Who says that theater is dead? In the IT world, companies are the stage and SaaS vendors the ushers: putting a premium on efficiency, organization, and order. This means customers can be discriminating critics when selecting the SaaS vendor that's right for them. But once you've decided on a SaaS solution, the biggest challenge lies in figuring out what to look for in a SaaS vendor.

SaaS migration may be the most efficiency-driven move that a small or mid-size business (SMB) makes, 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 this SaaS Theater 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 ten suggestions:

1. Dynamic Billing - You should only be billed for what you use. Your company is 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 it defeats one of the primary goals of switching to a SaaS model.

2. Security - Security 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:

• Does the data center that is housing the servers have physical security 24/7?
• Is the perimeter of the data center secured (do guards walk the perimeter at least once per 24 hours)?
• Who has permission to the access these servers (only internal employees or do contractors also have access)?
• Is there a log that captures who came in and when they left? If so then how often are those logs audited?
• Does the application use industry standard 128-bit encryption?
• If multiple customers are housed on the same server then are they logically/physically separated to ensure your data is not viewed by unauthorized eyes?
• Has the staff of the SaaS vendor who has access to your data gone through a criminal background check? It's important to know whether or not convicted felons have access to your sensitive personal data.
• Does the vendor have a formal BCP (Business Continuity Plan)? Is the vendor willing to share it with you and does it satisfy your concerns?

3. 100% Web Based - It is important to select a SaaS partner that offers a 100% web based solution. This means stay away from 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 or just Internet Explorer? 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 having to bother with local installs). Seamless interaction like this means your business continuity won't be hampered.

4. Experience - You want to 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 re-tool 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, more importantly, security. Look for your vendor to have at least 3-5 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 to using a SaaS solution 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 re-training for your staff. This means when new features are deployed they should have a non-intrusive impact on the way you do business as usual.

6. Integration - Is the SaaS solution able to 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 seamlessly 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 questions to ask include, "how often do they test restoring a database?" And, "Is this organization comfortable with restoring large amounts of data in emergency situations?"

8. 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 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 for on-site tours, however, you can always visit their website for a virtual tour and for additional information.

9. Scalability - Scalability 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 is not always the case and your diligent research will be worth the while.

10. Monitoring - It's important to have mechanisms in place that monitor the SaaS system. This critical issue is often overlooked or merely glazed over. Ask if the vendor merely performs "ping tests" or if they have monitoring software that checks the system inside as well as outside of 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 ten 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, but it's important for you to do your work by making sure that they do theirs. Enjoy the show.


Bahan Sadegh is the CEO and co-founder of the Scottsdale-based time and attendance company NETtime Solutions. He has been in the ISV industry for 13 years, 8 of which have been spent developing on-demand software. He is a member of the American Payroll Association and the American Banker's association. Sadegh lectures groups on topics ranging from ongoing innovations in time and attendance to management strategies in on-demand software.