Table of Contents
What Is “Real” SaaS? How a Real SaaS
Solution Can Move Your Business Forward
Executive Summary
Today, thousands of companies worldwide are running business applications and mission-critical corporate systems in the cloud—but are they truly cloud-based? Many vendors sell business applications they claim are cloud-based, but in reality the offering is simply a hosted on-premise software solution—a “fake” cloud.
The Software-as-a-Service (SaaS) market is rapidly gaining momentum. According to Gartner, global spending on SaaS will rise 17.9 percent this year to $14.5 billion. Market growth will remain strong through 2015, with spending on cloud-based software expected to reach $22.1 billion.
In the hopes of tapping into the growing market for cloud services, many software vendors simply modify their applications so they can be accessed online and host the software themselves. However, application hosting is not the same as a “real” SaaS; without a multi-tenant architecture, it cannot deliver on the real promises of cloud computing such as seamless upgrades, lower operating costs, ubiquitous access, and ease-of-use.
With so many software vendors trying to cash in on the cloud, it’s hard to tell who is offering real SaaS and who is merely riding the coattails of cloud offerings with a hosted solution that simulates SaaS but doesn’t deliver all the same benefits. Understanding the differences between true SaaS solutions and the imposters may help you maximize your results. The purpose of this document is to clarify what SaaS is, explore the difference between real and fake SaaS, and what’s important when evaluating SaaS solutions.
What is Real Cloud?
Business software delivery models have evolved tremendously over the last decade, from on-premise implementations (software installed and run on computers at the customer’s physical site) to off-site hosting (data is stored and accessed via a provider’s separate, outside location). Unfortunately, due to the proliferation and incorrect use of the term, SaaS has often been misunderstood by both software vendors and business people.
Let’s start by demystifying “the cloud” and “cloud computing,” which are frequently used in conjunction with SaaS. In the simplest of terms, the cloud refers to the Internet, and cloud computing describes the transition from “everyone buys, installs, and maintains their own software and hardware” to “everyone can access applications on demand through the Internet.”
The term Software-as-a-Service refers more specifically to business software that runs in the cloud, rather than on-premise at a customer site. Sometimes used interchangeably with the terms “on demand” or “cloud,” SaaS applications typically allow customers to license the software and support they want to use without installing or maintaining any software or hardware. In other words, the vendor provides a service that can be subscribed to and accessed over the Internet rather than a physical product that customers have to install and manage on their own.
Real Versus Fake Cloud: What’s the Difference?
In the enterprise software industry’s rush to fulfill demand for SaaS applications, some software providers skip requirements that are critical to delivering the true benefits of cloud applications. Rather, they simply modify their software to mimic real SaaS, which makes it difficult to differentiate real cloud providers and applications from the imposters.
Industry pioneers for cloud applications know shortcuts don’t exist. Real cloud applications, architectures, and processes must be built from the ground up to produce superior, modern alternatives to the traditional onpremise software and maintenance model.
This document outlines 10 critical questions to ask a vendor that will help organizations distinguish the difference between real and fake cloud applications.
Question: 1
Are you built ground-up to be multi-tenant?
If a vendor is selling a multi-tenant SaaS solution as well as an on-premise solution, ask the vendor which approach they think will work better for you. A company selling both approaches will often wind up with a “split personality” because sales into any one model will detrimentally affect the other revenue model. Additionally, if the vendor makes the majority of their money selling on-premise software, it will be very difficult for them to fully commit to the SaaS solution. Be wary, since they will be unable to give you a true, balanced perspective.
According to Forrester and other sources, multitenancy is the key distinguishing feature of true SaaS. And it’s through this multi-tenant architecture that cloud services achieve the high cost efficiencies they’re known for. 1
A multi-tenant SaaS provider’s resources are focused on maintaining a single, current version of the application, rather than spread out in an attempt to support multiple software versions for customers. This ensures that every customer is on the same version of the software, including company-specific configurations and integrations. As a result, no customer is left behind when the software is updated to include new features and innovations. Even better, your time is spent on new functionality that can drive business productivity and innovation, rather than thinking about how to avoid a high-cost upgrade.
Most of the time, when an application is deployed in a single-tenant model, it’s because the core product was not built to support multi-tenancy, and the vendor doesn’t want to take the time to re-architect the product. They end up hosting thousands of single-tenant customer implementations. As the vendor improves its software, it sells and deploys the new versions based on licensing changes. Consequently, customers must either endure outof-date software or pay for company-specific customizations and integrations during upgrades.
Multi-tenancy is the only proven SaaS delivery architecture that eliminates many of the problems created by the traditional software licensing and upgrade model, so it’s extremely valuable to know whether the provider uses a multi-tenant architecture. A provider should be able to answer this question with a simple “yes” or “no,” and prove its answer.
1 John R. Rymer, Understanding Cloud’s Multitenancy, Forrester Blogs, posted on March 20, 2012.
Question: 2
Do you address my specific requirement with configuration or customization?
How a vendor provides support for a company’s specific needs will determine whether a company is going to stay on top of innovation or spend time on costly upgrades in the future.
Customization makes future upgrades costprohibitive due to their complexity and the resource requirements, and can be put off for months or even years. Because customization changes the underlying application, it can even break a customer’s ability to upgrade to a future version. Consequently, customers endure the risk of being isolated on old releases. The burden and cost of recoding, testing, and transitioning customizations from version to version lies with the customer.
Real SaaS vendors allow companies to address their specific needs with configuration rather than costly customization. By supporting configuration, SaaS solutions allow customers to tailor business processes to meet their individual needs, but they do so without compromising the upgrade path.
Truly multi-tenant SaaS solutions are designed to be configurable and therefore easily upgradable, which provides a significant cost-savings factor when comparing SaaS to on-premise or fake SaaS solutions. Configurations are captured separately from the application capabilities, so on-going updates can occur without endangering customer configurations. Configuration capabilities are built into the system and tested regularly, and the SaaS vendor will often guarantee configuration options will work through any and every update.
With an on-premise or fake SaaS approach, customizations and integrations are not guaranteed to work with future upgrades. This will leave companies paying for the “right” to upgrade through ongoing maintenance or subscription fees but unable to take advantage of all the new innovations since all the company specific customizations and integrations have to be re-done, re-tested, and re-implemented with the new upgrade.
Question: 3
Are the upgrades managed seamlessly by the vendor?
Recently, Baker Tilly Virchow Krause LLP, a full service accounting and advisory firm, compared the costs of on-premise software, single-tenant licensing solutions and true SaaS solutions to demonstrate the TCO differential over the course of seven years. The firm discovered that a $300 million automotive manufacturer performing an upgrade to its onpremise ERP software would spend about $13 million. During the evaluation, they found that a true cloud alternative was 46% less than the on-premise solution and 35% less than a hosted solution.
Unlike traditional or hosted software vendors, real SaaS vendors only have to maintain one version of the software and can upgrade all customers at the same time, often several times a year. This allows customers to consume innovation faster as new capabilities are released with each update. Customers are relieved from IT upgrade projects, while the vendor can focus on what it does best, which is maintain its own software.
To realize the true cost benefits of SaaS, the provider should be managing all of those updates at no additional charge, and customers should be able to adopt the latest capabilities in the updates on their own timelines. Software that has to be upgraded on the customer’s own dime, even if the vendor hosts it, does not meet the requirements for a cloud application.
Question: 4
Are integrations seamless and supported through future upgrades?
Any integration point is a failure point. As the vendor improves its software and deploys new versions, integration problems get enhanced—leaving customers with the dilemma of upgrading to get new innovations, or staying the course and not disrupting the existing integration points.
A true cloud application will provide a vendormanaged integration platform and tools that are built ground up to lower the cost, time, and risk of integration with existing on-premise and SaaS applications. Customers can leverage these integration platforms and tools to reduce the amount of manual integration time and work required. Customers can control the execution of integrations without having the complexity of managing the infrastructure. This in turn provides seamless integration that can be supported through future upgrades, and reduces the risk of something going wrong with their integrations.
A true cloud vendor worth doing business with will share the burden of integration with its customers, versus leaving them on their own to build custom integrations that cannot be supported as new upgrades become available.
Question: 5
Are you SSAE-18 compliant and do you have a strong security policy?
A cloud application provider should be able to offer world-class security and data privacy better than its customers can do on their own, and at no additional cost. Processes and policies should encompass physical, network, application, and data-level security, as well as full back-up and disaster recovery. The provider should be compliant with security-oriented laws and auditing programs, including SSAE-16 (previously SAS 70).
In the early days of SaaS, security arose as one of the largest concerns because the SaaS delivery model was still new and companies felt uncomfortable storing sensitive data outside their own firewalls. However, as the SaaS model has gained traction it has proven to be highly stable and secure. Although it is advisable to carefully study the reputations and security policies of your business software vendors, the increasingly wide adoption of SaaS business solutions provides a compelling testimony to SaaS security.
SaaS providers must take a holistic approach to security, ranging from technical safety guards such as encryption to understanding data privacy laws and compliance, and building those safety guards into every product and process. There are four layers of security that SaaS vendors use to secure customer data:
1. Site security: Measures designed to prevent unauthorized personnel from physically accessing a building, facility, resource, or stored information.
2. Network security: Provisions and policies that prevent and monitor unauthorized access, misuse, modification, or denial of a computer network and network-connected resources.
3. Application security: Measures taken throughout an application’s lifecycle to prevent vulnerabilities in the security policy of an application or the underlying system through flaws in the design, development, deployment, upgrade, or maintenance.
4.Database security: Managing and safeguarding the collection, transfer, and storage of data.
When speaking to a potential SaaS vendor about the more technical aspects of security, you should request details around the following topics:
SSAE 18 compliance certification: SSAE 18 compliance is the new Standards for Attestation Engagements (SSAE) No. 18, which replaces SAS 70. SAS 70 is the American Institute of Certified Public Accountants (AICPA) Statement on Accounting Standard (SAS) number 70. It describes the controls a service provider has in place when hosting or processing data belonging to another organization. These controls are defined by the vendor and audited by a third party for compliance.
Disaster recovery: Users should have secure access to their data at any time. Vendors should have processes, policies, and procedures related to preparing for recovery or continuation of businesscritical technology infrastructure after a natural or human-induced disaster.
Service Level Agreement (SLA): A document that describes the vendor’s responsibility to the client, including how data is protected, availability of data, client rights, and vendor responsibilities.
Security Officer: Employee of the vendor organization who ensures that the best practices for security controls are strictly defined and adhered to by the organization at all times.
Question: 6
Do you guarantee availability and publish your uptime online?
When you’re trying to run a business, the last thing you need is for your systems to go down. After all, if you can’t access the data, then it doesn’t matter what features come with the application. Customers should have the right to access their data 24x7x365. Availability and uptime of the cloud application should be guaranteed in the vendor’s Service Level Agreement (SLA).
Cloud vendors that are not “truly cloud” cannot guarantee their service level or publish their uptime status online. You should expect a 99.5% uptime with full transparency at all times, with live status updates and a complete service history to backup any performance claims on the vendor’s website.
The entire business of a true cloud vendor is based on high-performance IT infrastructure and stellar operations. It is their lifeblood—it is how they remain competitive. True SaaS providers offer an infrastructure that is scalable, resilient, redundant, and monitored 24x7x365 to ensure that you get the data you need, when you need it.
When evaluating SaaS solutions, make sure they are backed by an infrastructure with the following features:
Strong history of uptime delivery: History of uptime and downtime for at least the last two years. While a few SaaS vendors publish their uptime and downtime online, most do not. SaaS vendors that can demonstrate a history of solid uptime can be expected to deliver much greater uptime assurance than SaaS vendors with spotty records or who choose not to divulge their downtime history.
Guarantee of Service Levels: True cloud vendors with a strong history of uptime statistics will guarantee their service levels in the License Agreement.
High available data center: A world-class data center that is a global network of fully redundant, scalable, and secure infrastructure monitored 24x7x365 by a global operations team.
Scalable: One of the concerns with SaaS is that the vendor will “hit the ceiling” as they grow and not be able to provide the needed level of availability and performance. A true SaaS vendor should be able to grow systems and infrastructure to meet changing demands and show proof of scalability to many hundreds of thousands of users.
Fast performance: A true cloud application must be fast from a user’s standpoint. SaaS vendors need to deliver consistent, high-speed system performance on a worldwide basis. They should have detailed historical statistics to back up any performance claims.
Full redundancy: The system cannot go down. There must be redundancy in the servers where all the data resides. Only a multi-tenant architecture makes this all possible and, in general, customer data can be backed-up in geographically distinct locations with a fail-over process and disaster recovery plan in place.
Question: 7
Will I know exactly how the system is going to look before deployment, and what is the cost and speed of deployment?
Since cloud applications are easy to use, highly configurable, offer seamless integration tools, and don’t require investments and installation of hardware and software, organizations should be able to get them running and productive in a fraction of the time compared with on-premise or hosted software.
With a true cloud application customers are in control all the time. They can look at the application, very quickly test it with their data, configure it to see how it looks and works, and then deploy it. Configurability allows IT and the business team to align the software to their business needs easily and quickly without customization. Once the business process is configured and training is in place, you simply turn it on. Customers have full visibility into what they are buying and how exactly it is going to work to provide value.
A fake SaaS vendor typically has not re-architected the software to provide the full benefits of SaaS. The vendor is usually in control, providing limited ways to test the software with your data. Customers usually don’t have the visibility into exactly how all the customizations are going to look and work. IT is bogged down with coding, and business users have no way of looking at the system and providing input until it is too late or costly to make changes. This leads to a compromised implementation with time delays, budget overruns, and frustration on the customer side, while the vendor takes no responsibility.
Deployment is not just once; it needs to be handled every upgrade cycle. A true SaaS provider understands that and should provide a “sandbox” version of the production environment, so an organization’s project team can view and analyze data and experiment with features and configurations before going into production. IT and business managers need to have a place where they can go in and play with the functionality without any risk to the production environment.
A truly multi-tenant cloud application is built to provide customers with complete access and visibility into the system they are going to deploy for the first time or upgrade to. This provides for a far superior deployment that is hassle free, cost effective, fast, and can’t be matched by on-premise or fake SaaS vendors. Customers are able to focus on getting value out of the system rather than worrying about operating the software.
Question: 8
How often do we get innovations in terms of vendor-managed upgrades?
Upgrades can be cost-prohibitive for companies due to their complexity and the resource requirements, and can be put off for months or even years. As a vendor releases new upgrades, customers are left with older versions and no way to reap the benefits of the new innovations, even though they are still paying ongoing maintenance or subscription fees. Your investment starts depreciating in value over time and it takes immense effort and cost to upgrade and start utilizing new functionality again.
A true SaaS delivery model is the only proven way to solve the upgrade-related concerns around traditional enterprise software. A multi-tenant SaaS provider has invested in architecture that allows all the customers (multiple tenants) to run on a single, current version of the software, so resources are focused on delivering innovation to customers rather than maintaining many versions of the software. Combined with flexible configuration and integration tools, costly customizations are eliminated and the customer can upgrade quickly to an extensively tested solution with just acceptance testing. In this model, vendors can manage all the upgrades, and provide a hassle-free upgrade experience to customers at no additional cost.
If a provider isn’t fully committed to using multitenant SaaS, it may be hosting thousands of singletenant customer implementations. Additionally, if the vendor supports on-premise and hosted models, their resources are going to be spread thin supporting multiple versions, rather than driving innovation. Trying to maintain that is too costly for the vendor, and those costs become the customers’ costs. Even if the vendor supports multi-tenancy, their SaaS customers may have to wait several years for a new version if the hosted solution is constrained by the release schedule of the vendor’s on-premise product. Therefore, customers choosing a vendor who is not committed to SaaS will face the same challenges of a traditional software delivery model with costly upgrades every four to five years.
A true cloud provider typically should provide updates (minor releases) every week, and upgrades (major feature releases) once every few months. Vendor-managed updates deliver continuous improvement and allow companies to stay current with all the innovations. Your time is spent on new functionality that can drive business productivity and innovation, rather than thinking about how to avoid a high-cost upgrade.
Question: 9
Is the Total Cost of Ownership (TCO) of this software predictable year over year; are there any hidden costs?
Your total cost of ownership is comprised of much more than just the one time sticker price of the software. SaaS solutions are considered so attractive in part because of the potential cost benefits they can provide year over year. Valid cloud applications should provide a predictable subscription-fee that is generally “pay-as-you-go.” There should be no hidden fees for upgrading customizations and integrations in the future. Upfront or ongoing investments in hardware and software license fees should not be required. The “pay-as-you-go” model with no other ongoing fees lets the vendor earn your trust; you should be able to un-subscribe from the service at any time if you are not happy.
A true multi-tenant SaaS provider’s resources are focused on maintaining a single, current version of the application, rather than spread out in an attempt to support multiple software versions for customers. If a provider isn’t using multi-tenancy, it may be hosting thousands of single-tenant customer implementations. Trying to maintain that is too costly for the vendor, and those costs become the customers’ costs.
Real SaaS is a lot more than just hosting. True multitenancy enables the vendor to provide seamless upgrades without breaking customer-specific configuration and integration, which means that the cost of owning the software is predictable in the long run. You will no longer deal with highly unpredictable projects—the most common being customization and software upgrades.
When evaluating a SaaS vendor be sure to consider the following costs on a multi-year basis:
Additional charges to apply upgrades in the future on top of subscription fees
Implementation/installation fees, including consulting fees
Cost of creating and maintaining integrations between systems through upgrades
Support staff and IT resources to maintain systems and integrations
Hardware and software licensing cost
Security, backup, and disaster recovery provisions and cost
Time and expense to test the solution
Training and change management costs for users
Costs of adding additional systems and infrastructure to scale
Multi-tenancy lets true SaaS providers deliver a high-performance IT infrastructure and seamless vendor-managed upgrades at a predictable cost over multiple years.
Question: 10
How quickly can I expect ROI on my investment?
Most multi-tenant SaaS applications are built for fast implementation and deployment, ease-of-use, and seamless upgrades at a predictable cost. This frees up customers from worrying about the nuts-and-bolts of software maintenance and resource intensive upgrades and lets them focus on obtaining strategic value from the software. Hence, customers are able to see tangible business value faster than they would in an on-premise or fake SaaS delivery model.
There are several ways SaaS can contribute favorably to the bottom line:
Economies of Scale: A true multi-tenant cloud system enables multiple customers to share one infrastructure in a highly secure environment. The collective investment of all the customers ensures that everyone shares a world-class global data center that is fully redundant, scalable, and secure, and is monitored 24x7x365 for high availability. Customers don’t have to invest in building the entire infrastructure and operations on their own. The cost distribution also allows SaaS vendors to charge customers a lower rate, returning the cost savings back to the customers. Such sharing of cost is not possible in a fake SaaS model since each customer has to be managed separately, thus increasing the cost of the infrastructure to be managed with each additional customer.
Fast Time to Value with Happier Users: True cloud solutions are built for fast implementation and deployment. Since there is no software or hardware to install, customers can focus on aligning the software with their business objectives. An advantage of configuration over customization is that functional users can often configure the system themselves (with a little training) rather than requiring technical IT support. Cloud applications leverage modern technology and provide a more intuitive end-user experience, often with support for mobility. These combined benefits result in faster time to see business value from the SaaS investment.
Focus on Tangible Business Value: A cloud application vendor should focus on what it does best, which is to maintain and upgrade its own software. Customers are relieved from time and energy spent on non-strategic tasks of software maintenance and operations. And that frees them up to do what they do best, which is to focus on strategic work and innovations and find ways to enhance business value.
Higher Quality of Service with Transparency: The entire business of a true cloud vendor relies on managing a world-class data center and operations to provide continuous availability to its customers. Unlike a fake cloud vendor with multiple streams of revenue from customers on different delivery models, a true cloud vendor cannot survive by providing unreliable service that causes disruption to a customer’s business. Hence, a true cloud vendor needs to invest heavily in building and maintaining a top-tier infrastructure for its customers. Often the service levels around availability and performance are guaranteed in the license agreement and history of statistics published on the vendor’s web site.
Predictable Operational Cost: SaaS vendors provide their services and enterprise-class software for a low monthly subscription fee, which is generally pay-asyou-go and requires no upfront investment. Typical annual hardware or software upgrade investments, on the other hand, are usually funded with new capital investments (CapEx), but this technology becomes outdated quickly and your investments start depreciating in value. It can become quite expensive when you get stuck in a spiral of throwing CapEx at a never-ending upgrade cycle. With SaaS, however, costly customizations are eliminated and upgrades are handled continuously and seamlessly by the vendor, not the customer, usually at no additional cost. Companies can then also account for these costs differently by opting to fund them from operating expenses (OpEx), which has the advantage of keeping financial statements and balance sheets lean.
Faster Innovation: With a real SaaS vendor, customers get updates every week and new capabilities are rolled out on a periodic basis, typically every few months. A multi-tenant, configurable SaaS vendor can test system stability for all the tenants (customers) very easily since the architecture is built to support it. This enables customers to do acceptance testing fast and consume innovations on their timeline, unlike traditional or fake SaaS where it takes months or years to upgrade at additional cost. This means that over time the value of your investment doesn’t depreciate—it actually increases! Continuous innovation within the SaaS solution results in substantial incremental capabilities and functionality throughout the contract period at no additional charge to the customer.
There are significant savings and great value SaaS customers receive, both tangible and intangible. Comparing just the superficial costs of real SaaS and fake SaaS solutions may not give you the full picture on what is going to cost less and provide better ROI. Purchasing decisions affect your team and your company’s value in the long run, therefore comparing all aspects of software’s impact is essential. Business leaders are adopting SaaS faster than ever before to better align technology with business objectives, so be sure to understand the true costs and benefits your company could leverage by using a SaaS solution.
Replicon’s “True SaaS” Difference
Successful business executives are demanding true SaaS applications since they provide numerous financial, strategic, and computing benefits. Although many vendors deliver SaaS solutions, only true SaaS solutions can provide significant savings and business value.
Replicon’s solutions are built ground-up to be multi-tenant SaaS—making it the market leader in SaaS-based time and expense management software with over 1.5 million users in 80+ countries. Replicon’s portfolio of fullyintegrated products provide a complete solution for any time tracking need, including billing for professional services, chargebacks for shared services, tax credits, capitalization of labor projects, project costing, time & attendance, time off and more.
Replicon’s cloud solutions can be accessed on the web or any mobile device, giving users global anytime/ anywhere access, and executives in-context real-time analysis of their business.
A “Real SaaS” provider, Replicon helps its customers experience all of the benefits of the SaaS model:
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Multi-tenant architecture. Replicon’s solutions are built completely on a multi-tenant architecture, just like the other leading applications on the web are, such as Google, Amazon, and eBay.
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Upgrades managed by Replicon at no extra cost. Updates (minor releases) are provided every week and upgrades every few months. Since Replicon’s solutions are completely multi-tenant, all updates and upgrades are managed by Replicon. Customers don’t have to pay extra to apply the upgrades.
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Flexible configuration over costly customization. Replicon’s solutions are architected to be completely configurable so the solutions can be tailored to meet the specific needs of a customer. All configurations are tested and supported in future upgrades. This way customers are not burdened with recoding and retesting customizations during upgrades.
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Seamless Integration. Replicon provides seamless integration with other on-premise and SaaS applications. To ease the burden of integration, Replicon has built, and is continuing to build, integration tools to help customers integrate with their existing applications.
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Security at every level. Security of our customers’ data is our number one priority. Replicon’s security processes and policies encompass physical, network, application, and data-level security, as well as full back-up and disaster recovery. Many companies have thoroughly examined Replicon’s security provisions and found them to meet or exceed their requirements, even in regulated industries such as financial services and healthcare.
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Cost-effective subscription model. Replicon’s solutions require no upfront investment. A low monthly subscription fee gives you full access to enterprise-class software with automatic upgrades and no service interruption.
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Seamless upgrades. Replicon deploys upgrades seamlessly and frequently, with no service disruption to you, so you always have the latest software features and functionality, and can benefit from our continuous innovation.
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Seamless integration. Replicon’s solutions allow you to get started with our software quickly. They integrate easily with virtually any of your legacy systems out-of-the-box, and you can also integrate them with proprietary systems using the RepliConnect web services API, with minimal effort.
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Security and compliance. Replicon conducts annual SSAE 16 audits. Our fully-redundant cloud architecture, enterprise firewall technology, SSL encryption, and permission-based authentication further enhance the security of your data. Because of our global infrastructure, we’re also able to store data where you want, to address geographic compliance issues.
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Robust infrastructure. The Replicon cloud is hosted in world-class Tier 4 data centers in multiple locations. Our global network is fully redundant, scalable, and monitored 24x7x365 by our Global Operations team. We have a facility solely dedicated to global disaster recovery. Our unique architecture has redundancy built into every level, and we use powerful loadbalancing and clustering technology. We also use Akamai’s content distribution software to further enhance system performance. As a result, Replicon customers experience 99.5% uptime—the highest in the industry.
Conclusion
According to IDC, public cloud services will reach nearly $100 billion by 2016, and SaaS will claim the largest share over the next five years.2 Clearly, adopting SaaS solutions will be critical to remaining competitive, so it’s essential to know what type of solution you’re buying before you make the transition.
Whereas traditional hosted solutions—or fake SaaS—can be slightly more cost-efficient than legacy onpremise software, in the long run, paying for and managing the required licenses can lead to long and expensive upgrade cycles and a lack of scalability. To reap the full benefits of cloud, a real SaaS solution that features multi-tenancy, seamless upgrades, and configuration is preferable. Only with real SaaS can you benefit from the productivity gains, scalability, and cost savings that a vendor-managed subscription-based model can provide.
2 “Public, Private Cloud Markets Set to Soar as Enterprise Adoption Grows,” By Darryl K. Taft, Posted 2012-09-11 at https://www.eweek.com/cloud/public-private-cloud-markets-set-to-soar-as-enterprise-adoption-grows
