Saas as a Strategy

With all the bells and whistles from SaaS providers, should we adopt SaaS as a Strategy for our software application needs?

In my previous blog, I pointed out the difference between ASP and SaaS. However, it would help to step back a little and give some background. SaaS is a delivery model in which a commercial software vendor builds the software application, host it at an environment that it comfortable with and expose its services to its customers through web-based interfaces. The interface could be browser based or through web-services.

SaaS is one of the three types of cloud computing services available in the market today. Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS) being the others.

Examples of SaaS include CRM and Google Apps. gives a list of SaaS providers.

Unlike Application Service Provider (ASP)s, SaaS accommodates multiple tenants. The exposed services are common to all its users and is centrally managed, maintained and supported by the provider. Since the service is exposed through the web, it can be utilized by anyone across the globe. Once a user signs up with the provider, all services are available immediately and there is no wait for customization. An amateur user goes through the same training and orientation as an advanced user since the exposed service is the common to all type of users. The user is charged on a as-use basis instead of a fixed monthly charge.

Since the solution is centrally managed, the service level agreements (SLA) would be common to all and may not be flexible at all. Except for the data or information of the user, everything else belongs to the provider. So is the performance of the application too. User data or information is at a location of provider’s discretion and at their mercy. Since the software is built for SaaS model on the web, it may not be available to purchase from a retailer. This prevents the user to independently try out the software or host the software application elsewhere.

Since the software application is completely accessed over the web, it is also exposed to the threats that any other service on the web is exposed. Malicious code attacks and denial of service attacks are some to name.

User need to be concerned about the confidentiality and integrity of data or information that is passed on to the provider. This includes intellectual and confidential information. Sometimes part of the provider operation may be outsourced to another provider that the user may not be aware of. The provider need to ensure that user data or information should neither be accessed by unauthorized personnel nor by other users of the service.

User need to ensure that the data or information that they pass on to the provider is hosted in a compliant jurisdiction. Data originating from certain countries like China cannot be hosted in another country due to legal restrictions. Certain types of data, for example Personal Identifiable Information (PII), are subject to local regulations which prevent it to be hosted in another country. A good example is Canadian Privacy Regulation (PIPEDA). There are others subject to regulations such as HIPAA and GLBA.

User should ensure that there are proper security controls in place at the provider that is compliant with security policies and standards of the user. User should be given the right to audit and monitor the provider periodically.

There should be proper understanding of reporting any issues and their ownership of issues in case of a security incident. User should also consider what happens if the contract with the provider is terminated. Providers may not be able to give back the data in the same model that is expected by the user.

Before signing up with a provider, user may need to verify how resilient the provider is, their security posture, customer support, track record and reputation.

So can we sign up for SaaS? It all depends on the classification and business criticality of data or information that will be passed on to the SaaS provider. If we are subject to laws and regulations that prevent data leaving from our perimeter, then SaaS is not a solution. However, there are other types of information that can very well be managed by a SaaS provider and should be passed on to them so that we can reduce our operational cost.

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