If you’re a company looking to reduce operational costs then you’ve likely investigated using a cloud-based Software-as-a-Service model.  Of course, before you signed the deal and essentially gave part of your IT over to outside hands, you likely studied the service-level agreements (SLA) of potential vendors.  The SLA is a key factor for many companies in choosing which vendor to go with. 

OK, so you’ve carefully validated your SLA terms and it all looks great.  If you have an issue down the road with your vendor and data is lost, you’ll be in good hands according to your SLA, right?  Well, I’m not so sure. 

Let's talk about a real case example. 

Everything works fine for awhile after you move email to one of the biggest SaaS providers in the space.  But Murphy's Law, as it often seems to, rears its head and everything goes wrong on a Friday.  Because of a technical issue on the vendor’s side, you lose all of your company's email.  You look at the bright side, though; it’s Friday afternoon and there is plenty of time to recover.  As some of you might know that from past experience, it normally takes about six to eight hours for email server recovery.  Not so bad, right?  Wrong. 

The first warning sign: the SaaS vendor support says there will be a 72 hour recovery time (for around 500GB). Wow, that's a long time. If the problem resided within your own IT department, you could do this much faster.  OK, now you’re hoping for Monday morning. 

Then Monday comes and you’ve received no information from vendor support because they can’t communicate with the vendor hosting team that’s working on your case.  By Monday afternoon you’ve made several calls to the vendor – still nothing.  Monday evening, you guessed it – nothing.  You're getting crazy – your business needs email!  You're looking every hour to your iPhone hoping for an update...nothing. 

Tuesday morning and you still have no email.  It’s becoming Code Red at your organization – what now? 

Because your data is in the SaaS provider's hands, you can't use your own cached data to recover.  If the vendor cannot do the recovery, you're lost. Period.  Of course there is an option to claim some money because of the SLA violation, but does this really help you? 

Not only is the above scenario a real story, it happened to us very recently at Matrix42.  We're relatively lucky, though; by Tuesday afternoon all email data was recovered and we were on the way back. 

The moral of this story is not that SaaS is bad and that you should avoid it.  The important lesson here is when outsourcing a critical business service, SLAs are only one thing to consider. You should also look at the intangibles; for example, the vendor's reputation, responsiveness and the quality of your relationship.  How high will you rank on their priority list?  You have to be aware that you are relying on someone else's IT infrastructure and processes. 

At the end of the day, moving to an outside provider introduces risk, and you need to make a judgment whether the benefits outweigh the risks.  Go into that decision with both eyes open.