Disadvantages of SaaS

SaaS has significant advantages over other model such as third party hosting but even SaaS is not a perfect solution for all the problems and have some limitations. 


Some of the key limitations / disadvantages of SaaS are:

  1. Security and confidentiality – while working from anywhere / anytime is an important aspect of SaaS this also implies that sensitive data has to be stored online on third party servers. This can be an issue in some of the functions for example, accounting, etc.
  2. Risk of data loss – A SaaS provider have to be chosen wisely as there is an inherent risk of losing valuable data if the vendor goes out of business
  3. Dependence on high speed internet – A high speed internet connection is must for SaaS, while this is not a big challenge in developed nation, it can be a serious limitation in developing nations with poor infrastructure and unreliable connectivity. Thus firms should choose wisely understanding the connectivity bottleneck.
  4. Low predictability of cost – Based on a survey by Gartner, current customers were least satisfied with the lack of predictability of cost in SaaS implementation. This primarily is because of the unpredictability in post sales support and maintenance services.
  5. Not all applications have SaaS versions yet – Many firms need very industry specific business applications which do not have a SaaS version presently.
  6. In many cases SaaS versions may not be as powerful as non-SaaS ones – Compare Google excel sheet with MSExcel, The MSExcel has many more advance features as compared to the SaaS version. Similarly, may more SaaS versions are stripped down versions of a powerful non-SaaS product.

This indicates that SaaS do have some limitations / disadvantages and is not suitable for everyone to the same extent. Thus firms looking for SaaS solutions should carefully evaluate their options and vendors before going ahead.