SAAS Model Gains Steam
The SAAS model is gaining steam. In a July 2007 survey conducted by eWeek sister publication CIO Insight, 27 percent of respondents said their companies' IT architectures were fundamentally based on SAAS, while 73 percent said they planned to expand their use of SAAS applications.
While Harris and his team were aware of SAAS' benefits, they were not without initial trepidation.
"I clearly had a number of concerns, and my business partners had additional concerns-or the same concerns more intensely," Harris said. "In my experience, the economics of SAAS are better than the economics of buying technology, implementing it yourself, hosting it yourself, etc., but you can't just walk willy-nilly into SAAS and expect that it's going to work, because it won't."
Service levels and security were two major concerns, he said.
"If I have some other company running key technologies of mine, if there's a problem in the middle of the night, are they going to respond to it the same way we would? ... What if they have access to all my data? Or, if my data is on their systems, what if somebody else accesses it? Does it expand the data risk, the security risk?"
Other concerns included business viability and integration.
"What if they go out of business tomorrow? What if they start running into economic problems and they shortchange their service as a result? ... How easy is it going to be to get third parties to integrate all of our systems?"
In the end, Harris determined that three of those four main concerns-service levels, business viability and integration-could be taken care of with good contractual arrangements. The fourth-security-could be resolved through technology, such as encryption. Harris added that any vendor must demonstrate that its offerings can enable Shaklee to adhere to PCI (Payment Card Industry) and other regulations, further ensuring that security standards are being met.
That said, Shaklee initially took SAAS baby steps: "When we elected to go with software as a service, we said, -We're not going to jump in the water; we're going to put our toe in first and make sure the water's not freezing cold.'"