Cloud computing has evolved from a modular point solution in the form of single-purpose Software as a Service (SaaS) applications, e.g., expense management, into an increasingly popular platform for a broad range of business applications. But the rapid adoption of SaaS based on cloud computing has outpaced the ability of management processes, standards and best practices to accurately size the associated IT and business risks. As a result, many cloud buyers are unwittingly making poor tradeoffs between cost savings, flexibility and risk.
Buyers need to understand that running business applications on cloud services -- which for the purposes of this report refers only to SaaS, not Platform as a Service (PaaS) or Infrastructure as a Service (IaaS) cloud offerings -- entails new IT security and business risks, notably around data privacy, compliance and reliability. Some of these differences arise from cloud provider business models and how those drive the structure of contracts and service-level agreements (SLAs). Others are inherent in the technology underlying these services. HfS Research examines several critical issues that buyers should keep top-of-mind as they plan any transition from in-house services or traditional IT outsourcing to cloud services.
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