Subscription-based services are revolutionising the way many of us consume everyday products. From Netflix and Spotify giving instant access to vast libraries of content, to meal kits such as Gousto and Hello Fresh taking the complexity – and up-front effort – out of preparing a meal.
Things are the same in the business realm, where vendors and their customers are embracing software as a service (SaaS) to take advantage of the capabilities of a vast range of modern applications while minimising up-front costs and complexity. However, before they tie the knot with a SaaS provider, organisations need to be well aware of both the benefits and the potential drawbacks – and how to address them.
For better or worse
So how is SaaS enticing so many businesses to exchange vows at the altar? Specifically, the benefits come from three key areas:
Cost: SaaS’s main cost benefit is often seen as the removal of up-front CapEx from the business model. However, this doesn’t necessarily translate into a lower cost over the entire lifespan of the application. Instead, the benefit of the subscription-based model is its predictability. Businesses can understand and allocate their budgets well in advance, knowing they have a steady, predictable expenditure rather than having to account for implementation, management and training costs.
There may even be greater flexibility involved, with service providers offering multiple tiers of pricing for different features – allowing organisations, particularly those with a limited budget, to choose exactly what they need and potentially access software they might otherwise have been unable to afford.
Maintenance: Closely linked to cost, a SaaS approach removes the need for ongoing software management. At its most basic, patches and updates will be applied automatically – instead of the business needing to ensure it makes time to do so in order to address potential security issues or access new and improved features.
In turn, this frees up the IT department to concentrate on what should be one of its core roles – ensuring that the business has access to the technology it needs, and planning new ways to improve the organisation – without the concern that employees are using outdated tools or opening the business up to security risks.
Mobility: Today’s employees are looking for flexibility in their working lives – and workplace mobility plays a big part in that. However, it needs the right technology to work – recent research shows that 80 per cent of office workers have felt disadvantaged at work by not being able to use the technology they want.
As a result, businesses are embracing remote working policies. This is where SaaS comes up trumps – as cloud-based services, applications can increasingly be accessed anywhere with a network connection, on any device. As a result, businesses can give their employees more freedom to work in the way they want.
For richer or poorer
While the benefits are attractive, any organisation considering SaaS also needs to be aware of the potential drawbacks:
Security: With SaaS taking away so much of the pain of managing software, it could be easy to fall into the trap of thinking that SaaS providers are also responsible for ensuring data security. However, the buck still stops with the business. As a result, organisations have to be certain there are appropriate security safeguards and protocols in place, rather than just blindly assuming the default service will be optimised to reduce risk.
The rise of mobility, and SaaS’s role in this, has added a new challenge for IT departments. Employees will want – and need – to access their SaaS applications from anywhere. The business has to be certain that every single one of these potential endpoints is equally secure.
Contractual obligations: Compliance is a huge concern for businesses partaking in SaaS offerings. SaaS contracts can be difficult to understand and the penalties for overusing licenses are often steep, requiring large, lump sums in order to get up to date quickly.
The drive to workforce mobility means it is more difficult to track licences than ever before, and the introduction of other new touchpoints in the ecosystem, such as Internet of Things devices, means managing software assets to ensure the business is not breaking its contracts has become an incredibly important part of the IT department’s job.
At a top level, the company needs to know how many licenses each business unit or department is using – as well as how many the business is entitled to – in order to avoid over- and under-usage.
Loss of control: Ultimately, the SaaS model turns a great deal of control of business applications over to the service provider. Naturally, this can be a good thing – for instance, with SaaS applications receiving automatic patches and updates. But it can also have issues – for instance, what if an update removes a critical function? Or if a service provider stops operating altogether?
Similarly, it also means that service providers have a deep insight into their clients’ usage, and won’t hesitate to audit a company who is using their software in a way they believe violates their contract. Brewing group Anheuser-Busch InBev discovered this the hard way when SAP sought a $600m payment for unlicensed use of its software, with the case settled out of court for an undisclosed fee.
Any auditing process will be largely controlled by the publisher and, if not prepared for it, businesses can find themselves struggling to navigate it. A knowledgeable third party can help find a path through while limiting the financial repercussions.
The secret to a happy marriage
For a happy marriage with SaaS, you need full visibility over all the contracts and agreements that are in place – it is nigh-on impossible to be in control without these firm foundations to build on. Software Application Management (SAM) tools can prove invaluable in this process of gaining and retaining control over SaaS.
SAM can help organisations understand exactly how many licenses they are using; how many licenses they are entitled to; and control the way in which those licenses are acquired and used in the business. This will allow the organisation to nail down details that are increasingly mission-critical in the age of SaaS, such as ensuring compliance and avoiding painful publisher audits.
With a rock-solid picture of their consumption levels, businesses can use even more intelligence in their relationship with SaaS providers. For instance, they can build an understanding of which employees are using which applications, how regularly, and which features and functions they are not making the most of. This information will empower the business to make more informed decisions not only on what they currently have in place, but future purchasing decisions – ensuring they enjoy a long and happy marriage with SaaS for years to come.
Interested in hearing industry leaders discuss subjects like this and sharing their use-cases? Attend the co-located IoT Tech Expo, Blockchain Expo, AI & Big Data Expo, Cyber Security & Cloud Expo and 5G Expo World Series with upcoming events in Silicon Valley, London and Amsterdam and explore the future of enterprise technology.