The other user guide: 10 questions to ask a SaaS vendor

Migrating to Software-as-a-Service (SaaS) may be the most efficiency-driven move that a small or midsize business (SMB) can make, but it's easy to stumble in the SaaS arena because some vendors still use methods that keep SMBs tethered. You can pick the best fit for your SaaS needs with simple research, and by following these 10 suggestions.<br/>

11/18/2008


Migrating to a Software-as-a-Service (SaaS)-based solution may be the most efficiency-driven move that a small or midsize business (SMB) can make, but it will only pay dividends if you choose the solution that sticks to modern SaaS principles.
It’s easy to stumble and fall in the SaaS arena because some vendors still use methods that keep SMBs tethered. You can pick the best fit for your SaaS needs with simple research and by following these 10 suggestions.
1. Dynamic billing. You should only be billed for what you use. Companies are dynamic: Some months business goes up and some months it goes down. If your usage fluctuates, then your SaaS bills should follow suit. This is especially important in seasonal industries like retail or hospitality. Also, never agree to “software maintenance fees” or to pre-established “user licenses” because they defeat one of the primary goals of switching to a SaaS model.
2. Security. This is paramount: Most companies simply ask if the SaaS vendor uses SSL, but security is so much more than that. Ask your potential SaaS vendor these questions:
• Does the data center that is housing the servers have physical security 24/7?
• Is the perimeter of the data center secured—i.e., do guards walk the perimeter at least once per 24 hours?
• Who has permission to access these servers? Is it only internal employees, or do contractors also have access?
• Is there a log that captures who came in and when they left? If so, how often are those logs audited?
• Does the application use industry-standard 128-bit encryption?
• If multiple customers are housed on the same server, are they logically/physically separated to ensure your data is not viewed by unauthorized eyes?
• Does SaaS vendor’s staff have access to your data, and if so, have they gone through a criminal background check?
• Does the vendor have a formal Business Continuity Plan? Is the vendor willing to share it with you, and does it satisfy your concerns?
3. 100-percent Web-based. It is important to select a SaaS partner that offers a 100-percent Web-based solution. This means avoiding vendors that require an application to be installed on your computer. Maintaining client-side software eliminates one of the largest benefits of having a Web-based application. Also ask if the SaaS application runs on all browsers. True SaaS offerings will run on any platform and on any Web browser. With the proliferation of browsers like FireFox, Safari, and Chrome, you want to be certain that if your computer crashes, you can access the application in no time on a new machine—without bothering with local installs. Seamless interaction like this means your business continuity won’t be hampered.
4. Experience. You must be certain your SaaS vendor is experienced in both the execution of the application as well as the hosting of the application. Many software companies try to “Webify” their existing client/server application and start hosting. That means they will heavily retool traditional software offerings and brand them as SaaS. This is reactive software development—not proactive—and it typically does not address issues of scalability or security. Look for your vendor to have at least three to five years of experience in hosting the application to avoid some of the issues that come with being an early adopter.
5. Upgrades. One of the key advantages of SaaS is the ability to receive automated upgrades. The upgrades ensure that you are always on the latest version and using the most current functionality. Typically these upgrades should not cost you anything, and they should never require retraining for your staff. This means when new features are deployed they should be non-intrusive to doing business as usual.
6. Integration. Will the SaaS solution integrate with your existing software? The service should give you the ability to transfer data in and out of the software by using multiple methods like file-based (Excel file or .csv file format) or by using Web services to exchange data with your on-premise software applications.
7. Backup. Your data is essential, period. Having the proper backup is crucial when selecting a SaaS vendor. At the very minimum you want nightly backups performed in addition to weekly off-site backups. Other issues to address include how often they test for restoring a database, and if the organization is comfortable with restoring large amounts of data in emergency situations.
8. Define the data center. Determine who is hosting the solution. Some vendors will host the software in-house and others have hosting agreements with third parties—called either managed-serviced or co-location. Research the data center that the vendor uses to host the SaaS solution. It is preferred that the data center has undergone a SAS 70 Type II audit. Ask the vendor to provide you with a copy of the SAS 70 auditor’s report. In addition, you want to be certain that the data center uses an N+1 configuration; meaning every system has at least one independent backup to ensure availability in the event of system failure. Many data centers do not allow onsite tours; however, you can always visit their Web site for a virtual tour.
9. Scalability. This is the lifelong partner of experience. Your SaaS vendor needs to prove that it can grow with your company, as its needs grow. Ask the vendor about their largest customers. Will your needs go beyond their current largest customer? Would the vendor need any special provisions to accommodate your potential growth? What are their growth plans? An assumption is that all SaaS vendors will grow with your business, but that isn’t always the case and your diligent research will be worthwhile.
10. Monitoring. It’s important to have mechanisms in place that monitor the SaaS system. This critical issue often is overlooked or merely glazed over. Ask if the vendor simply performs “ping tests” or if they have monitoring software that checks the system inside as well as outside the firewall. After all, even if servers are running perfectly inside the firewall, users won’t be able to access the system externally if the firewall or routing settings are off.
Once you have a SaaS vendor secured and you’ve established a working relationship, it would be wise to maintain a bi-annual review of your service and ensure that, at a minimum, your vendor thoroughly covers these 10 items. SaaS will continue to revolutionize the business landscape. SaaS vendors will continue to compete for your business on this global stage and that means your company deserves a performance worthy of an encore. It’s important for you to do your work by ensuring they do theirs. Enjoy the show.
About the author:


Bahan Sadegh is CEO and cofounder of Scottsdale, Ariz.-based NETtime Solutions , a time & attendance applications provider. He has been in the software industry for 13 years, eight of which have been spent developing on-demand software.





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