SaaS (Software as a Service) has changed the landscape for both end users and vendors and leveled the playing field in a big way. However, like every other technology, there are challenges and pitfalls associated with using SaaS as a delivery channel for apps and other services. While SaaS provides businesses of all sizes a cost-effective alternative to buying and maintaining their own infrastructure, it’s still important to consider the risks and challenges associated with SaaS before making the final transition.

Moving to cloud computing is considered as a sign that a business is willing to keep up with technology. However, despite all the advancements, the technology is still considered somewhat new. Since businesses have to rely on 3rd party vendors for delivery of mission critical services, things are not always completely in control of the end user. Let’s start with some important challenges associated with using and implementing SaaS, especially in a hybrid IT infrastructure.

We have already covered the benefits and challenges of using SaaS solutions in detail so you might also want to have a look at that post.

SaaS Challenges and Pitfalls

Integration Issues

Inadequate integration can result in a variety of issues such as accounting or sales data not syncing with the CRM. Since users keep making changes and uploading files in different systems, things can go wrong if the data isn’t updated properly across all systems. For example, billing errors can occur and the system might start sending invoices to the wrong recipients.

Hybrid Infrastructure

On-premises software and SaaS solutions sometimes don’t go well together. Integrating the existing on-premises software with cloud-based solutions can become a challenge for businesses and negate the benefits associated with using a hybrid technology. The service provider and the IT staff need to work together closely to ensure a seamless cloud integration.

Although many SaaS providers offers integration services, IT managers should take necessary steps to ensure seamless integration with their existing systems. A cloud consulting firm can be of great help if the solution provider does not provide integration services or if the IT team finds it hard to integrate on their own.

Integration Cost

Integration requires highly skilled professionals who might not be part of every IT team. This can raise the implementation cost as SaaS integration cost can be quite high. Businesses may need to hire external resources such as Integration as a Service companies. The best strategy to cut integration costs is to select a solution that offers seamless integration with all the systems a business is using and preferably comes with an open API.

Access Control

Access control is another challenge businesses face when transitioning into the cloud. That’s mainly because the monitoring settings and access control does not always carry forward smoothly from traditional software to a SaaS solution. Admins need to have complete control over who can access what, but they might be unaware of access at times, especially during the transition phase.

Time Constraints

Moving from on-premises to cloud can take time, which can affect business operations and ultimately revenue. Businesses transitioning into the cloud are usually in a rush to get their apps and services up and running. Work can get delayed during this phase therefore, businesses need to plan carefully to avoid any service interruptions.

SaaS Pollution or Saturation

Too much choice can be mentally taxing for the IT staff and makes it difficult to choose the right solution according to business requirements. There are thousands of SaaS providers and each claims their solutions to be the best. For example, in the team collaboration category alone there are more than 300 products from known vendors. Even the most niche solutions have stiff competition, which itself is not a bad thing but can make it difficult to find the right solution.

It’s not practically possible for the IT team to sign up for each solution and try it out before making a final decision. That’s when review sites can be of great help and focusing on reviews can make the decision a lot easier. Around 95% customers read online reviews before making the final decision, which is a compelling statistic for businesses to invest time in reading trusted software reviews.


Although many SaaS providers claim to offer all-in-one solutions, the reality is that most of SaaS solutions only excel at one or two things. Businesses often have to use multiple solutions for different purposes, which leads to hyper-specialization (related to saturation). Integration capabilities can bridge the gap between different systems so businesses need to make sure the solutions they plan on using play well with each other.

Choosing the Subscription Plan and Pricing

Although a monthly plan seems like the most cost-effective option, it can actually be more expensive in the long run. Then there is the issue of hidden costs and fees associated with subscriptions, which might not be obvious in the beginning, but can add to the total cost. This pitfall can be easily avoided by properly identifying business needs and matching them with what the provider has to offer.

A business that plans to use a solution for more than a year would be better off paying for an annual subscription, while monthly subscriptions are more suitable for businesses who need more time to figure out what works best for them. You might also want to have a look at our guide to SaaS pricing models for more details.

Not Giving Proper Attention to the SLA

An SLA (Service Level Agreement) defines what to expect from the provider and how to proceed if something goes wrong. Not knowing what you have agreed to can lead to various issues and affect the vendor-client relationship in the long run. Businesses need to ensure that the SLA meets their specific requirements and everything written in the agreement is clearly understood by both parties. Here is the link to our easy-to-understand guide to SLAs.

Data Security

This is one of the biggest challenge businesses face when transitioning to cloud-based services. Research shows that nearly 60% people use the same password for most of their accounts, while many use passwords that are too easy to guess such as 123456. This means if a provider gets hacked, chances are good that the hackers will also gain access to other accounts of a customer.

This makes security a serious challenge all businesses have to overcome to safeguard their valuable data. Different security measures businesses can take in this regard include using 2-factor authentication (at least for employees who have access to sensitive data) and encryption of both data storage and transmission.

Reputable SaaS providers such as Microsoft Azure and Amazon Web services might cost more than run-of-the-mill providers, but the benefits from a security perspective are worth the extra price. That’s the main reason more than 70% share of the public cloud market belongs to these two providers alone.


With global revenues expected to reach $278 billion by 2022 (Gartner), SaaS is expected to continue flourishing despite the challenges businesses face during implementation. However, most of these challenges can be overcome to a great extent by doing thorough research, carrying out integration properly, understanding business requirements, and carefully selecting the provider. Implementation and transitioning become easier and less of a hassle with a reliable and reputable service provider, which is perhaps the most important factor to consider when putting your data into the cloud.

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