Cloud computing – Pros and Cons of Software as a Service (SaaS)

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Pros

The use of software solutions as a service (SaaS) allows for better control of technical specifications. Outsourcing of all the technical solutions keeps costs fixed, usually based on the number of people using the SaaS solution.

The price per user includes the cost of software licenses, maintenance and infrastructure. A company can choose between using Saas on one hand, and acquisition of licenses and in-house deployment, on the other hand.

The benefits of SaaS include financial impact. The total cost of acquisition and maintenance of the solution (TCO, total cost of ownership) are usually spent in capital (CAPEX, excluding maintenance).

A clear advantage for businesses is the speed of deployment. SaaS solutions are already pre-existing, deployment time is extremely low.

Another advantage would be to reduce power consumption by allowing the pooling of resources shared by several companies as well as the use of a low power computer with a Web browser without other licenses associated with servers.

Cons

During the implementation of SaaS solutions, data on the client company is generally stored on the servers of the service provider. When it comes to sensitive or confidential data, the company is obliged to make contractual arrangements with the supplier.

The relocation of SaaS solution servers allows mobile access to corporate data. This access leads to a concern for privacy of information when staff departs.

It is also important to adapt the Business Continuity Plan for integrating SaaS solutions as well as provide various scenarios in case of problems with the provider of the SaaS solution.

IT migration can be complicated due to the  switch of data platform provider to another, with various associated problems (compatibility). Under SaaS, the customer is bound to his supplier.

The same service requires the operation of two computers (client / service) instead of one. This can increase power consumption, especially when a client-intensive and non-shared server machine is used.

There is also a third player, the internet service provider (ISP), because it provides the communication between the client and the service provider.

So any  offline interruptions are equal to the total shutdown of the activity of the company, hence the need to provide redundant lines with a fixed minimum rate provided by the network provider.

Types of providers

There are typically four types of enterprise ASP:

The specialist or functional ASP: provides a single application, such as the payment process by credit card;
The vertical ASP provides a solution as a package for a specific type of customers
The ASP business: provides a full spectrum of solutions;
Local ASP provides services to SMEs in a limited geographical area.

Examples of suppliers

The leading provider of SaaS solutions were startups of the internet, “young” innovative companies like Yahoo & Google (Webmail) or Amazon B2C.

Companies like Salesforce (CRM on demand) and Google (Google Apps) have adapted this type of offer professional B2B world. For a number of them based on the offer of Amazon EC2 Cloud Computing.

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