We are now moving from the out of the early adopter stage and into the early majority stage of the Software as a Service (SaaS) technology adoption cycle. An exploding number of organizations are considering SaaS to take advantage of the lower up-front costs, lower total ownership costs, and faster implementation when compared with traditional licensed software. While evaluations of traditionally licensed software by organization is a well understood activity, the relative youth of the SaaS market means many organizations are still developing their evaluation methodologies, while others have suffered through SaaS horror stories.
Because of the unique requirements for delivering Software as a Service as opposed to deploying a system behind the corporate firewall, a mature SaaS solution should be evaluated against different factors and criteria. Ten of these factors are:
- Subscription Management – The ability to manage your subscription by adding features, increasing the number of seats, changing payment methods. Is this available through an online interface or do you have to talk with an account representative? Mature SaaS solutions generally provide an interface for this to reap the lower support costs.
- SLAs (availability, performance, scalability) – Providing some Service Level Agreements (SLA) for availability, performance and scalability are very important. You will be at the mercy of the SaaS provider, with SLAs that could materially impact your business and leave you with no recourse. Mature providers know this and are willing to provide assurances.
- Data import/export – While the service provided by a SaaS solution is the main value, often the data accumulated has a large value as well. The ability to get data into the system and out of the system is in important consideration. This is also important to prevent vendor lock-in, especially given the relative immaturity of the SaaS market.
- Integration – While the service provide by the SaaS solution can be compelling, it is usually only a small part of the overall business process for an organization. The ability to integrate the SaaS solution with other enterprise systems either behind the firewall or in the cloud can be critical to realizing the long term ROI goals of a SaaS solution.
- Configuration/Customization – SaaS solutions provide a standard set of out-of-the-box functionality. Most organizations will not mesh directly with the standard feature set. The ability to configure and customize the solution can be the difference between a successful adoption by the organization and another piece of shelfware in the cloud.
- Delegated user administration – Once an organization subscribes to a SaaS solution they should have complete control over the administration of their users. For large scale adoption, greater than a few dozen users, the ability to delegate user administration to different areas of the customer organization is critical to being able to manage and roll out the software. The SaaS solution should provide a complete set of capabilities for user management. Relying on the SaaS provider’s support for user administration is another sign of an immature SaaS product.
- Security – Closely related to the user administration is the security administration. Being forced to follow a set security model (e.g. a fixed set of roles and permissions) will inevitably lead to frustration. While the security model of the solution is fixed, organization differences require security customization to lie in the hands of the SaaS customer.
- Reporting – In order to manage and integrate the SaaS solution into the larger business process, reports are often crucial. Unlike COTS products, you do not have the option of rolling out your own reporting system for a SaaS solution. A mature SaaS solution typically has a flexible reporting engine, a comprehensive set of standard reports and the ability to customize and run ad-hoc reports as well.
- Monitoring – Given the pay for usage model of SaaS, monitoring capabilities are important. Can you track the availability of the solution? Do you know when you exceed your current pricing tier and can expect a larger monthly bill? Can you track the usage of your users day-by-day, hour-by-hour? These are all important capabilities for managing the SaaS solution to insure success and a positive ROI.
- Business viability – The viability of the vendor is also important. If a COTS vendor goes out of business, then you may not receive updates or upgrades to your product, but you can continue to do business and plan for a transition to a new solution. With SaaS, when the vendor goes out of business you may be left high and dry. Can your company survive if a critical business process is unavailable for a month or two unexpectedly? The quality of the business can be as important as the quality of the solution when choosing a SaaS solution.
As companies contemplate SaaS solutions they need to look beyond the functionality provided to some of the unique issues with the SaaS model. While SaaS has some compelling advantages compared to the traditional COTS product or custom development, it also has its own set of “gotchas.” Don’t be another SaaS horror story, pick your solution with care and consider all the factors.