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    Five SaaS myths debunked

Gartner warns businesses against assuming that software-as-a-service is right for their company.

By Nicole Kobie, 19 Feb 2009 at 10:18

Like much shiny new tech, software-as-a-service has quickly gained traction, but analyst firm Gartner has warned about jumping on the bandwagon without taking a good look at the delivery model first.

“In recent years there has been a great deal of hype around SaaS,” said Robert DeSisto, vice president and distinguished analyst at Gartner, in a statement.

“As a result, a great number of assumptions have been made by users, some positive, some negative, and some more accurate than others. The concern is that some companies are actually deploying SaaS solutions, based on these false assumptions.”

As budget constraints push some firms to consider the model, Gartner offers five SaaS assumptions to keep in mind. The myths listed aren’t all bad news for the software model, but could be for your firm if you choose to deploy for the wrong reason, the analyst firm warned.

Myth One – SaaS saves money

Gartner said that SaaS deployments are often cheaper in the first two years, because there is no initial capital investment. But it noted that over five years, the total cost of ownership might outweigh that of traditional software models, as the initial outlay has already been made.

Myth Two — It’s faster to deploy SaaS

While SaaS is indeed an easier and quicker way to rollout simple systems, that may not hold true for more complex solutions – especially those being customised. According to Gartner, vendors may promise deployments in 30 days, but they can take over seven months in reality.

Myth Three — SaaS is utility computing

Gartnery called this assumption “false in the vast majority of cases”. Most SaaS users are not charged by use, but on a set contract, regardless of whether the software is used or not. “In some cases, the application lends itself to metered use — for example, an e-commerce application may have pricing based on order transaction processes — but for the most part, utility examples are in the minority,” Gartner said.

Myth Four — Integration is difficult

According to the analysts, SaaS can be integrated with office-based apps or data using batch synchronisation, real-time web services or mash-ups – so it’s no excuse not to use software-as-a-service.

Myth Five — SaaS is best for basic systems

While Gartner noted that complicated end-to-end systems may not be best served via a SaaS model, the analyst firm said the ability to configure means highly customised applications are possible, especially under application platform as a service (APaas) systems.

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The Myths Hold True for Small Companies

this article would seem to talk companies out of going for SaaS solutions, since some of the major benefits have been proven to be myths. but although, from a sweeping perspective, the assessment is accurate, but from a smaller business perspective the myths are in fact "true". in our case, we are a small law firm and use SaaS application <a href="http://www.hyperoffice.com">HyperOffice</a> for our collaboration and productivity needs, and i will elaborate how some of these myths arent myths at all when seen from our view point. 1) SaaS saves money - it does save money, especially if youre a small company. the implementation of some systems like Exchange is just not financially possible (also considering the cost of hiring IT personnel). a SaaS based application breaks down the costs into monthly installments which is at least within reach financially. gartner has also not considered the cost of opt-out. If circumstances changes, and the company has to change an owned software, it still has to bear the costs. with saas, you simply stop paying the rent, and no sunk costs will accrue to you. 2) faster to deploy - it took us just a day to get started with our collaboration platform with HyperOffice, which included intranet and extranet workspaces, document management, forums, permissions management, contact management, webmail and Outlook synchronization etc. as gartner says, deployment is faster only for basic systems. the fact is, most smaller companies need only basic systems. 3)SaaS is utility computing - it IS utility computing in a sense. you can plan costs according to planned usage. although the costs arent exactly proportionate to every minute the solution is used or not used, but you can plan the number of users expect to use the solution, space usage etc, and pay accordingly, and upgrade later if needed. with purchased software, you are always bearing the costs of underutilized capacity. 4) integration is difficult - we use HyperOffice to synch and share our Outlook accounts, as well as collaborate with MS Office files, and also manage online files from our desktop using the "web folders" concept. so a basic level of integration, the kind that most smaller companies need, is easy. 5)SaaS is best for basic systems - i would not know about advanced systems. but in our case, and for most smaller companies, basic systems are the most pressing requirement.

By Ip_pankajunk218b on Sunday Mar 8

3 people out of 3 found this comment useful.

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