The Biggest SaaS Risks That You Need To Be Wary Of

By | August 9, 2019
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Most important risks of SaaS

 

By the end of last year, software-as-a-service (SaaS) tools had started to drive around 50% of the global enterprise applications market. In the 2013-2018 period, the SaaS industry grew by ~125% – clearly underlining the rapid evolution of this sector. However, as more and more organisations (private and public-sector) are shifting to a ‘cloud-first‘ data storage structure, security concerns are also rising. A recent survey found that, compared to 2002, the total volume of data losses has gone up by a jaw-dropping 400% – while things like data/digital identity thefts, DDoS attacks and ransomware have also risen significantly. For the average small-scale business, a single ransomware attack can cause losses of up to $100000. In what follows, we will highlight some key SaaS security concerns and risks:

 

  • Giving over control of sensitive data

    Trust and reliability play big roles in the adoption of any SaaS tool or platform. While the obvious advantage of moving over to cloud services is not having to manually manage and configure data storage – the fact remains that, you need to give the control of sensitive, personal, even business-critical data to the platform vendor. It is the clients’ responsibility to understand the level of customisation that a particular SaaS platform provides – and how it is going to handle sensitive big data. In case something goes wrong and data accessibility/storage is compromised, you need to know how you can get in touch with the vendor and get a response from the team. If registering a service complaint takes a lot of time, that’s yet another problem.

  • Not understanding the data security standards

    Most SaaS providers offer robust data encryption protocols to keep client data secure. The point is, the random Joe who is using a SaaS platform has very little idea about how these protocols work. As such, there are a lot of uncertainties over how business data on the cloud can be restored, recovered or accessed.  The key here lies in ensuring that your software vendor follows a standardised privacy policy, and it rigorously adheres to it. As a SaaS client, the onus is on you to get the hang of how data security standards and encryption methods work. Moreover, the overall performance of a SaaS platform hinges crucially on the reliability of its server. Server-glitches can undermine the performance of a SaaS tool significantly.

  • Non-adherence to the standard uptime commitment

    On average, a SaaS vendor – or any tech vendor for that matter – needs to be available and functional for 99.5% of the time, on a 24x7x365 basis. System maintenance downtimes need to be minimal, and clients need to be informed about them from beforehand. Given the critical nature of the data stored on the cloud, it is only natural that interruption/unavailability of important SaaS features can lead to serious business operational problems. Unless you are very sure about the uptime commitment of a software service provider, nasty surprises might await. The absence of clear and strong service level agreements, or SLAs, can also prove to be problematic in the long-run.

  • The lack of transparency

    For SaaS solution providers, this one is a double-edged sword. They cannot, of course, divulge too much client info, since that would violate the required data security standards. However, this might make the vendors come across as ‘overly secretive’ about their operations – particularly if not much information about the security protocols is forthcoming either. Clients might have many of their data security-related questions unanswered – and that, in turn, creates an air of distrust, speculations and wild guesses. It’s a fine line between being protective of client data and being an absolute ‘black box’ – and vendors need to maintain the right balance.

  • Not understanding the different layers of risk

    Different types of risks, and consequent problems, can result from improper usage of cloud services. For starters, a business can invest big for storing non-sensitive, non-critical data on a SaaS framework (which will be a waste of resources). If you are not careful enough while choosing your SaaS vendor, day-to-day operational problems can set you back. There is a series of SaaS application risks as well – right from authorisation and authentication, to serious vulnerabilities and faulty access provisioning features – that need to be examined and resolved. Finally, there are the general data security risks. Clients should know exactly how their data is being handled and kept safe.

  • Threats of identity theft

    Arguably, the biggest SaaS risk at the current point in time. In any cloud service platform, the identity management for clients is handled from either the LDAP (lightweight directory access protocol) directories, or the company firewall, or the website of the SaaS vendor. Security loopholes at any of these points can lead to unauthorised data access and digital identity theft. In order to keep these risks at an arm’s length, additional security software is often required – which requires extra service payments. For all of its burgeoning popularity, SaaS is still a relatively new technology – and hopefully, these threats will be minimised over the next few years or so.

  • Risks related to data access

    When you hire the services of a SaaS vendor, you share your personal business information to a third-party entity (the vendor) for security storage. But, do you really know who might be able to access this data? In a bid to cut corners, if you decide to work with a cheap and unreliable software vendor – you open yourself up for probable manipulation, corruption or even deletion of your mission-critical data. What’s more, your data might be sold to external parties, or even leaked to your competitors. This brings to light the importance of carefully checking and re-checking the policies of SaaS vendors. Unless you have a proper idea about the technical side, you will always need to worry about your data getting hacked.

  • Non-compliance with the latest industry regulations

    Before partnering with any particular SaaS service provider, clients need to be very clear about two particular things. Firstly, users have to be sure that all possibilities of data breaches/manipulations/service denials are being handled by the platform. You also need to find out whether the platform complies with all the latest big data protection and storage regulations. Negligence on these count may very well land you in serious legal hassles later, and your data may even get confiscated. Avoid hiring any tech service provider that seems unwilling to disclose its service policies.

  • Financial risks 

    Vendor lock-ins are something that SaaS clients across the world are increasingly worrying about. Many software vendors demand long-term or upfront payments – and we are talking about big money here. Even if a client is not sure about whether it would use the service for a significant period of time, the money gets stuck (particularly if advance annual payments have to be made). Once you get into a contract with a SaaS vendor and make the initial investments – you can do very little, even if security glitches emerge, there are problems with the encryption methods, and data compromises happen. The security standards, and quality of service (QoS) can be modified over time – but the payments remain locked in. That’s precisely why you should never collaborate with a SaaS vendor with low credibility.

  • Outdated data security standards

    At a time when data storage and protection standards are evolving rapidly, many SaaS vendors are still stuck with old and vulnerable security standards. Since the service quality of these software companies are not mature (read: improved with time), problems are more than likely to emerge in the long-run, and serious data losses might happen. In case you get into a contract with such a SaaS vendor – the problems are further compounded, since your payments are locked-in. Be very particular while checking whether a SaaS provider indeed uses updated software and high-performance, fully reliable servers. Otherwise, you will be inviting trouble.

  • Uncertainties over the location of data

    In order to protect data integrity and prevent unauthorised access, SaaS providers typically do not publicly mention their data centers. This ‘secrecy’ can lead to further uncertainties – since clients have no idea about how and where their data is being handled and stored. As and when required, client data might have to be moved from one data center to another – and manipulations/losses can occur during this transit over cloud networks. There are also certain country-based regulations on where and when data can be accessed. The client is often not aware of how his/her data is being handled and whether there are any risks.

  • Doubts related to Terms of Use

    Hardly anyone has the patience to read through long pages of terms and conditions, that are listed on the websites of SaaS vendors. All that people do is quickly scroll to the bottom, and agree to these clauses. By doing so, they actually agree to certain things that they do not understand - and in many cases, a random client is unable to understand the technical jargons on these pages. As a result, when complications and conflicts of interest occur later on, these clients have no idea what to do – since they had already agreed to the vendor’s terms earlier. It is impossible to over-emphasise the importance of going through the terms & conditions of a SaaS vendor, clarify your queries, and then avail its service.

  • Stability of the platform

    The global SaaS industry is growing all the time, and it is fiercely competitive. In a scenario where every SaaS provider is striving to stay a step ahead of the competition, some vendors will lag behind. Over a period of time, if the losses mount up and there are no changes in fortunes, a vendor might even be forced to shut down. Clients of that vendor have to face significant monetary and data security risks – apart from the general unpredictability – in such situations. At the time of signing up on a cloud platform, no one thinks of what might happen if the platform shuts down – but it’s a very real possibility. To stay prepared, you need to check the policies of the vendor well in advance.

 

With the help of a solid SaaS platform, clients can reach new customers, manage data more efficiently, and take their day-to-day operations to the next level. SaaS also facilitates greater scalability and faster deployment – which are both big advantages. However, since the technology is still fairly new, you need to tread with care, stay informed, and be careful while choosing a SaaS vendor. Avoid the risks discussed over here, and use SaaS in the best possible manner.

Hussain Fakhruddin
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Hussain Fakhruddin

Hussain Fakhruddin is the founder/CEO of Teknowledge mobile apps company. He heads a large team of app developers, and has overseen the creation of nearly 600 applications. Apart from app development, his interests include reading, traveling and online blogging.
Hussain Fakhruddin
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