The Software-as-a-Service (SaaS) delivery model is receiving significant attention as a surefire way to cut software acquisition and maintenance costs. Although SaaS can save enterprises money, SaaS solutions come with hidden fees, such as setup, training, and additional storage costs. The unsuspecting CIO can blow the budget if he or she is unaware of these extra costs.

SaaS – Sometimes More Sizzle Than Steak

Current industry buzz and vendors insist that SaaS is cheaper than either acquiring commercial off-the-shelf (COTS) software or building an in-house solution. This is a dangerous generalization. Typically, SaaS is a good idea that will, in some circumstances, save enterprises money. However, C-level executives that blindly adopt this delivery mechanism will invariably find themselves on the losing end of the deal.

In addition to being a software delivery mechanism, SaaS is also a form of software licensing. As with all licensing structures, there is no one-size-fits-all solution. This means...