Hedging Software as a Service

With marginal (and some formerly healthy!) companies being forced out of existence these days, it’s important to assess any technologies you use as a software as a service (SaaS) model.

The beautiful pro’s of SaaS-based services is that companies and organizations can access technologies and services at an affordable price point, paying monthly rather than massive annual licensing and support agreements. You also avoid needing to run or lease your own hardware for the service. A lot of companies can use tech that wouldn’t be availalbe to them otherwise.

However (you knew that was coming!), there are some risks that are much greater today than when growth was much easier for everyone. The primary risk is: what if the company providing the service goes under or ceases to offer the service you rely on? The more central that service is to your core operations, the higher this risk becomes.

That’s not to say that SaaS is a bad model. It’s a great one for many organizations and situations. Given our current economic environment, it’s good to assess your risk and do what you can to mitigate it.

Here are a few suggestions for minimizing and controlling that risk:

  • Back-up your data to your own storage. Your storage should be backed up as well
  • Identify other vendors who can potentially step into the breach. If the worst does happen you’ll need to get back up as quickly as you can. Knowing who is out there in advance will save you some valuable time.
  • Have a plan. What, precisely would you do if you had one week’s notice? How about no notice? For core services, this kind of disaster planning is critical.
  • Talk to your current SaaS provider frequently. Touch base at least once a month to see how things are going. Firms that are going to fail often give some clues before it happens if you are paying attention.

Proper planning and preparation can help hedge your SaaS risk to a great extent. The worst will still impact you but you’ll be able to get back in business much faster than you could otherwise.

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