Businesses Get Serious About Software As A Service

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Integration challenges are likely the reason that among those using or planning to use SaaS, 29% consider themselves still in a test phase and 58% are limiting the number of apps they deploy--only 13% cite wide deployment across many applications.

But Shaklee's Harris doesn't think integration and security are the biggest problems. Integration is becoming a nonissue as more vendors support a service-oriented approach, he says, and security is more of a perceived than a tangible issue: Nontechnical executives worry that sensitive data is more at risk if it resides on another company's system, even though the good SaaS vendors typically have solid approaches to data protection.

Get Granular
The bigger issue, Harris says, is making sure a company has the service-level agreements in place with their SaaS vendors to ensure transaction response times, system availability, failover for disaster recovery, and response time to problems. Forty percent of respondents not planning to use SaaS have concerns about uptime and reliability. Businesses planning to use SaaS should negotiate such contracts to a granular level. If they agree to 99.8% system availability, the vendor gets a bonus if it goes above that level, but the business pays less if the vendor falls even a tenth of a percentage point below it.

That's the biggest responsibility of the SaaS vendor, Harris says. "Not everyone who hangs their shingle out as an SaaS vendor gets it," he says.

As early adopters are showing, SaaS is no longer a niche approach to software delivery. Security, reliability, and integration remain concerns, but not enough to outweigh the implementation and cost benefits for many. The true test will be whether companies can use SaaS effectively for business-critical applications.