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The Cloud – Risk?

February 1, 2013

There are many companies that can benefit greatly by moving their business to a SaaS model and a visit to the Cloud Expo at the London Olympia this week would give any perspective IT Director much food for thought. The increase in adoption of cloud based services across all sectors and the number of SME tech companies providing innovative solutions to all possible scenarios is very encouraging.

The benefits or risks of SaaS are well documented, driving a 21% increase in sales as more companies become familiar with the model. Organisations across all sectors are turning to SaaS to leverage benefits in security, scalability and low costs and, with vendors providing access to hardware, software and all updates for a monthly fee under the model, organisations are also able to transition their own IT resource towards adding value to their business, rather than spending time on network maintenance.

SaaS also proves a quicker route to market, as organisations launch services and products in a matter of weeks rather than months, resulting in a correspondingly significant ROI.

While SaaS is without doubt the business model for now and increasingly for the future, specialist vendors have come across certain risks when the service is implemented poorly. While these are easily addressed, they are worth noting when considering a vendor’s track record.

  • Network issues – SaaS’s great strength lies in the fact that the Internet is accessible anywhere and at anytime. However a system outage can affect users unless back-up systems are in place. The use of a failover service is recommended if the application is of a critical nature.
  •  Security – while the move towards consumerization and remote working have changed the face of traditional IT defences, organisations moving to a SaaS system are outsourcing their security to the vendor. As a result, any decision to move to SaaS must also take into account a thorough analysis of the vendor’s defences and security policies. If the supplier is based in or uses data centres in another country then there are further considerations that must be addressed. See here
  • Third-party dependence – through accessing data remotely, organisations are increasingly reliant on a network of third parties, all of which must remain online at all times. If any part of the system fails, it all fails, which is why specialist vendors have redundancy built into their service.
  • Secure the source code of the application you rely on – by using SaaSe data escrow agreements you can mitigate the risk of the Software as a Service supplier going bump. If you have the source code and the operational components then you are not at mercy of the supplier.

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written by David Clee

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