Risks With SaaS

• SaaS, which stands for Software as a Service, is a way that software is provided to users over the Internet. Websites give users instant access to a program, such as supply chain management software, for a small fee. Although this is a very useful and efficient method of providing software, there are several risks involved with using SaaS.

Security

• Important data that is used with the SaaS software is stored on servers not controlled by the user of the software. For example, a company using accounting software via SaaS would have all of the accounting data stored on an off-site server that is not regulated by the company. In short, the company does not have full control over its own documents.

Backup

• Because data input into the SaaS software is stored off site, it is hard to regulate whether there is an appropriate amount of backup servers in case of a natural disaster or data corruption. Lawyers Christopher C. Cain and Kenny W. Hoeschen of Foley & Lardner LLP state that the SaaS vendor's disaster recovery, data backup and business continuity capabilities must be fully evaluated before signing any contract.

Reliabilty

• SaaS software cannot be modified by the user as it is hosted by another server. This issue raises questions with the reliability in case the software becomes outdated and needs to be updated, or if certain settings with the program must be changed for any reason.