Evaluating SaaS Products: A Comprehensive Guide for Leadership

As businesses increasingly turn to SaaS solutions for their operational needs, it’s crucial to understand how to evaluate these products effectively. This blog post will guide you through the process.

Software as a Service (SaaS) is a cloud-based software distribution model where applications are hosted by a service provider and made available to users over the Internet. This eliminates the need for users to install and maintain software on their infrastructure, resulting in reduced costs and increased scalability.

Understanding SaaS Architecture

When architecting a SaaS product, several considerations must be made. These include choosing a technology stack guided by your product’s current and future requirements. It’s about finding the right balance between leading-edge technologies and proven frameworks. Aspects like scalability, maintenance, and community support should influence your decision.

Five considerations when architecting a SaaS product that is not security-related:

Multi-tenancy allows multiple users or ‘tenants’ to share the same application while securely maintaining individual data. As a customer, you should consider how easy it is to export your data for any reason. It is ok to be on a shared application instance as long as your data is secured and can be exported on demand.
Scalability: Your SaaS application should easily handle growing amounts of work and accommodate increasing users. Scalability would show how the environment can be augmented to handle new customers and your growth. Environments with slowdowns may not have been architected with scaling.
Integration with business systems: The SaaS app should integrate with your organization’s other systems and applications. This blanket statement may not hold true in every instance, but can you integrate with the systems that matter most? Many vendors will have APIs or configuration points that allow the application to pull data in.
User Interface (UI): The UI is the first point of contact, defining the interaction between the users and the SaaS platform. Is the UI accessible and meets your region’s accessibility requirements? Is there proof that it was tested for accessibility in mind? Having an easy to use interface will help with adoption within your teams, but also reduce the inefficiencies of work that the team does. You may not see your ROI if it adds or replaces inefficiencies with new inefficiencies.
Choice of technology stack: Your SaaS product’s current and future requirements should guide your choice of technology stack. It is the technology stack known for security and scalability. There are better-known technology stacks than others regarding security or an industry standard. While a vendor may not disclose this, it doesn’t hurt to ask about it.

Security Considerations

Security is a fundamental aspect of SaaS architecture. A secure SaaS architecture should have three core capabilities: Confidentiality, Uniformity, and the ability to categorize components at different levels and manage them uniformly and efficiently.

Five considerations when architecting a SaaS product that is security-related:

Implement robust access control: Develop and enforce password policies. Do the password policies support NIST? NIST produces guidelines for passwords and how they should be handled, and if the software does not support the guidelines, you should ask more questions.
Data Encryption: Encrypt sensitive data such as user login credentials, payment information, and personal data. Your PII data should be protected at all costs. Logging access to the encrypted data is a must. This means anytime PII data is viewed and manipulated, it should be logged.
Network Security: Implementing firewalls, intrusion detection and prevention systems.
Monitor user activity: Log and monitor user actions to detect potential security breaches.
Keep software up to date: Regularly update your software to protect against potential security vulnerabilities. What is the server maintenance cadence? What is the platform update cadence? These are the questions you should be asking your vendor. It is a big security concern if they are not maintaining the software and the systems hosting it.

Selecting a SaaS Vendor

When selecting a SaaS vendor, consider dependability, compliance and security policies, service level agreements, transparent pricing, connectors, and support. A thorough review of the provider’s offerings and a clear picture of your company’s needs will assist you in choosing a vendor that suits your business’s needs.

Five considerations when selecting a SaaS vendor:

Reliability and Reviews: Check the SaaS provider’s uptime history or study online reviews to learn about the provider’s dependability.
Compliance and Security Practices: Check the provider’s compliance certifications and request information on their security practices.
Service Level Agreements (SLAs) and Support: Understand the vendor’s level of support and service guarantees. Ensure you know what will be done in a Critical and High priority situation. How are High and Critical issues defined, and who makes the judgement call? This is often published with a certain level of obscurity in favour of the vendor.
Transparent Pricing: Understand the pricing structure and any potential hidden costs. Hidden costs creep in when a client wants changes or integrations to the software. Where the line is blurred is the definition of a bug. Ensure you have this clear before signing the bottom line of your agreement. Many customers can be surprised and even handcuffed when the hidden costs are introduced during or post-implementation.
Integration Capabilities: Ensure the SaaS solution can integrate with your existing systems.

Engaging with customers on social media can significantly impact a vendor’s reputation, customer retention, and overall success. It allows vendors to connect with potential customers, showcase their products and services, and build a community around their brand. If a vendor only publishes photographs of conferences and posts in the past tense, it demonstrates a lack of awareness for their customer. A vendor’s customer is their brand, and their brand is their industry knowledge. If they are not engaging a customer and talking about their industry, they are not the vendor for you. A vendor who showcases their booth setup but doesn’t post updates and invitations for a visit during a conference is not engaged correctly and should be avoided ( they are there for them and not you ). You need a vendor following and talking about industry trends regularly ( especially in a regulated industry that is often changing ).

Licensing a SaaS Product

When buying a SaaS license for your company, consider factors such as the vendor’s scalability and reliability, security features, pricing models, system capabilities, and contract terms. SaaS licenses offer benefits such as reduced upfront capital costs, an uncomplicated ability to scale up and down based on need, and the ability to focus on core competencies.

Diversifying Risk Between Vendors

Diversification is a crucial strategy for reducing risk and potentially increasing returns. However, like any investment strategy, diversification has pros and cons that should be carefully considered.

The Pros of Licensing a SaaS Platform

Licensing a SaaS platform offers several benefits, such as lower upfront costs and the ability to customize software to specific needs. With a SaaS licensing model, companies can avoid the hefty upfront expenses of perpetual licensing.

Five considerations for customers buying a SaaS license for their company to use:

Size of your organization: Determine how many licenses you need or expect to need shortly.
Specific needs and requirements: Check if the SaaS app can integrate with your organization’s other systems and applications.
Budget and spend: Understand the cost implications of the SaaS license.
Required capabilities and features: Ensure the SaaS solution meets your business needs.
Service Level Agreements (SLA): Understand the level of service and support guaranteed by the vendor.

FAQ

Q: What is SaaS?
A: SaaS, or Software as a Service, is a form of cloud computing in which the provider offers application software to a client and manages all the physical and software resources the application uses.

Q: What are some considerations when architecting a SaaS product?
A: Considerations include the choice of a technology stack, scalability, maintenance, and community support.

Q: What are some security considerations when architecting a SaaS product? A: A secure SaaS architecture should have three core capabilities: Confidentiality, Uniformity, and the ability to categorize components at different levels and manage them uniformly and efficiently.

Q: What are some considerations when selecting a SaaS vendor?
A: Consider dependability, compliance and security policies, service level agreements, transparent pricing, connectors, and support.

Q: Why is it essential for a vendor to be engaged with their industry on social media?
A: Engaging with customers on social media can significantly impact a brand’s reputation, customer retention, and overall success.

Q: What are some considerations when buying a SaaS license for a company?
A: Consider the vendor’s scalability and reliability, security features, pricing models, system capabilities, and contract terms.

Q: What are the pros and cons of diversifying risk between vendors?
A: Diversification is a crucial strategy for reducing risk and potentially increasing returns. However, like any investment strategy, diversification has pros and cons that should be carefully considered.

Q: What are the pros of licensing a SaaS platform?
A: Licensing a SaaS platform offers several benefits, such as lower upfront costs and the ability to customize software to specific needs.

Acronym Dictionary

SaaS: Software as a Service
FAQ: Frequently Asked Questions
ROI: Return on investment
UI: User Interface
PII: Personally Identifiable Information

Further Research

For further research, you may find the following resources helpful:

In conclusion, evaluating a SaaS product involves a comprehensive understanding of the product’s architecture, the vendor’s reliability and support, the product’s security features, and the license terms. Considering these factors, you can decide to suit your company’s needs best.