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Software as a Service (SaaS) is no longer a new domain. Gartner Inc. expects it to be the second-fastest growing segment in the public cloud market in 2017. Forrester Research estimates SaaS subscription revenue to outpace on-premise license revenue by 50% in 2017. This implies that more and more companies are adopting SaaS for new applications or migrating from their current on-premise (or perpetual) license models.

If you are considering a SaaS model, you are likely moving in the right direction. However, here are some key considerations before you take the plunge.

Let us start with historical data migration. If you are using an on-premise application, you already have years of data. How will this be migrated and mapped? Check for two things—application programming interfaces (API) that can connect to your current applications, or easy application mappings. Even though most vendors offer a bulk-upload facility, you will need to time the migration from an implementation and performance perspective. This should ensure that you don’t have to fetch your reports and analysis from different destinations.

I’m not a techie, but a user of technology. Thus, functionality matters more than the licensing model. How will the SaaS application meet the customization requirements? While ease of use has been the hallmark of SaaS applications, you will need to identify how your earlier customizations will be provided for. Will this be through custom fields, new functionality or other means?

Once the data has been migrated and the customizations have been mapped, the next key thing is user adoption. How will the user choose the new software? How will the training and hand holding be done? SaaS providers offer multiple tools such as application-aided navigations, system prompts, online video tutorials, webinars and helpdesk to aid you in this task. This is one of the key facets of SaaS. It will help if you can create a calendar for your users by function/role before going live.

Data security is an often-discussed topic when deliberating a cloud strategy. Here, I’m reminded of a practice common among many Indians: keeping their gold assets in a bank locker. Why do they gladly hand over their hard earned assets to a faceless person? They go through the hassles of depositing and retrieving them every few months. Why do they think it is less risky than keeping them closer home? The fact is that the security systems at a bank are far superior to those at our homes. Banks can afford stringent infrastructure which makes it difficult for anyone to steal the gold, compared to what an individual can safeguard. The same logic applies when you are contemplating security in the cloud. A cloud services provider will take far more security measures than you possibly can. Check for things such as encryption and ethical-hacking certificates to ensure your SaaS provider is adopting best practices and technologies with regard to data security. Also, validate data back-up and availability capabilities of the provider.

The last point is about the total cost of ownership (TCO). The fundamental premise of SaaS is its ability to allow consumption on an operating expense model (versus capital expenditure) through monthly or annual subscription license. Instead of getting a perpetual license to the software, you get a term license—for the term you purchase (1, 2, or 3 years). If you are a small organisation, there is not much debate. But if you have more than 100 users, talk to your SaaS provider. Most offer different structures/models which can make better economic sense for you.

Also, because SaaS inherently includes infrastructure to run the application (database, compute, memory, storage) SaaS companies also embed these as part of their offering. Depending on the package you choose, you will get certain number of units per user. Check the details to understand how much it is, does it meet your requirements, and what will be the charges if you need to buy additional units. The same holds true for support.

Furthermore, you should not end the conversation without understanding the exit path—that is, the mechanisms through which you can take your data back should you need to change the cloud service provider in an unforeseen event.

There are some technical matters as well but I guess your chief information officer (CIO) will handle them. Now you are all set to say “Cheers" to SaaS.

Makrand Jadhav is director at, a SaaS platform for bid pricing and approval, which is owned by AutoSum Infotech Pvt. Ltd.

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