Software as a service vs Good Old ERP

There are words in the air about what is best for your business! Bill McDermott from SAP in an interview with Information Week said that Saas was harder, riskier and more expensive than people have first thought.  What I can’t be clear on is whether that is from the supplier or customer perspective. Clearly SAP have said that they have throttled back their Business-by-Design product while they applied some lessons learnt so maybe that is what Bill is referring to.

On the other hand Salefsorce.com has recently had a blip whereby all its customers were left stranded for at least 40 minutes  and some areas nearly two and a half hours  last week. This isn’t the first time this has happened although the last a couple years back was somewhat bigger in scale. An interesting website appears to log the status of the service, SalesforceWatch.com.

The single big disadvantage of the widespread usage of SaaS is that if it goes down ( and it will at some point ) everything you need is unavailable and that applies to millions of users. The advantages are not having to worry about all the things that might disrupt your service, just limiting yourself to the robustness of your WAN and LANs. Problems with software provision come from two sources – either change management or failure of hardware (this would include network and power supply). In my experience change produces the highest frequency of disruption – the old adage “it isn’t broken so don’t fix it ” often being a cause.

So I guess the choice is yours – but attention to detail when constructing your SaaS contract not around the software but around the service provision is the key, and you should examine in detail the business continuity plans and undertakings of the supplier. Service credits for outages aren’t really worth anything if you can’t run your business and anyway will be pitifully small in comparison to the cost of the disruption. Obvious really!

Perhaps it should be renamed Service and Software?

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