To SaaS or not to SaaS?

With traditional users of enterprise IT frequently turning to the opportunistic applications running in a Software as a Service (SaaS) model, IT management teams are confronted with the need to balance quick results with long term supportability.While implementing a cloud based application to solve a point problem is very cost effective in short term, businesses often overlook the long term cost. A SaaS application may be a good fit for certain business needs at a certain point in time. However, keeping few points in mind early in the evaluation process will ensure that the long term "total cost of Ownership" (TCO) does not outweigh the quick benefits (and customers do not end up "paying the piper" later).

1) Value and quality of data relative to the company business model (core IP, competitive advantage)
2) Financial stability of the vendor
3) Ecosystem/customer base of the SaaS provider
4) Data protection, data ownership and data privacy contracts
5) Cost/barriers to exit from the vendor
6) Support for technology standards to build data interfaces - Single Sign-on, SOA Web Services
7) Security certifications (esp to protect against hackers)
8) Historic up-time and application availability, Disaster readiness and disaster recovery time
9) Extensibility - cost of customizations to meet company needs
10) Customer Support responsiveness and bench strength of their Professional Services
11) Data model and integration architecture readiness with your internal system.
12) Subscription price increase caps (year over year)

Each company may have additional evaluation criteria specific to their industry and customer base.

Raising awareness of these considerations among the buyers of SaaS services will maximize the value they derive from the SaaS vendors. Enlisting the support of departments such as contracts, legal and purchasing can help enforce the checklist, and ensure formal decision making process is followed when bringing new SaaS providers.

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