Recently, I had the opportunity to sit down (on Skype of course) and talk with Jim Raffel, CEO of ColorMetrix Technologies, LLC and a longtime online citizen.
Besides being a heck of a nice guy, Jim is a fount of knowledge about running a business and using the Web to get things done. We covered many subjects which should feed a number of future blog posts (hee-hee), but the one that really caught my attention was when we discussed customer resistance to using online tools.
The Year of The Cloud?
If you’re not familiar with cloud computing or with software-as-a-service (SAAS), no worries! For the sake of this post, you just need to know that I am talking about online software, tools and sites (I will refer to these as “SAAS” from here forward) which you can use to run your business. Examples of SAAS solutions include online tools for accounting, project management, collaboration, mindmapping and much, much more.
I am a huge proponent of SAAS since it offers businesses, especially small businesses, huge advantages such as low cost of ownership as well as the ability to hand all your tech headaches to someone else. In addition, SAAS allows you to actually change the way you do business so you can be more efficient and effective.
Many pundits are calling 2011, “The Year of the Cloud” and I’m pretty happy to sing right along. Not only am I on the bandwagon, I’ve been pulling it myself for years when advising clients, friends and family to get online to do business.
What’s the Catch?
The catch is this: using a SAAS solution means that a business must store proprietary business data online.
This makes many businesses very, very nervous.
Don’t just take my word for it. When I asked Jim about the obstacles he faced the first time his company launched a product which stored user data online, he replied, “Acceptance of storing business data online was one of the biggest obstacles to our success.”
Thanks for the confirmation Jim!
What is it about storing data in the cloud that makes businesses so nervous?
Aside from the the concern that hackers will crack a vendor’s security and steal all of their data, businesses have another primary issue with putting their information online: control.
When looking at a SAAS solution, businesses ask themselves (or should):
- If the vendor goes out of business, what happens to my data?
- If the vendor’s servers crash, is there a backup?
- How often is that backup taken (i.e. will I lose an hour or a day)?
- Where is the backup stored and does the vendor have procedures to get my data loaded somewhere else so I can be up and running again quickly?
- What happens to my data if I choose to move to another vendor? Sure, they may give it to me to load elsewhere, but do they still keep a copy?
- Etc., etc. , etc.
These are all legitimate concerns and the cloud/SAAS model is still young enough to lack precedent for best practices.
Getting around these concerns is a SAAS vendor’s greatest challenge. When I asked Jim how his company broke down resistance he had an interesting reply.
“Yes, it was a sales effort,” said Jim. “But I think that we actually owe a lot of our customer acceptance for online data to Facebook.”
Facebook? Yes, Facebook.
Jim went on, “There is no such thing as true privacy anymore. Everyone and every business has information online whether they placed it there themselves or not. In a large part, Facebook helped break down the barriers to getting online and putting stuff out there for all to see. People now have the mentality, ‘Everyone is going to be there anyway; you just have to get used to it.'”
Jim’s point was well made. Sure, a business still has to be proprietary and he is not encouraging anyone to be free with confidential information, however, the overall fact is: thanks to Facebook, people are more comfortable with living parts of their lives online.
In fact, if SAAS vendors did nothing else to get businesses to use their products, I predict that cloud and SAAS acceptance would still go up. Why?
Because of a simple equation: cost and convenience > risk.
The savings derived from using SAAS solutions, not to mention the convenience of 24-7 availability and access as well as the business-changing processes they enable, far outweigh the real risks of having data online if the proper precautions and approaches are followed.
CYA
In business, as with most things, it comes down to minimizing risk. The way to minimize risk is to assure you cover your ass.
If I went back up to the questions a business should ask when considering a SAAS solution, I could list a dozen ways to assure you are covered in each of those cases.
But I’m not going to, primarily because some folks have already done it so much better than I could have. You’ll find links to their posts below.
Bottom Line
When all is said and done, SAAS and the cloud are here to stay; the value they provide just makes too much sense for business to ignore.
This does not mean that the concerns you may have about your data are not legitimate (never let anyone tell you that they are not!), but with a bit of care, you should be able to reap the rewards with much less risk.
Recommended Reads
Below, you’ll find posts with additional reading on the subject of SAAS and cloud data security.
Are Cloud Security Worries a Thing of the Past? – a good overview of the issue.
SaaS Vendor Negotiating Checklist – Excellent checklist for CYA’ing! Also includes some tough questions to ask (and how to identify the wrong answers!).
Evaluate a Marketplace app’s security – A checklist from Google for evaluating a SAAS vendor.
Nothing Is Too Sensitive for SaaS – Afraid of hackers? You should be more afraid of your employees: “Hackers accounted for less than a quarter of the data lost or stolen last year, according to widely quoted recent survey. It turns out employees accounted for the greatest percentage of incidents.”
AG Customer Bill of Rights – SaaS – Great document which sets forth not only what SAAS vendors owe their customers, but what their customers owe them.
Understanding Software as a Service Security – I love this quote, “The success of online banking, commerce and payroll services clearly shows that online solutions can be safe and secure.” Oh yeah, we already bank online, which deals with something that most of us consider to be our most private and important thing, our money!
The Elephant in the Cloud – How Safe is Your Data?…
Is the cloud secure enough for business? Learn more: The Elephant in the Cloud – How Safe is Your Data?…