Tips for first time buyers: You’re about to acquire your next business…so, move everything to the cloud (and take advantage of the migration to SaaS)
By Alan Hutchison
If you and your business are already big users of SaaS based tech then you’ll know exactly what that means and how you’re using it. If so, then you certainly won’t need to read this article. If at the other extreme you think you’re not using Software as a Service at all yet, you’re almost certainly wrong about that. At the moment Dropbox, just for example, is rapidly heading towards a billion individual active users globally, with most of them still on ‘freemium’ access. STOP STORING FILES ON YOUR DESKTOP. Given the stellar SaaS advantages, small business and corporate-based paid premium Dropbox usage is sky-rocketing. So the odds are that you are already, at the very least, using this particular iteration of SaaS very regularly. If your business or start-up enterprise is to prosper, then one key essential is to understand the benefits and costs of the numerous SaaS offerings and lever these to your best advantage.
How much time should you be sending on this?
Chances are that regardless of whether you are selling products, services or personal experiences, your business is based largely on your own and your team’s communication and people skills. So the question is, what proportion of your time should you be spending on managing your IT structures when this isn’t your core business, your passion or your skill set? The answer is obviously, as little as possible. And this is where SaaS comes in.
If you decide to go largely stand-alone or ‘on-premises’ with your IT management then you are committing a significant proportion of your available time and resources to maintaining the currency of applications; creating adequate, retrievable and shareable data; and ultimately taking on the burden of servers, storage and network sharing capabilities. That means you won’t have the time you need to develop your real business – or else you’ll need to hire a specialist in-house IT person or small team, which even if viable isn’t cost effective.
There are intermediate options such as Infrastructure as a Service (IaaS) which comes in at the network sharing stage and provides the external servers and storage. However, it is generally much better to commit from the outset to fuller scale SaaS, which externalises all applications and data management. This enables you to concentrate on core business and to be free of software access constraints so that with no downloaded applications to manage and keep updated you can work from virtually any computer or device in the world, along with other members of your team. The cloud application services, managed by a third-party provider, are run directly through the internet web browser and don’t rely on any downloads or installations by you at all. That means that ‘on the road’ functionality becomes exactly the same as ‘on premises’ functionality for you and every team member.
What are the main advantages?
So, the major advantage of using SaaS is that it frees you to devote your time to what you are really passionate about and trying to achieve in your venture. It’s a great way to launch e-commerce with no software or server issues, no need to buy expensive downloaded software programs, no problems with access from mobile devices, and unlimited capacity for real-time data and document sharing with team members.
SaaS takes on the management of virtualization, in which a local workstation operates exactly as if it was using an installed application without this actually being the case. Additionally it enables users to remotely access their own personalised desktops from any device in virtually any location. Hardware virtualization ultimately enables an off-site third party processor to behave as if was many different individual processors working on the same hardware from team members’ own locations. The advantages include greater efficiency and lower costs as team members can access the company’s networked information from anywhere, embracing the increasingly expected (because cost minimising) BYOD approach.
What about the cost?
The costs of using SaaS are generally very manageable with the key advantage that levels of service access, data storage limits and the like, can be adjusted at any time. SaaS is commonly used to deliver business applications such as accounting programs, customer records software including management of orders or bookings and, for larger businesses, HR management software. Automated multilingual versions of documents can be included. There is obviously much lower up-front cost, as you are essentially renting rather than owning the asset, virtually immediate set-up and access as the applications are already fully configured in the cloud, and there are automatic updates and easily managed scalability, with plan upgrades (or capacity downgrades) adjustable on demand. This flexibility is a great advantage and there is essentially no significant hardware, software or server depreciation to be factored in.
Are there any disadvantages?
There are really very few disadvantages of SaaS. The initially understandable concerns around data security breaches are not really well-founded, as the enormous success of cloud-based accountancy provision such as Xero attests. However, the dependency of SaaS on uninterrupted fast internet connectivity, plus the potentially lower speeds compared to on-premise user applications can cause some occasional headaches.
When you are ready to choose your SaaS provider, then as with any contract it’s a case of ‘buyer beware’. As with everything, it’s easy to enter into a provision agreement but it can be much harder to exit it. In particular, carefully check the provisions for exporting your data to another destination of your direction if you leave that provider – and ensure that the export will be in a standard format which will enable it to port over to another SaaS provider.
Migrating data can be very costly in terms of time and money. That’s why it’s a good idea to move your own business data to a SaaS provider from the very outset or as early as possible. There is no definitive list of pre-eminent SaaS providers, partly because most of them specialise in a particular market segment. Request Service Level Agreements (SLAs) from a few providers and carefully cross-reference them, as well as verifying the vendors’ reputations and their customer reviews. Try to make contact with a couple of their clients directly and find out what they have to say about their experience of service reliability and technical assistance. Compare pricing plans and remember that if a provider’s prices and the promises seem too good to be true – then they almost certainly are!