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SaaS vs. Hosted – the debate rages on!

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Cloud computing is gathering momentum in the legal sector – organisations can’t ignore the benefits of low costs and flexibility offered by this technology. From talking to firms, for many the toss up is between Software as a Service (SaaS) and Hosted models of cloud computing. Both cloud computing standards have valid reasons to exist of course, but firms should carefully evaluate the merits of each and suitability to their needs before committing to either model.


Let’s look at the fundamentals.

SaaS systems are based on a ‘multi-tenancy’ environment whereby a single instance of the software runs on a server (which could be located in any jurisdiction in the world) and serves multiple tenants/users.  So by their nature, multi-tenancy systems require the software to be shared across all users of the system, who connect via the same front end, but the embedded business logic allows individuals to see only their own data.  Potentially, there are security and data protection issues to be wary of.  You as a firm are beholden to your software provider for the state of your technology – i.e. the software provider decides when to upgrade the system (regardless of whether the timing is right for your firm) – as the software upgrade is designed to occur for all users simultaneously.

ensure that you always retain the option to change your cloud service provider or even move to an on-premises solution, should the business need arise

On the other hand, Hosted solutions, (also called ‘multi-instance’ architectures), operate software installations individually for each firm, giving each organisation its own instance of software.  You have the choice and flexibility to run on a version of software that’s right for your firm at any point in time.  You can also decide the level of support and business continuity required and as you also ‘own’ the software installation – so you have full control over your data, your documents and their accessibility.  The solution is fully scalable – up or down.  The hosted model is quite simply a method for outsourcing your systems in an externally managed data centre rather than your own.  This for many Professional Services businesses is more acceptable to clients, than the thought of their data being stored in a shared SaaS environment.

Another area worth exploring is the capability offered by both models for offline working

When assessing such solutions, think about the future too.  Ensure that you always retain the option to change your cloud service provider or even move to an on-premises solution, should the business need arise.  This requires determining how you can get access to data and how quickly, which is generally simpler with a hosted solution.Another area worth exploring is the capability offered by both models for offline working. Most hosted solutions enable the system to manage the connectivity, but if a SaaS solution is your preference, ensure you understand from your service provider the options available in the event of the system being unavailable.

There have been some high profile instances recently when SaaS solutions have failed, leaving end users without access to their systems.These are only some of the issues that you should be mindful of.  The crux is – whatever model you chose, ensure that it is the right one for your business, that it is secure and complies with all the statutory data protection regulations and that it offers you the flexibility to easily change course, should you need to in the future.

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