What you should ask about Software as a Service (SaaS)

1st August, 2016

There’s a lot of confusion and misinformation about Software as a Service, or ‘SaaS’ – but it’s worth taking the time to understand what it is, and whether it might be right for your business.

When you decide to subscribe to a bundle of services there’s a lot more you need to think about in choosing one piece of software over the other.

Whether the software functions in a way that suits your business is obviously the number one, most critical factor – but other, less obvious, considerations could have massive impacts on your business down the track.

Some key things to know

SaaS isn’t cloud, and vice versa

Software as a Service is so often hosted in the cloud, people often assume that cloud hosting and SaaS are one and the same.

SaaS is a bundle of services

Included in your SaaS subscription is access to the software, of course, along with the hosting, security, upgrades and maintenance.

This means your regular subscription fee covers both the software and its deployment with minimal upfront costs.

You can cloud host software without having it on subscription

There are a large number of companies that buy a software licence and then have it hosted in a public or private cloud.

The difference is that you pay for your hosting separately to your software and you generally have to pick up costs for maintenance, upgrades, security and any other features separately as well.

Both can be good and effective options; it just depends on what you’re looking for.

Single tenant or multi-tenant cloud hosting

SaaS is generally delivered in one of two ways – single or multi-tenant cloud hosting.

Think of the cloud as a big building full of dwelling spaces, with your all-important SaaS in one of those dwellings.

If it’s a high-end building for single tenants, you’ll be renting a self-contained apartment that you can furnish and decorate to your own taste.

You have full control of all the functions – cleaning, water, power, security – you can decorate it how you like, renovate when you want to, even add connecting doors to another apartment. When you leave that apartment, you take all your possessions with you.

With single-tenant hosting you have far more control, flexibility, security and service – and you also have complete control over your own data.

A multi-tenant building – or multi-tenant hosting situation – is a different story.

Imagine living in a hostel or backpacker’s – cheap generic furniture and institutional green paint on every wall.

Someone else hogs the hot water and uses all the soap in the shared bathroom, and there’s no lock on the door.

On the upside, it’s much cheaper, while still delivering on the basics.

Both hosting options have upsides and downsides – and to be fair there are some good multi-tenant systems and some pretty dodgy single tenant systems.

You need to shop around and think about the degree of control and flexibility your business needs now and in the future.

Your ideal SaaS situation could be either single or multi-tenant – the trick is knowing what you’re signing up for. Here are four key questions you really should be asking:

1. Will it scale with my business?

Flexibility is critical. A quality SaaS solution should scale with your business, whether you are increasing or decreasing.

2. What will it cost up front?

There are usually no up-front costs with a SaaS subscription, but many providers ask for an initial subscription deposit. Some can require 12 or even 36 months’.

Be aware that the advertised monthly subscription fee is unlikely to be the total of your first payment and be sure you understand how the subscription is structured

3. Who owns my data?

Whether it’s multi-tenant or single tenant, it is important to determine that you legally have ownership of your data and can retrieve it at any time.

There is usually a cost involved in downloading and delivering the data to you but there should be no issue over you doing this at any point in your relationship with the provider.

4. Is it fast and consistently available?

It’s worth asking how up-to-date the technology is before you sign up with a SaaS provider.

Brand new startups may not have everything you need, and creaky old companies might still be working with out-of-date infrastructure.

Ask about down time and outages, and make sure that you understand how fast your system will run.

Make sure you’re future-proof

The bottom line in all of this is making sure you’re going to get the functionality you need to grow your business not just today but in the foreseeable future.

If the software is delivered as a service-based (SaaS) solution then what it is does is still the most critical factor, how it is delivered shouldn’t impact on your ERP software’s functionality or performance.

You shouldn’t have to make compromises and you should be making the decision based on getting the right software, deployed in the right way, for your business.