This is an excerpt from the August 11, 2006 QuickTake by Dan Everett of Ventana Research.
TakeIn evaluating the SaaS model, Ventana Research recommends that organizations carefully consider security implications, such where the hardware physically is located, who has access to the servers and data, and the impact of these factors on regulatory compliance. Moving to SaaS is not as easy as simply having your BI software hosted; the issues of multiple client tenancy and managing organizations' access to the data and applications can be challenging, as Siebel and more recently SAP learned. Further, we recommend that organizations evaluate how a vendor's SaaS architecture fits with their IT standards and its impact on interoperability with their own internal systems.
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