5 Drawbacks of Software as a Service

Software as a Service, or SaaS has been the darling of the software industry for the past decade. The idea of “leasing” your software vs “buying” your software has many benefits, but it also has some downsides which vendors will quickly gloss over as they try to sell you their SaaS platform. This article exposes 5 of these drawbacks, so you can make an informed decision as to whether SaaS is right for you.

What is SaaS? We will put simply it is the combination of software that does something, provided in a way that you can easily consume without having to worry about upgrades, hosting, support. A good analogy is a car that you lease per month, with a maintenance package that lets you take it back to the dealer if anything goes wrong. As its software the SaaS provider can also push updates to you when new features are available.

So, what then could the drawbacks be?

1. Vendor lock in. The biggest drawback is that once you have designed and deployed your SaaS solution, it is extremely hard to break away from it. You are locked into that vendor, and they know it, so pricing will inevitably increase over time. Add-ons in their ecosystem will cost you more than they would when you are a new prospect. When you are done with a SaaS vendor, a lot of hard work and effort in building your properties is lost and must be reworked, often from scratch.
2. The “taxation” effect. Most SaaS offerings charge you based on a business metric – such as % value of sales (Gross Merchandize Value or GMV). When you are small and getting started this can be great, but as you grow the percentage also grows, like a tax on your income as you earn more you pay more. Think of it as a charge per mile on a leased car as you drive it a lot – the extra charges can really hurt.
3. Stuck in the box. SaaS offerings often define a box as to how you operate – as the SaaS vendor must ensure that all their clients work the same way. This stifles your ability to innovate, as you are bound to the template or API set that the vendor has created for you. Your sites end up looking or working like everyone else’s. Sure, its simpler, but it is also cookie cutter in a world where you want to stand out from your competition.
4. Ownership of your data. In most cases with SaaS, you sign away rights to the aggregate value of your customer data. The vendor owns the patterns they can find in the consumer data that is coming your way on your public property. You can also find yourself in a situation where the SaaS vendor dictates what you can and cannot do on your own property – such as selling items or voicing opinions that do not fit their political views.
5. Updates on a Vendor’s timetable. In a multi-tenant SaaS world where you share infrastructure or APIs with other clients, you can find that you are stuck waiting for the SaaS vendor to issues updates, or the opposite – updates are forced upon you causing you to scramble to fix things that might be broken. There is also the issue that overall performance is out of your hands as you are sharing things with other customers, potentially ones paying more to the vendor than you do and getting better attention as a result.

At HCL we have a different take on SaaS. We like the benefits, but we want to build a better way of avoiding these drawbacks. Particularly for our customer base who typically choose us based on being able to operate independently, in a variety of deployment models, with high degrees of customization, and at extremely high peak volumes.

Our philosophy is simple:

1. You should be able to pick your infrastructure, not have it forced upon you. Our goal is to allow Commerce to run on any public cloud infrastructure or on-premises equipment.
2. Commerce is one version. Our goal is to provide one code base for our Commerce product and allow it to run in any of these deployment models/cloud models.
3. We are in the software business, not the hosting business. Our goal is to provide the best software product we can for Commerce, not to make money on how and where its hosted and managed.
4. Customize to your hearts content. Our goal is to allow you to customize our product on your schedule. If we do not have it in the box, then you can build it when you need it.
5. Own your data. Your data is your data, not ours to provide insights on for other customers.
6. Own your performance. Cloud native technologies allow us to provide every customer with their own “single tenant” infrastructure. This ensures that your environment is sized to you, and your performance will never be degraded by sharing with other customers.
7. Pricing based on volume not a tax on your income. Our pricing philosophy is not to work out how much you make and charge you a % of it. We base pricing on volumes not dollars.

Hopefully, this made you stop and think a little more about what makes sense for you. Reach out to us with any questions or to set up some time for a deeper discussion about what your business needs. Contact Us Here