Software as a Service (SaaS) is one of the biggest changes in technology in the past decade. It fundamentally shifts what the vendor provides from a product to a service. With SaaS, the vendor is responsible for physically hosting the software, managing software updates, disaster recovery and in some cases data acquisition. The software resides in a data center and the client accesses the software via a web browser (via “The Cloud”). Most vendors offer multiple flavors of their product including vendor hosted, private cloud and client hosted. It’s important to understand the benefits and drawbacks each hosting arrangement might offer your firm.
SaaS offers many benefits to family offices and business management firms. You do not need to invest in expensive hardware or manage software updates and you have access to the product from anywhere. SaaS is an “on–demand” service versus a product and should be evaluated as such. This requires going deeper than a demo and understanding the details of Service Level Agreements in terms of system availability and disaster recovery. Additionally, you should review the reporting your vendor can provide to prove they have the proper controls in place.