While we know that SaaS adoption in the US is very strong, hitting 74% in 2014, what about in Indonesia? The traditional barriers still loom high, but some positive progress is visible and we can expect Indonesian enterprises to adopt cloud and SaaS much more in the next 5 years.
SaaS is understood to provide cost savings. But these are the traditional barriers, on why CIOs in Indonesia are not yet ready to pay monthly, for software that is hosted on the vendor’s data center.
Lock-in: Enterprises are concern that they will get locked in. The key is to make sure to the vendor that your data can be exported out. If we are talking about locking-in, the traditional software vendors like SAP and Oracle do it best. While you are not paying monthly, you still pay yearly support fees, which is the same thing. The concern is thus, in my opinion, not valid.
Loss of control: Enterprises are afraid because the SaaS vendor is the one controlling the application and the data. What if the SaaS vendor goes bankrupt? What if the SaaS vendor is malicious, stealing your data? The key here is to choose a vendor carefully. Choose a reputable, well-funded vendor.
Security: Even if the SaaS vendor is well-intentioned, what prevents a hacker to steal my data in the cloud? With more business applications need to connect to the internet, even if you put your application on-premise, chances are high that it is accessible online from home, interacting with mobile apps, sending you email notification, etc. That means your on-premise app is also in the ‘cloud’ and is as vulnerable to hacker as the SaaS.
Connectivity: If the internet connection is down, the SaaS cannot be accessed. That is why non-operational-intensive and customer-facing applications, such as eCommerce and CRM are more popular in the cloud. Keeping these kinds of application on-premise could be a lot more expensive, because of the risk to hardware failure, and bandwidth to accommodate users.
Price: Paying a big one-time fee, followed by optional yearly support fees sound cheaper than paying monthly, often on a per-user model. This is true on many occasions however you have to take into account other factors when comparing cloud vs on-premise.
In Indonesia, Sigma has been a very strong SaaS player for decades. It is supplying core banking software in a subscription model to tier-3 banks. While the finance industry is well known to adopt technology faster, this is a positive statement that SaaS has been accepted for decades to run high-profile Enterprise applications. I believe other industries, and other use cases will follow.