The SAAS Industry Will Die…
Juan Carlos Perez raises some vary valid issues through the recent article “Study: Clear Strategy Key for SaaS E-Commerce Success.” In order for the industry to survive, we need a new way of evaluating these companies – SAAS 70.
SAAS 70 would be the equivalent of SAS 70 (Statement on Auditing Standards No. 70) for the SaaS industry that would provide a standard approach to evaluating this new type of service-oriented company. While SAS 70 defines the professional standards used by a service auditor to assess the internal controls of a service organization, this SAAS 70 auditing statement would address the critical aspect of SaaS that are important to subscribers – Software Development, Operations, and Continuity of Operations.
SaaS is more than just adding a few new features to existing set of applications (e.g., multi-tendency). SaaS is about software (e.g., continuous integration, compatibility control, etc.), operations (e.g., performance, scalability), and continuity of operations (e.g., process and data availability and reliability – MTTF and MTTDL, respectively). Existing evaluation techniques are inadequate for assessing these business characteristics under the SaaS paradigm.
So, in order to evaluate SaaS providers, subscribers need to look from the outside-in; that is, starting with a view of how continuity of operational activities are achieved first. For example, if a subscriber is from a regulated industry that requires 1, 7, and/or 14 year information retention policies (e.g., healthcare, high education, financial, etc.), then understanding how SaaS providers protect data for that same period of time is extremely important – just ask any public company CEO/CFO who has to sign their name on the 10K/Q.
As an industry we need to step up and deal with this issue soon or face the real possibility of failing within the next few years. Let’s not wait for the equivalent of the Fen-Phen lawsuits to hit before we take the assessment actions we know we need today.
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