Security Issues on SaaS Model Are Myths
By Amit Tripathi
Mumbai, May 29, 2007

Although the demand for Software as a Service (SaaS) model is on the rise in enterprises in the Asia Pacific region, a major impediment to its wider adoption is the lack of awareness that such a model exists.

Speaking to CXOToday.com, Ravi Shekhar Pandey, manager (syndicate research) of Springboard Research said, "There is a general lack of awareness and disbelief about the existence of the hosted model of IT usage. This is one major reason why some myths like security and reliability are associated with SaaS."

SaaS is a software delivery model that runs on a subscription-based fee. The users do not buy the license of the software, but only the right to use it. The solution provider retains the responsibility of supporting hardware, and maintenance of the solution.

Today, in the name of SaaS, all that IT heads, especially of small and medium businesses (SMB) and of many large enterprises, surmise are the offerings from Salesforce.com, Google, Microsoft, and the likes. "Even the awareness and understanding about these offerings are not pretty clear among them. This is why many SMB organizations think their data is unsafe as it would be handled by an outside agency", clarifies Pandey.

Pandey adds that what goes generally unobserved is the fact that the SaaS solution providers spend heavily on their datacenters to ensure security of customer data. "Even otherwise, security remains a manageable aspect in a similar manner as it is on solutions that are used in house," states Pandey.

Another issue that dogs the wider adoption of a SaaS based solution is the view that such solutions require a lot of customization. "This is again a myth. Today, the collaboration tools or a CRM tool available on a hosted model need little or no customization", adds Pandey. He believes that the decision to opt for a hosted solution usually is taken by business users. It is only the IT department that gets preoccupied with the security or customization part, without probing deep into various features of an offering.

As of now SaaS adoption is mostly limited to enterprises in verticals such as IT and ITES. Many BPO houses, for instance, have opted for hosted IT help desk services.

Springboard Research in a related report earlier this month had revealed that in India, web conferencing and collaboration represents 43% of the total SaaS revenue. Other areas, where the firm believes there would be strong demand of SaaS offerings, are ERP, supply chain management, and human resources management (HRM) applications.

The research firm states that Indian software vendors are slowly entering the SaaS marketplace, but North American vendors currently dominate the market with web conferencing and collaboration vendor, WebEx leading the Indian market.

"The need of the hour for vendors is to educate the emerging SMB segment in India on the availability of SaaS based offerings, the advantages that accrue as organizations opt for such a model, etc. This would go a long way in dispelling myths on reliability of SaaS based solutions," says Pandey.