SaaS Realities

Old notion: SaaS is more hype than help, with hidden costs and security worries. New order: Buying IT services as you go keeps pace with changing budgets and business demands.

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Raybon: "There are two ways to handle security. First, have strong contracts that hold people accountable should something happen. Second, we put information about processes in the cloud, but we keep all our proprietary corporate data back in our system of record. I keep track of sales opportunities in [Oracle CRM] On Demand, but once it turns into an order with credit information, that stays inside."

Is loss of IT control a concern?

Harding: "It's kind of a double-edged sword. Yeah, it's not my baby anymore, but I also don't have to worry about it. The only downside has been when they roll out upgrades. We do have the ability to test, and we do test, but sometimes the upgrade breaks things. So when we see an upgrade coming, we just plan on having some problems for the next week."

Raybon: "I think I have more control. We can sit down with someone who doesn't have to write code -- business users -- and we can rapidly prototype. We can bring things up without the need for technical resources."

Flax: "You do lose some control. In return, you get some benefits." The loss of control suggests that commodity applications go to SaaS while those conferring competitive advantage stay in-house, he says.

Wakeman: "You can put whatever you want into a contract, and we do -- that we own the data, they have to give it to us, etc. But you know, they could still lose it, or they could be lying about how they back up data. It's impossible for us, with the number of these things we use, to go and inspect all those places."

Harris: "You absolutely need to negotiate the service. You need commitments -- with economic rewards and penalties -- to availability, to transaction-response times for one or two key transaction types, and to the response time to situations where the system is down and there are no work-arounds."

Do you worry about vendor lock-in?

Chiazza: "There are things you can do. We do weekly downloads of the entire database. A few years ago, I would have felt a little bit locked in, because Salesforce.com was really the only one doing this. But other companies are catching up. Today, we could easily take our data and move it over [to another vendor]."

Wakeman: "That's definitely a concern. We have that issue with internal applications, but with external, it's a little more difficult if you are locked into a vendor that gets acquired or goes out of business. With internal, you can keep running it for some time while you figure out an exit strategy. But with external, you may have to make a rapid switch, and the switching costs could be high."

Raybon: "With an in-house option, you devote a business process to the platform that the vendor supplies. I don't think it's more of an issue with SaaS. Also, we take snapshots of CRM On Demand, and we keep a much more robust data model in-house.

"In the unlikely event that Oracle CRM got dropped, it wouldn't take me long to switch over to a competitor with another Web service."

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