Tuesday, January 06, 2009

Addressing business continuity issues with SaaS providers

Vinnie Mirchandani writes about the latest attack of traditional software vendors against software-as-a-service (SaaS) vendors: raising concerns about their viability. The argument is that, basically, if a traditional software vendor goes out of business, you still have a working system. But if your SaaS provider goes out of business, you've lost the system itself.

Vinnie thinks SaaS providers should proactively address these concerns, by laying out contingency plans for the worst-case scenario. I agree--and I would take it a step further.

SaaS vendor viability concerns are real and should be top-of-mind for any potential buyer of on-demand services, especially if they are mission critical or even "important but not mission-critical" systems. Vinnie is right that SaaS vendors need to address these concerns--not just as a sales tactic, but as a real issue.

Customers, on the other hand, should augment their internal disaster recovery plans with scenarios involving SaaS outages as well as "vendor-goes-out-of-business" scenarios. Business continuity planning (BCP) and disaster recovery planning (DRP) are well-established disciplines in IT management. Organizations just need to make sure that SaaS is not excluded from the BCP and DRP, just because they are not internal systems.

What are you going to do if your SaaS provider goes belly-up?

Related posts
SaaS: plan to get out before you get in


Matthew King said...

Many so called on premise solutions have similar vulnerabilities because one or more third parties are involved. So this problem is not unique to SaaS.

Maybe SaaS and other outsourced providers should create separate legal entities to manage their DR. The DR entities might then operate on a positive equity arrangement. Where a Production entity fails, the DR entity picks up until such time as the clients can migrate elsewhere.

Alternatively, some SaaS technologies allow a choice of on premise or in cloud. Maybe a client can have the DR system on premise and the production system in cloud.

Frank Scavo said...

Matthew, I like your ideas. I think that as SaaS matures as a viable alternative, some providers will start picking up such business continuity concerns as a buyer-concern.

Agree also that there is much more assurance with a provider that offers both an on-demand as well as an on-premise solution. I believe SugarCRM is an example.