Software-as-a- Service (SaaS) has become a booming market and IDC research reveals that it will exceed $112.8 billion by 2019. Cloud computing certainly does offer a host of benefits to companies. However, you need to be aware of its drawbacks too. This article summarizes the main pros and cons of cloud-based software to help you gain the maximum efficiency from this technology while still being aware of what aspects you should look out for.

Main Advantages of SaaS Software

Accessibility

All you need is an internet-connected device to access any cloud software and do your work online. Top cloud providers will also offer mobile apps to ensure your employees can be productive even on the go. As confirmed by many users’ financesonline.com software reviews, this anytime, anywhere access approach is one of the main reasons for the growing popularity of SaaS software.

Cost Savings

You can save significant amount of money by subscribing to a SaaS package compared to investing in an on-premise solution which involves heavy upfront costs for installation, maintenance, and upgrades of the IT infrastructure. On-premise software also needs administration, air conditioning, and power expenses. Businesses of all sizes look to minimize operational expenses and a SaaS system can fit in their plans admirably. With SaaS software, you simply pay for you what you need and use, and you can eschew all the unnecessary “bells and whistles” that you are not likely to utilize. Do not think that cloud computing is only for large enterprises. SaaS software packages are very affordable even for smaller companies. But make sure you read the terms and conditions of the contract thoroughly to avoid getting hit by hidden costs.

Reliability

SaaS software is definitely more consistent and reliable compared to an on-premise solution. Top vendors offer 99.99% uptime which means you can access the system any time of the day or night with no interruption in service. You can thus save your IT resources for other important tasks. Plus, there is the added benefit of backup servers in case of server failure.

Resilience

Your data is securely stored in the cloud vendor’s data center. So, you need not worry even if your company office is struck by an emergency or unforeseen disaster. You can simply shift your employees to another location that has internet-connected devices to ensure there is minimum loss of productivity.

Easy Manageability

As mentioned earlier, the SaaS vendor administers, manages, and maintains the software and infrastructure. You don’t have to worry about updates and upgrades as these are done automatically by the cloud provider. Thus, you can enjoy the advantage of simply accessing and using the web-based software, services, and applications without worrying about managing them. Top SaaS vendors offer service level agreements (SLAs) to ensure guaranteed delivery, maintenance, and management of the IT services they provide.

Upgradeability

The cloud provider handles software and hardware updates. This can free up your IT employees’ time and they can focus on other work such as integrating the solution with your existing systems to expand its usability and effectiveness.

Competitive Edge

You can boost your competitive edge in the market with cloud software. The solutions allow you to deliver and deploy critical business applications speedily and without major upfront costs. You can stop thinking about technology and concentrate on your vital business objectives and activities. In short, SaaS software can minimize the time you need to market new services and applications.

Scalability

SaaS software can scale easily to meet your company’s growth and greater demands. You can easily add more users and features when required. With on-premise software, you would have to shell out for additional software licenses and server capacity. You can save these costs with a cloud system.

Now, let’s take a look at the drawbacks that can hamper your successful implementation and use of SaaS software:

Major Drawbacks of SaaS Software

Downtime and Outages

Top cloud providers cater to many clients. This means they may not be able to provide you the best service. Outages can occur due to any reason and if your internet connection goes down you would not be able to access the application or data. A lengthy downtime can be disastrous to your business. So, do your research beforehand about the vendor’s historical performance and read their SLA thoroughly to learn about their reliability.

Security

The main concern about online software is security. You would need to entrust your confidential company and customer data as well as business processes to a third-party cloud provider. This means you need to address areas such as access management and identity to ensure only authorized people can view and edit sensitive data. If your organization uses multiple SaaS systems, it can be a headache to deprovision exiting employees.

Using the public cloud through multi-tenant architecture is risky because the vendor hosts multiple users on the same server. This can expose your data to hacking risks. Therefore, check whether the vendor you choose uses the latest security measures to keep your critical business data safe and secure.

Vendor Lock-In

Though many providers offer flexible packages, you may not able to switch cloud services and migrate smoothly to another vendor if the need arises. This is because hosting a current cloud application on another system can throw up support and interoperability issues. For example, apps developed on Microsoft .Net may not function properly on Linux. So, prepare a viable exit strategy beforehand to ensure you are able to migrate your business process and data easily in case you have any issues with the current vendor.

Minimal Control

The SaaS provider entirely owns, manages, and monitors the cloud system, which means you as a customer have minimal control over it. You can only manage and control the services and data, but not the backend system as well as important administrative tasks.

Compliance

You need to be careful about complying with government regulations on data protection as your company’s data is stored in the cloud vendor’s datacenter. Find out which regulations are applicable to your company and get help from your SaaS provider to ensure compliance with them.

Performance

In this aspect, on-premise software is preferable as the application can give better performance compared to SaaS software that is hosted on the provider’s datacenter and accessed using the internet. This makes it mandatory that you have a fast and reliable internet connection to make full use of the cloud platform. Service providers and businesses can make use of application performance management products to monitor how their solutions are running.

Integration

Software integration can be a problem if you use multiple SaaS systems or wish to link cloud apps with on-premise solutions. You would need technical help to handle the APIs in-house. Alternatively, you can try Integration-platform-as-a-Service (iPaaS) products such asInformatica, CloudSwitch, and Boomi.

Bottom Line

Cloud computing offers major benefits such as reduced costs, minimal downtime, and easy management. But at the same time, you also need to consider the drawbacks mentioned in this article and craft effective strategies to overcome them. Do your research thoroughly and check out the free trials of leading SaaS solutions to find out about each app’s pros and cons and whether it offers the features your company needs.

About the author

Chief editor of the review team at FinancesOnline, Alex Hillsberg is an expert in the area of B2B and SaaS related products. He has worked for several B2B startups in the past and gathered a lot of first hand knowledge about the industry during that time.