SaaS for enterprises

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Lately, I am thinking a lot about Software-as-a-Service (SaaS). I can easily see the benefits of SaaS, which I will not discuss here. But I have concerns too, especially in using SaaS on an enterprise scale. Currently, using SaaS means accessing applications (e.g. a word processor, or a spreadsheet application) through the web. The benefits […]

Lately, I am thinking a lot about Software-as-a-Service (SaaS). I can easily see the benefits of SaaS, which I will not discuss here. But I have concerns too, especially in using SaaS on an enterprise scale. Currently, using SaaS means accessing applications (e.g. a word processor, or a spreadsheet application) through the web. The benefits of that are easy enough to grasp. I have more difficulties grasping this on a bigger scale: using SaaS on enterprise scale.
Here are the questions that I have at the moment:
1. How sensible and safe is it to base important, critical parts of your business on SaaS?
Suppose you would use SaaS for something strongly data centric such as ERP. In such a case, the ERP Service provider is responsible not only for providing the required functionality and UI, but also for providing storage of all your data. In other words: would you trust your data to the service provider? Should a government use SaaS in that way for examle? What if the SaaS provider goes bankrupt?
2. Do you always have to accept changes made to the software by the SaaS provider?
With classic software, you can use a certain version of that software as long as your system can support it, even after the vendor of that software has stopped providing support for that version. A property of SaaS that is often named as a benefit is that you always have the latest version. Is that really always a benefit? Businesses using SaaS will base their workflows on the functionality and user interfaces of provided software.
3. Is SaaS mature enough for providing enterprise level QoS? Will it ever be?
This concern is related to my first question. Basing critical parts of your business on SaaS requires certain guarantees about availability, reliability and performance. Can such service level agreements be made individually for every business?
Don’t get me wrong, I really digg the concept of SaaS. I am a definitive adopter of SaaS. However, I feel that these are important issues that I would want answers for before I would advise SaaS on an enterprise scale. The Progress Software Foundation is providing some answers, which is reassuring.
Maybe I am thinking too far ahead. Tell me what you think.

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