SaaS Adoption: Risks and Opportunities

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LITERATURE REVIEW

PART ONE: RISKS ASSOCIATED TO SAAS ADOPTION

Drivers of SaaS Adoption

According to Dr. Alexander Benlian and Prof. Dr. Thomas Hess (2009), in their article, “Drivers of SaaS-Adoption - An Empirical Study of Different Application Types”, there are certain factors that serve as drivers of the service. One of the main contributors to such factors is the Transaction Cost Theory (also known as TCT) according to which, factors under consideration for the success of SaaS include: the reason why a firm exists, the number of firms that are playing in the market at that time and the operations of those firms. The “cost of running the system” is the main driver behind the success of SaaS adoption. Additionally, the authors discuss the influence of third parties as critical for the decision process that companies undergo when deciding whether to implement SaaS or not (Benlian & Hess, 2009).

Resource Based View and its significance towards SaaS adoption

Mainly extracted from the work of Penrose (1959), the RVB (Resource Based View) suggests that organizations are merely a combination or a bundle of resources that are distributed across the structure in different proportions and this allows competition in the markets. Therefore, an organization needs valuable and rare resources to be able to compete with others and be different from the rest (Mangiuc, 2009). According to Penrose, “An organization can only differentiate itself from current and potential competitors if some of its resources are valuable, rare, inimitable, and non-substitutable resulting in a unique strategic value”. These resources need not be purely physical in nature although most of them are. For example, the IT hardware, furniture, equipment etc is also a part of such resources and at the same time, non tangible items such as brand equity, operations, routines, software and IT frameworks are also a part of resources. Hence, the competitive position of firms plays a major role in determining the competitive position and stance of organizations (Paquette, Jaeger & Wilson, 2010).

Identifying the security risks associated with governmental use of cloud computing

According to the proposition of Jaeger and Paquette (2010), there are tangible and intangible risks associated with the usage of SaaS and other cloud computing services (Paquette, Jaeger & Wilson, 2010). The intangible risks are also called unknown risks and these are personal, differing from one organization to the other. On the other hand, tangible risks are divided into four:

Risk of Access

Risk of Availability

Risk of Data Integrity

Risk of Exposure to organizational infrastructure

Risks associated to SaaS Adoption

SaaS has been effectively taking ...