Thursday, January 29, 2009

Enabling the Inevitable: Selecting Strong SaaS Providers

At ebizQ, where I blog primarily about business intelligence, Andre Yee, senior vice-president for products at Eloqua, blogs about SaaS. He recently posted an entry I recommend to everyone -- "Is SaaS Enterprise-Ready? How to Assess Your SaaS Vendor." In this intelligent and helpful post, Yee recommends that potential SaaS users look at their candidate vendors from several key perspectives, to determine if those vendors have what it takes to support those users' business requirements. Specifically, Yee recommends getting all the information available about:
  • Reliability;
  • Security;
  • Scalability;
  • Business Process Integration;
  • Data Conversion Services; and
  • the ability to pass a SAS 70 Audit. ("SAS 70," according to Wikipedia, "defines the professional standards used by a service auditor to assess the internal controls of a service organization and issue a service auditor’s report." Without getting into too many more details -- yes, it's very, very important.)
I agree that all of these are important criteria, whether the "enterprise" doing the evaluations is large, small, or in-between. However, there are two other criteria that are at least as important as any or all of the above -- and perhaps the most difficult about which to obtain accurate, credible information.

One is interoperability, with other SaaS solutions and with incumbent infrastructures and applications. The other is financial stability.

Of course, interoperability with what's in place seems obvious, but is frequently inadequately addressed by those seeking to implement new solutions, SaaS-based or otherwise. And where SaaS is concerned, interoperability with other SaaS solutions could become critical. If your company decides a particular SaaS solution needs replacing with another, that effort should not require a fleet of forklifts.

Further, if you're betting on a particular SaaS solution and vendor, that bet should be as safe and well-covered as possible. And no company can bet its own competitive agility on any vendor that may not be around long enough to sustain the promised advantages of SaaS.

But "interoperability" is a slippery slope, and many if not most SaaS vendors are privately held, making financial information difficult or impossible to obtain. As the computer in Douglas Adam's incredibly wonderful book "Life, the Universe, and Everything" said, "Hmm...tricky."

One incredibly useful step: find out who's actually providing and managing the SaaS vendor's infrastructure. See if they're working with proven providers and solutions, such as's platform, Google, or's Amazon Web Services, or with specialists such as OpSource or Inforonics. And get as many details as you can about how deep those relationships are, and how stringent and enforceable the relevant service level agreements (SLAs) are as well.

Another is to look closely at every SaaS vendor's partner ecosystem. This not only tells you how broadly supported a vendor and its solutions are by other companies, but also offers clues as to options for an exit or transition strategy, should one become necessary.

Still another good step: make sure your company's own IT infrastructure (and yes, your company does have one, extensive or not) is sufficiently well-managed to be "SaaS-ready." I'm a big fan of for this, because they offer SaaS-based solutions for IT infrastructure management. But any approach you find that enables effective management without making it another full-time job for your company is better than no management at all, a situation I've seen all too often.

SaaS may be inevitable for a lot of businesses, but it's not going to be without challenges for many if not most of them. So, as should be done with every significant business decision, "trust, but verify."

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