From time to time we have had a SaaS provider fail to provide his promised services. Usually it's because of a server or software failure. Occasinally it's because of an inability to handle increased volume (scale) or an act of nature (power outage).
Each time, naysayers use that as an occasion to say that SaaS can't work. Perhaps it might be better to use it as a way to look into the failure and figure out a way to evoid it n the future.
SaaS Naysers will enjoy John Dvorak's article on the occasion of the failure of Microsoft's WGA Server, which provides authentication. It took them most of a day to get back in business. Personally, I wouldn't judge the SaaS business on Microsoft's performance -- they are scarcely a seasoned performer here.
But it is good advice to consider where your applications are running in the distant cloud and just how secure the system behind your delightful software might be. Happily, the days when ASPs insisted on running their own (tiny) data centers is over and most SaaS ISVs take advantage of specialists who make sure that the services they provide can keep up and running even when a server goes down or a power outage requires transferring users to a server in another physical location. If the application is criticl to you, asking who and how its infrastucture works is cheap insurance.
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