6 Myths About SaaS

6 Myths about Saas

Scared of SaaS? Here are some common myths that on-premise solution vendors would like you to believe.

SaaS is gaining momentum among companies looking to deploy enterprise-class software quickly and inexpensively, and avoid the daunting capital and operating expenses associated with on-premise solutions. It’s no wonder vendors who only offer off-the-shelf software are scrambling to dissuade customers from SaaS alternatives.

There are many, many myths circulating about why SaaS is scary—most of which are being ubiquitously debunked. Here are six of the most misleading ones:

Myth #1: SaaS applications are not secure.

Not true! Security in cloud services can be constructed, maintained and operated at levels that are far beyond what’s cost-effective for almost any individual company or organization. In cloud-based architectures, multi-tenancy means that customers, organizations, and consumers are sharing infrastructure and databases in order to take advantage of price and performance advantages that come with economies of scale. Tenants may share hardware on which their virtual machines or servers run. Hence, security measures are “a must” to ensure that tenants do not pose a risk to one another in terms of data loss, misuse, or privacy violation.

Today’s leading SaaS providers offer application and physical security, network protection and disaster recovery features, as well as SSAE 16 compliance*. Additionally, multi-tenant solutions are designed to satisfy the security requirements of their most demanding users. Because all tenants access the same solution, those strict security features extend to every tenant. Finally, a SaaS-delivered solution will always receive the latest security updates automatically, since SaaS services include automatic updates at no extra cost.

Myth #2: Enterprise apps are more feature-rich if installed on-premise.

Not necessarily. Cloud applications are designed with the web and the needs of the user base in mind, and are constantly updated in real time based on feedback from hundreds of companies, not only yours. As a result, you have access to new capabilities all the time; the SaaS solution leaves your installed software in a cloud of dust. And, because SaaS must meet the needs of a varied customer base, they tend to be extremely configurable to allow a high degree of customization without rewriting source code—a process that can send costs through the roof and delay time to deployment.

Myth #3: With SaaS, you lose control of your data.

SaaS contracts state explicitly that the customer owns all of the data, and SaaS vendors have a process to export the data and let customers take it with them should they decide to terminate an agreement. Most solutions provide flexible reporting and web service integrations that allow customers to get access to the data virtually any way they wish. And because it’s stored in the cloud, your data is ALWAYs available, wherever you are, whenever you need it, with a browser and Internet connection.

Myth #4: SaaS applications are not reliable.

On the contrary, they are usually more reliable than on-premise solutions. Leading SaaS providers typically offer 99.5% uptime for the services they deliver. You are much more likely to experience downtime if your on-premise software crashes, contracts a virus, or needs an update. Although rare and brief service interruptions experienced by big cloud providers like Google Apps or Salesforce,com are widely publicized, enterprise outages last much longer, cost the enterprise more money, and drain IT resources as they try to get systems back up and running. True cloud infrastructures are monitored 24×7 and feature redundancies at every level, as well as load-balancing and clustering.

Myth #5: SaaS isn’t as cost-effective as you think.

It actually is. Most of the gains can be hard to quantify, because they revolve around increased employee productivity and reduced IT and administrative burden. With installed software, in addition to fees for the initial licensing, you are burdened with paying for upgrades, support, staff training and troubleshooting. For larger deployments, you have to house and maintain the servers on which they run. Plus, since you don’t have to invest a lump sum up front, that money stays in circulation and can be used to generate more revenue.

Myth #6: Saas is only for small businesses, not the enterprise.

Wrong again. Although it’s true that SMBs benefit from the low TCO of SaaS solutions, there’s been a steady growth in enterprise adoption of SaaS for the very same reason. According to Gartner, by 2016 the majority of SaaS revenue will come from Enterprise customers: 65% from Web conferencing software, teaming platforms and social software suites; 48% from CRM solutions; and 32% from project and portfolio management software. And perceived lower TCO continues to be the dominant reason enterprises are considering SaaS adoption, with 50% of respondents in 2012 noting this as the primary factor in their decision.**

* Statement on Standards for Attestation Engagement (SSAE) no.16, known simply as SSAE 16, replaces the longstanding SAS 70 audit standard for reporting periods ending on or after June 15, 2011.

** Market Trends: SaaS’s Varied Levels of Cannibalization to On-Premises Applications Published: 29 October 2012 written by Chad Eschinger, Joanne M. Correia, Yanna Dharmasthira, Tom Eid, Chris Pang, Dan Sommer, Hai Hong Swinehart and Laurie F. Wurster

Armando Ortega
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