Disadvantages of the SaaS model

Service Business

SaaS is a fairly young technology, which nevertheless brings together an increasing number of users. This is because its strengths are most often emphasized or the Saas model is compared with traditional software. In such comparisons, the latter is usually quite pale, and yet the choice of the form of software depends on the individual needs of a given enterprise. The advantages of Saas are not unquestionable, because for some they will still be advantages, and for others they will become disadvantages.

Many entrepreneurs, precisely because of its freshness and going through the phase of constant changes and development, still prefer the classic type of software that can be installed on a computer and thus personally control its updates. Moreover, entrepreneurs using the SaaS model do not have to entrust their data to third party suppliers, nor worry that when the Internet connection drops, they will lose access to the software. In most cases, these fears are unfounded, simply conservatism and old habits win.

However, there are also those who willingly use the benefits of SaaS, not realizing its drawbacks at all and thus falling to the other extreme. Of course, the advantages of SaaS outweigh the disadvantages, but it is good to know about the existence of both. Therefore, below we present a short list of the disadvantages that may be behind the modern SaaS model.

Disadvantages from the point of view of the customer

  1. The necessity to have an efficient and reliable internet connection. If SaaS significantly affects the operation of the company, a second Internet connection must be installed, which in the event of a failure of the first one will keep the system operational. Unfortunately, there are additional costs associated with this.

  2. Absolute dependence on an external supplier, the need to trust him, refine contracts, when he is entrusted with a function important for business - most often a CRM system.

  3. Lack of a sense of security - a common phenomenon that prevents entrepreneurs from paying a subscription for SaaS, because they entrust suppliers with confidential and often the most important data and therefore demand a guarantee from the supplier that no one else will have access to this data - nor the company's employees, nor other customers.

  4. Concern about the security of stored data and uncertainty as to the efficiency of the backups - whether it will be possible to extract the data in the event of a failure or collapse of the provider.

Disadvantages from the supplier's point of view

  1. Delayed return of money invested in building the SaaS platform, because high income is not a one-off, but measured on a more distant scale (subscription revenue model).

  2. Building and maintaining a scalable infrastructure for delivering SaaS services that will be available from the outset comes at a high cost.

  3. Traditional software is easier to develop than the SaaS model because it does not have to cope with multithreading and application complexity, customer data separation, and the ability to scale rapidly.

  4. No customer loyalty to the same software vendor. The customer may resign from his services at any time. As a result, the supplier has to do much more to satisfy the customer's satisfaction, to gain his trust and, consequently, also loyalty.

Some of the above-mentioned disadvantages can be turned into advantages, e.g. the ability to opt out of SaaS at any time makes customers so willing to choose this type of modern software. They know that they do not have to be permanently associated with one supplier. The truth is that there are many more advantages to SaaS than disadvantages, but each medal has two sides and it is worth remembering, because overlooking a defect may turn out to be disastrous for the operation of a given company. As they say: "forewarned is forewarned".