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Reading this post in Zdnet on problems with Gmail hosting got me thinking about cloud based services.

I have always been very doubtful about the web based office application thingy. Why? Well two major problems areas for me:
1. Security of my docs. I am not comfortable with having to have all my docs created online and with maybe copies lying somewhere on the cloud.
2. What if I want to create a doc when I don't have internet connectivity?

Well now I also see service availablity as a major problem. What if I need to get a doc out to a customer tomm morning and my service provider locks me out or they are down due to technical reasons?

If you want to go ahead and use a SAAS provider for business I would recommend you atleast consider the following:

1. Dont go for free for business ever. Initial costs maybe less, but SAAS means you depend on the service provider for your business. So free is not always good for SAAS.
2. What kind of support/QOS do they offer? I think in some of the Live for business offerings MS actually promises(in the contract, so it is legally binding) a 99.99% uptime or something like that.
3. Make sure that your provider is really commited to the service long-term? I think one of the points people seem to say in the above article is that Google is not really commited to the service as something that will make or break their business.
4. Make sure you have fallback plans
5. And don't cloud a service that is core to your business.