On September 8th, the London Stock Exchange suffered its second black eye in eight years, as a network glitch caused trading to grind to a halt. The system went down about one hour into the trading day, and was only fixed at 4:30 p.m. – leaving only thirty minutes for traders to complete their trades for the day. Adding insult to injury, Monday’s glitch effectively shut out much of the European market from participating in the broad-market rally after the U.S. Treasury Department’s backing of Fannie Mae and Freddie Mac.
Fortunately, European traders had recourse in several new electronic exchanges, such as Chi-x and Turquoise. After imagining huddled masses of traders without their exchange, I took some solace that they had those alternatives (even though they come with their own liquidity issues).
Then I got to thinking: what about other mission critical functions that companies and people have come to rely on? Namely those with systems beyond the control of an IT manager just a four-digit extension away? SaaS comes with its well-documented benefits of low capital costs and more, but what about uptime and reliability? The LSE hiccup isn’t exactly SaaS, but it is an example of a centralized service that is crucial day-to-day going awry.
SaaS darlings, Google and Apple found themselves in the crosshairs when their email services Gmail and MobileMe went down for hours on August 11th. And this was another misstep for Apple, since MobileMe was down for 11 days in July. Steve Jobs meted out his form of justice by canning the executives in charge of the program, but does that allay an IT manager’s concerns?
Seems like those managers are split on their future with SaaS. In an article on InfoWorld those managers who made the move to Google after choosing to leave their established infrastructure were concerned about future hiccups. One manager was especially concerned, as the crash came only days after he had migrated his company completely to Google. Suffice it to say he felt a little foolish. On the other end of the spectrum, the smaller start-ups (with no messy IT systems to divorce) were more than forgiving with Google.
So what’s the point? Regardless of the potential SaaS has for small companies that have never known a complicated IT infrastructure, those companies that make up the old vanguard are still the bulk of the market. SaaS has limitless potential; but with highly-public failures creating doubt in IT managers responsible for adopting these systems, it seems like Google and Apple will have to do more than just satisfy their armchair evangelists, and start appealing to those uneasy decision-makers: those with their fingers on the IT purse-strings.