How to choose a SaaS vendor

A SaaS vendor owns, hosts, manages and updates the software and hardware so that the customer doesn't spend valuable resources implementing or managing software applications. Instead they rely on the SaaS provider to keep the service up-to-date and available. With so much reliance on the vendor it is vital that, as a customer, the right decision is made when choosing the vendor.

This guide is designed to help raise awareness of the different aspects of a SaaS vendor and provide you with possible questions to ask a vendor to ensure your company gets the right software to complement your business.

What to look for in a SaaS vendor

The speed and reliability of your host’s servers will depend on several factors, including the quality of their connection to the internet, bandwidth, and the availability of back-up systems in case things go wrong. Here’s a checklist of points to consider when checking out your prospective host’s servers and hardware:

It is vital that a SaaS vendor can offer the qualities that will have a direct effect on your business operations. This section will show some of the different qualities that vendors should offer matching your business needs:

• Service Level Agreements
  A service level agreement is defined a minimum performance measure at which the service delivered is considered acceptable. This means that the vendor must keep to the performance level offered to the customer. As SaaS is an online service it is vital that the vendor is always available to ensure your data is accessible. Try to make sure that your chosen vendor is offering 99.99 percent uptime for their applications. It is also a good practice to find out what compensation will be offered if the agreement is broken.


• Compatibility with Existing Software and Skills
  Is your host’s server, software and support services compatible will the skills and software that you (or your design team) are using? If, for instance, you are used to working in a Unix environment, then it probably makes little sense to choose an NT host.
  
  
• Industry Experience and Expertise
  The SaaS vendor needs to understand it’s target market making sure that they are continually developing their software to compete with the ever changing industries. It is also vital that they have experience in offering remote software hosting. A good way to see a company’s credentials is by carefully reading through testimonials from current customers.
  
  
• Cost Effective and Easy-To-Use Solutions
  The vendor's software solution should be an easy to use system that multiple users can quickly learn in order to increase the productivity of a business. The solution shouldn’t require additional IT staff or infrastructure and the service plan should be tailored to your companies needs offering an affordable option with service plan structures that suit your requirements.
  
  

What are the key benefits a vendor can offer?

Using SaaS is ideal for a business that wants a specialised piece of software that can be used remotely by multiple users. This section is going to show some of the many benefits that a vendor can offer to a business by using SaaS:

• Reduced Cost
  Customers pay for SaaS on a subscription or per-use basis, which simplifies budget planning, reduces upfront costs, makes payments more predictable, and lowers the total cost of ownership. This also means that the customer does not have to estimate the number of licenses required, nor install and pay for full licenses that may only be used by some employees occasionally. This hosted application model also allows smaller organizations and sole trader’s access to applications written using advanced software development tools utilizing sophisticated database technology and high-end servers. The capital investment of the hardware and software as well as the security, backup and server maintenance cost are all the responsibility of the vendor.
  
  
• Remote Access
  As the application software and the data is stored on the vendors server it can accessed from anywhere in the world as long as they have access to the Internet and a compatible browser. This allows the customer to work in an office environment regardless of where they are physically. Customers can work remotely from their home or hotel or any other location without the need to download their work or synchronize with portable devices.
  
  
• Low Maintenance
  Maintenance is kept to a minimum for the customer as the vendor takes all responsibility for the hardware and software. The only responsibility for the client is to maintain continuous access to the Internet. As there is no software to download a hosted application can be made instantly available across an entire organization even when the organization has multiple regional and international offices. This also means that valuable time and resources are saved as periodic updates are completely eliminated.
  
  
• Minimal Risk
  Many hosted applications require no long term commitment from their customers. Often new customers are offered a test period, including a free introduction offer which can be taken with minimal risk using a Pay-As-You-Go model. If after trialling the hosted application the customer finds it unsuitable then they can simply stop using the service.
  
  
• Integration
  Integration of the new software couldn’t be simpler. The hosted application will provide an integrated solution to any system that supports a standard Internet browser including Windows, Unix and Macs. This means that all a user needs to be able to access the new software is a compatible internet browser.
  
  
• Support
  The support for SaaS software is far more efficient than regular software. As the software is held on the vendor’s servers they can make developments on site and release updates that the end user will benefit from without having to do anything. This means a company does not have to wait for updates and in some cases can even request a new feature in the morning that can be developed, tested and deployed globally by the afternoon.
  
  

The Key Questions to Ask

As with any business choices there are many questions that need to be answered before a informed decision can be made. Signing up with a SaaS provider is no different and as there is a wide choice of vendors it is vital you make the right decision for your business. The following questions are some of the issues that you should consider discussing with you potential vendors.

Who are the vendors existing customers?

It is important to check the credentials of a vendor. Finding out how many customers they currently have and the size of these customers can be a good way to gauge the experience of the vendor. Another way of finding this information is by looking at their testimonials.

Is the vendor financial sound?

It is vital that your data is always going to be available. If a vendor is at risk due to being financially unsound then your data could also be at risk of being unavailable when you need it. Good ways of determining how financially sound they are is by looking at how long they have been in the business and also investigating what other forms of revenue streams they have.

What is the service renewal rate?

This can be broken down into two sections:

• The first part is to see how much it will cost you to keep your subscription to their service and will the rates remain the same as the initial deal made. It is important to know that your costs won’t exaggerate in the future.
• The second part is to find out what their current repeat subscription rate is with their current customers. A good way to gauge their service is by analysing how many repeat subscriptions they have each cycle.

What are the vendors training programs?

Comprehensive training is critical for any new application to be a successful. You need to fully understand what support the vendor will provide to get your staff up to speed with the new service. At this stage you also need to get a clear idea of any additional costs for this training.

Is there a clear presence of customer support?

To make the transition to a SaaS application painless it is important that the vendor has a complete customer support package to offer. Depending on the needs of your organisation this may include having support staff local to your business, or at least support staff that are accessible during your working hours (especially important if your company is global). The support must fully understand the software and have the ability to solve any issues to a wide variety of people, not just I.T experts. The importance here is making sure that the vendor treats your company with the same importance that you do.

Can the vendor perform to the agreed service level?

As the data is stored on the vendors servers it is vital that they always keep the data available to you. The service level agreement is the minimum performance that the vendor should perform to. You need to know what they actually promise, how realistic these promises are and what the penalties are if they do not keep to the agreed level of service.

What are the integration capabilities?

From the outset you need to know what is it going to take to integrate the SaaS software with the rest of your environment and how it will work with your existing systems. This is important as you need to know how much support you will have in getting the systems working together.

What are the options to customise the SaaS application?

To make sure the application functions to your needs it may need to be optimised. This can be vital for the software to be a success in your business environment. The vendor must be asked what sort of options they offer and at what cost.

When and how often if the application Updated?

Technologies are constantly changing and you need to make sure that you will not be stuck with a static piece of software that can’t adapt to these changes. Therefore you need to know how often the software is likely to be updated and what sorts of things can be modified. Another key point to discuss is the process that will take place when you have a suggestion.