SETTING THE ENTERPRISE FREE

SaaS has its skeptics, but experienced users praise this new approach to software delivery for lowering their IT costs and providing far more flexibility with global software rollouts.

By Mary Hayes Weier

Despite the growing popularity of SaaS, some organizations have their doubts. They think it’s risky, or that it can’t be customized. And those claims about cost savings sound like a lot of hype. But how do such skepticisms stack up against real-world experiences?

For the skeptics—or simply the cautious—the best sources of the truth about software-as-a-service are organizations that lived through a major implementation and have used it daily for months, if not years. These pioneers committed important business operations to SaaS back when it was still considered a fringe approach to application delivery.

We sought out experienced users of SaaS-based human resources and customer-relationship management systems, and their responses firmly discredit the most common skepticisms about SaaS. These products cost them less to purchase and support, provide more flexibility than comparable on-premises apps, and in some instances, trump on-premises apps on functionality, say the users. Most tellingly, they’re expanding their use of SaaS.

Brian Sommer, CEO of market strategy firm TechVentive Inc., writes of similar findings in a newly published report. Large companies say they’re cutting application costs by at least 50% with SaaS, according to Sommer, who adds that “customers who moved to SaaS are more inclined to do it again.”

But there’ve been some tough lessons, too. SaaS applications can’t be islands unto themselves. Data often travels between SaaS apps hosted by the provider and on-premises legacy apps, and integrating SaaS won’t necessarily be any easier than the old way. Experienced users add that time and attention is needed to test and trouble-shoot the performance of data transfers between systems.