business size, can cost thousands to tens of thousands of dollars in implementation fees, hardware, maintenance, services, and support. SaaS gives companies the opportunity to enjoy a “zero touch” software application – this means zero maintenance, end user support, and administration costs. Add to this comparatively low implementation and customization costs, SaaS offers a much better TCO than on-premises offerings.
  • Flexible contracts: when compared to outsourcing, this is one of the biggest advantages of SaaS. Many SaaS providers offer short-term and, in some cases, month-to-month contracts. This is the ultimate “try-before-you-buy” flexibility that can help businesses make a strategic decision with little or no liability.
  • Predictability: while this may not be a pro that some businesses realize at the onset, cost, service levels, and staffing requirements all become more predictable.
  • Scalability: SaaS offerings are easily able to develop with the growth of a company, maintaining performance levels and uptime.
  • Business-focused IT services: While traditional IT organizations have been responsible for delivering technology, today’s businesses look to IT for thought leadership and business-enablement as well. Offloading aspects of technology delivery can free up IT executives and technicians alike to pursue high-impact projects that add value to the business.

Simply put, SaaS can save a company the headaches of ongoing maintenance, time and money in IT support and equipment costs. Additionally, the key factors that can influence and organizations choice of adopting a SaaS solution are scalability, accessibility, flexibility, and dependability, as well as massive advantage of speed to market.

But what are the risks? Is software platform dependency one? What about additional costs due to lengthy deployment? Or are there potential operational risks? Might there be time difficulties for extensive customization?


What do you think? Did we miss a “Pro” What are the benefits? What are the drawbacks? What’s your experience with SaaS?

Next Post: In our next installment we’ll take a look at the arguments against, so you can stack the pros and cons head-to-head.


Posted on : May 15 2008
Tags: , , , ,
Posted under Managed Services, SaaS |


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