{"id":365,"date":"2007-08-24T07:00:29","date_gmt":"2007-08-24T15:00:29","guid":{"rendered":"http:\/\/www.formtek.com\/blog\/?p=365"},"modified":"2007-08-24T07:00:29","modified_gmt":"2007-08-24T15:00:29","slug":"saas-big-benefits-and-maybe-big-risks","status":"publish","type":"post","link":"https:\/\/formtek.com\/blog\/saas-big-benefits-and-maybe-big-risks\/","title":{"rendered":"SaaS: Big Benefits and Maybe Big Risks"},"content":{"rendered":"

The Software-as-a-Service (SaaS) model offers enterprises big opportunities, but there are still enough unknowns and risks that many continue just to kick the tires. On the upside, compared to the traditional model of software acquisition, SaaS software offers big financial pluses.<\/p>\n

The upfront investment of SaaS is significantly less compared to traditional software, and once you’re up and running, significantly fewer IT resources are needed to maintain it. There is also often the added benefit of having the application managed by a team with deep insight into both the application workings and best practices for the technology.<\/p>\n

The downside is that traditional software vendors have had a very shallow presence in the world of SaaS. That means having to deal with a vendor that’s a startup or has a very short track record. And the cost and risk involved in moving from an existing application, despite the high costs of the traditionally licensed platform, will give businesses a reason to think twice.<\/p>\n

So there are risks. But SaaS is gaining acceptance and the perception of those risks are diminishing.<\/p>\n

Traditional software vendors can’t avoid the SaaS momentum much longer. Microsoft, Oracle and SAP are all dabbling in SaaS, and it is likely that these heavyweights will need to fully embrace the technology soon, or risk losing their relevance. It is also likely that big vendors will ultimately have a portfolio of options that will include both service-based and traditional licenses, and customers can tune into the blend that makes most sense for them.<\/p>\n

SaaS services might also provide IT shops with more granularity in their selection of which activities to outsource, keeping in-house those that are considered more strategic or in which good in-house talent already exists, while outsourcing other activities that IT may have a difficult time to cover.<\/p>\n

And as SaaS looks less risky, CIOs are giving SaaS more consideration. McKinsey found that the number of CIOs considering adoption of SaaS has jumped from 38 percent in 2006 to 61 percent this year.<\/p>\n

For SaaS, it seems to be only a matter of time.<\/p>\n

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The Software-as-a-Service (SaaS) model offers enterprises big opportunities, but there are still enough unknowns and risks that many continue just to kick the tires. On the upside, compared to the traditional model of software acquisition, SaaS software offers big financial…<\/span><\/p>\n

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