The case for adopting best-of-breed SaaS applications is pretty clear. Users want what they need, where they need it, when they need it, with any available innovations and without the costs and IT headaches of “CD” software. But following up on yesterday’s CPO discussion of risk management, it was good to hear Bob Tarzey, Services Director at Quocirca, cite risk management as another key driver for SaaS adoption.

Obviously when SaaS - with it’s redundant datacenters and energy sources - is compared to applications and data housed onsite on company servers, the less risky choice is clear. But SaaS still has a ways to go in terms of their relationship with IT…although it seems clear that IT’s tight grip on all things digital is gone and end users are winning the war.

So why is the tide turning in favor of SaaS despite some IT objections? According to Bob, there are a few undeniable factors:

• Firewalls are coming down - What business user can survive without access to SaaS applications like WebEx or Salesforce? After a long battle over letting those and other apps through the network gates, the end users have won. IT simply can’t hold their end users back, strangling their productivity as more and more critical applications move online.
• Security (technical) - Sure the web is still full of risky phishing scams and Nigerian royalty wanting you to help them with wire transfers. But the bulk of major SaaS providers have been around for quite some time and recognize that protecting customer data is essential for their reputation, legal protection and revenues. There will always be risks with data online, but that threat has been greatly reduced by improved encryption and the business incentives for providers to focus on security.
• Security (users) - Your business and security are only as good as the weakest link in your process, technology or people. That rule rings true for applications behind the firewall as well as those delivered on-demand. But proper training, workflows and incentives can help keep your employees abreast of the risks and their role in preventing dangerous, costly or embarrassing breaches in security on a SaaS application.

Justin Fogarty is Managing Editor of Supply Excellence and will be covering Ariba LIVE 2008 Europe from Brussels this week. Any feedback or questions about the event of blog can be directed to Justin at jfogarty[at]ariba.com.

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