While very promising to business--and in many cases already successful employed--software as a service (SaaS) currently carries many concerns:

• Extreme dependence on the provider: Since the service only exists while the provider is a viable business, it can be a very tenuous situation. The risk of failure is rather high given the extreme cost involved in starting and sustaining the service.

• Fickle customer base: Generally the companies with a larger userbase will offer a much better product because of more resources, feedback, and higher stakes. Sometimes start-ups will gain a big customer base because they are hot, but this may not have a staying power. Predicting the future commitment is difficult.

• Version changes changes can result in unforeseen training costs and user errors.

• Network connection is required most of the time: Even though the always-online computer is becoming more of the norms, having an internet connection to use the service is still an issue. This is especially true of businesses that require a lot of travel or live in a remote area with unreliable Internet connections. 

• Security is an issue: This is a controversial point, since usually the SaaS organization has much better security experts and resources to deal with security; nevertheless, the concern over someone else having access to and controlling your data is disconcerting. 

• SaaS applications are often less flexible then local software: There may be less features available and the customization of the service limited.

• Organizational rules and legal issues are challenging: There can be inconsistencies with employees using a variety of SaaS providers with varied audiences and collaborators. 

Based on

Gallaugher, J. (2010). Information systems: A manager's guide to harnessing technology. Nyack, NY: Flat World Knowledge.