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SaaS is a software-as-a-service model that can provide companies a more nimble and cost-effective infrastructure.  The rise of SaaS has made it easy for businesses to adopt the technology without major upfront investments in IT resources or capital expenditures. Although the model is not new, the number of providers over multiple industries has increased dramatically over the past decade, and there are plenty of options available when you’re looking to invest in a new piece of technology. As a buyer, it’s important to keep a few things in mind when you begin your evaluation:  

1.) What’s the big difference? – When it comes to SaaS, the major difference for organizations who make the transition is the access to their data. Instead of VPN’s and virtual consoles that require you to login to a server, everything is available through a web-browser. This is because your software vendor is hosting and maintaining the servers and IT infrastructure for the solution, typically through a relationship with Microsoft or AWS (Amazon Web Services). A byproduct of the vendor owning this part of the solution is the ease of making updates or enhancements to the product.  

What this means for your internal IT teams is they no longer have to allocate resources (hardware and people) to ongoing maintenance of the software. Everything is managed by the vendor and all you need is a computer and an internet connection. This is why SaaS providers offer an annual subscription fee – they provide a complete package of software and services that shifts the costs away from your internal teams. 

2.) Is SaaS Customizable? –  This is a common question for SaaS providers. Often with an on-premise solution, businesses would invest large amounts of capital to fully customize their version of the solution to fit their needs. As upgrades were released, it would take development work from internal IT teams to debug the updates – development work that diverted resources away from other projects. Over time, the business would find themselves locked into an outdated version of the solution, unsupported by their vendor.  

With modern SaaS solutions, this challenge is solved. Vendors have built their products to deliver configurability, ensuring that businesses can tailor the solution to fit their unique needs, while also maintaining a way to deliver seamless updates to the system. This means that buyers can tailor their user-interface (UI), workflows, and data-fields to fit their needs and provide user-specific configuration of dashboarding and accessibility to the system, all without an outsized investment of internal time and resources. In many ways, this goes beyond what many on-premise solutions could offer. 

If you are interested in diving deeper on the technical differences of modern SaaS solutions, we recommend these resources: What is Multi-Tenant software? & What are Microservices? 

3.) Where is my data and who owns it? – It is exceptionally rare that a vendor would insist that they would own your data by using their solution. In the vast majority of service-level-agreements (SLA’s), it will be clearly outlined who owns your data and what contingencies are in place for providing access to it, should anything catastrophic happen to the vendor. Common elements to any SLA are listed below: 

  • How you can export and access your data – Many times, if you have a place to store it locally, vendors will allow you to create a personal backup of your data. Keep in mind that each vendor will have a clearly defined backup process for your data within their hosting agreement, so having an onsite backup is just an additional layer of security for peace of mind. 
  • Support and Uptime Agreements – No vendor is perfect, but some are better than others. Clearly outline what their promises for uptime and support are. 
  • What are your responsibilities – You are creating a partnership with your vendor. Part of that is the shared responsibility of notifying them of issues when they arise. Ensure there is a clearly defined and mutually agreed upon set of requirements for communicating with them about support issues. 
  • What security measures are in place – Not only do you want to own your data, but you don’t want anyone else to have access to it. In every SLA, there should be a section dedicated to security. Check for the different types of certifications (SOC II, Type I/Type II are common in SaaS). Understand what is included in their hosting agreement. For many SaaS vendors, they are hosted on AWS (Amazon Web Services) or Microsoft Azure, each offering a high level of security that is owned by the two cloud service partners.  

4.) Not all SaaS is Created Equal – Now that we’ve covered off on the first three points, it’s important to call out that not all SaaS is created equal. Just because a vendor is “in the cloud”, doesn’t mean they’re a true SaaS provider. Over the last two decades, we’ve seen a proliferation of software technology across every industry imaginable. Newer solutions to the market are building their infrastructure on multi-tenant platforms with microservices to enable product flexibility across each client. Mature vendors that built their platform as a single-tenant, on-premise solution, have been forced to adapt their infrastructure to provide the same flexibility – many simply migrated their on-premise solutions to a hosted environment and started calling it “cloud-based”. This has left buyers with a spectrum of solutions available, and a critical decision to make. 

As a buyer, don’t hesitate to ask your vendor detailed questions about their systems architecture:  

  • Ask if they are “Cloud Native” – If they are not, dig deeper on how their solution was transitioned to the cloud.  
  • Ask about their implementation timelines – One indicator of true SaaS provider, is their agility to deliver value through implementation. 
  • Ask how they price additional functionality and deliver enhancements – True SaaS providers are focused on delivering continuous value through a partnership. One way that they do this, is by offering additional value through functionality enhancements at no additional charge. A rising tide raises all ships. 

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