With the SaaS market growing rapidly each quarter, it is becoming harder and harder to distinguish good providers or what we like to call true SaaS Solutions from “want to be’s.” It is important to understand the difference between true SaaS and ASP solutions – there is a big difference.
True SaaS solutions are developed on a multi-tenant platform where as ASPs are usually solutions that were once install based and have moved to a hosted model to compete with the newer more streamlined multi-tenant solutions. So what is the difference anyway?
• Multi-Tenant SaaS
Pioneered by Salesforce.com, a multi-tenant system uses one instance of the software across all users and companies utilizing the product. This means that one software application is used by all, reducing the cost of maintenance and updates. The overall cost of operating the system is a whole lot lower than your ASP solutions, enabling the provider to scale faster to a larger customer base. Although multi-tenant systems have their benefits, there are some downfalls. Since one instance of the software is used, all customers or users see the same features and functionality. Therefore, if a customer wants custom features added, everyone will see them. In an ASP model, each customer is running a separate instance and features can be controlled per instance. There are two keywords to keep in mind when evaluating solutions, the first is Configurable and the second is Customizable. True SaaS or multi-tenant models are usually configurable and ASP models are customizable. When evaluating make sure to ask your representative which bucket they fit into.
• ASP SaaS
These are the companies that have been around longer than SaaS it’s self and made the late switch or change to the hosted service model to stay competitive in today’s low cost software market. The ASP model is best explained as a single or multiple server model with an instance deployed for each company or customer using the software. This means that each new customer will need to wait while the solution provider patricians the server and installs the new instance specifically designed for that customer. The downside is that the costs of operating this model are higher and upgrades are time consuming and expensive due to the fact that each system maintenance and upgrade needs to be rolled out to each server and instance separately as opposed to a single rollout across one instance. Now the good…. ASP solutions are great for larger enterprises that require special functionality and requirements because they can easily be tailored to fit the needs without impacting the other instances on the server.
Speed and Reliability of the Service
The speed and reliability of your provider’s servers will depend on several factors: the quality of their connection to the internet, bandwidth, and the availability of back-up systems. At a high level you want to make sure that the provider has redundant servers as well as a daily tape backup routine.
It is vital that the solution provider offer up information about their back end information as well as a sound disaster recovery plan because whatever changes or disruptions happen will have a direct affect on your business operations. This section is designed to give you a reference point when researching the backend portion of your proposed SaaS purchase:
• Service Level Agreements
A service level agreement is defined as a minimum performance measure at which the service delivered is considered acceptable. This means that the provider must keep to the performance level offered in the service agreement. Since SaaS is an online service it is more than vital that the provider be available via system runtime and support to ensure your data is accessible. Most providers will boast a 99.99% uptime in service, this in most cases is not realistic. Anything from 95%-100% uptime is very reasonable for any service provider. Service may go down every once in a while, meaning once a year due to Internet bandwidth isssues or server errors. This is usually corrected in a 30 minute time frame, but make sure you review your service level agreement to see what their guaranteed recovery time is. It is also a good practice to find out what compensation will be offered if the agreement is broken.
• Compatibility with Existing Software & Systems
If your organization is running in an all Windows or Mac environment it is good to find out if the solution is supported for your current system. Just because a system is web-based does not mean that it works perfectly across all operating systems and browsers. So ask and find out.
• Experience and Expertise
When partnering with a SaaS provider it is good to do a little background check and learn the history of the company. How much experience do they have delivering software-as-a-service? What are their current customers saying about the service level and the quality of the product? The best way to do this is to go to the provider’s website and read customer testimonials, also do a Google search on the company and its founders to see what information comes up.
• Cost Effective and Easy-To-Use Solutions
The benefit of SaaS is that it is cost effective and generally easy-to-use. If you find that the solution seems over priced and not so user friendly, it’s probably not true SaaS and therefore probably not right for your business. Also, the solution should not require additional IT staff or infrastructure, and the service plan should be tailored to your companies needs offering an affordable option with service plan structures that suit your requirements. That being said, providers package service plans to be pretty standard in order to keep their costs down and provide you with an affordable solution.
True SaaS solutions are developed on a multi-tenant platform where as ASPs are usually solutions that were once install based and have moved to a hosted model to compete with the newer more streamlined multi-tenant solutions. So what is the difference anyway?
• Multi-Tenant SaaS
Pioneered by Salesforce.com, a multi-tenant system uses one instance of the software across all users and companies utilizing the product. This means that one software application is used by all, reducing the cost of maintenance and updates. The overall cost of operating the system is a whole lot lower than your ASP solutions, enabling the provider to scale faster to a larger customer base. Although multi-tenant systems have their benefits, there are some downfalls. Since one instance of the software is used, all customers or users see the same features and functionality. Therefore, if a customer wants custom features added, everyone will see them. In an ASP model, each customer is running a separate instance and features can be controlled per instance. There are two keywords to keep in mind when evaluating solutions, the first is Configurable and the second is Customizable. True SaaS or multi-tenant models are usually configurable and ASP models are customizable. When evaluating make sure to ask your representative which bucket they fit into.
• ASP SaaS
These are the companies that have been around longer than SaaS it’s self and made the late switch or change to the hosted service model to stay competitive in today’s low cost software market. The ASP model is best explained as a single or multiple server model with an instance deployed for each company or customer using the software. This means that each new customer will need to wait while the solution provider patricians the server and installs the new instance specifically designed for that customer. The downside is that the costs of operating this model are higher and upgrades are time consuming and expensive due to the fact that each system maintenance and upgrade needs to be rolled out to each server and instance separately as opposed to a single rollout across one instance. Now the good…. ASP solutions are great for larger enterprises that require special functionality and requirements because they can easily be tailored to fit the needs without impacting the other instances on the server.
Speed and Reliability of the Service
The speed and reliability of your provider’s servers will depend on several factors: the quality of their connection to the internet, bandwidth, and the availability of back-up systems. At a high level you want to make sure that the provider has redundant servers as well as a daily tape backup routine.
It is vital that the solution provider offer up information about their back end information as well as a sound disaster recovery plan because whatever changes or disruptions happen will have a direct affect on your business operations. This section is designed to give you a reference point when researching the backend portion of your proposed SaaS purchase:
• Service Level Agreements
A service level agreement is defined as a minimum performance measure at which the service delivered is considered acceptable. This means that the provider must keep to the performance level offered in the service agreement. Since SaaS is an online service it is more than vital that the provider be available via system runtime and support to ensure your data is accessible. Most providers will boast a 99.99% uptime in service, this in most cases is not realistic. Anything from 95%-100% uptime is very reasonable for any service provider. Service may go down every once in a while, meaning once a year due to Internet bandwidth isssues or server errors. This is usually corrected in a 30 minute time frame, but make sure you review your service level agreement to see what their guaranteed recovery time is. It is also a good practice to find out what compensation will be offered if the agreement is broken.
• Compatibility with Existing Software & Systems
If your organization is running in an all Windows or Mac environment it is good to find out if the solution is supported for your current system. Just because a system is web-based does not mean that it works perfectly across all operating systems and browsers. So ask and find out.
• Experience and Expertise
When partnering with a SaaS provider it is good to do a little background check and learn the history of the company. How much experience do they have delivering software-as-a-service? What are their current customers saying about the service level and the quality of the product? The best way to do this is to go to the provider’s website and read customer testimonials, also do a Google search on the company and its founders to see what information comes up.
• Cost Effective and Easy-To-Use Solutions
The benefit of SaaS is that it is cost effective and generally easy-to-use. If you find that the solution seems over priced and not so user friendly, it’s probably not true SaaS and therefore probably not right for your business. Also, the solution should not require additional IT staff or infrastructure, and the service plan should be tailored to your companies needs offering an affordable option with service plan structures that suit your requirements. That being said, providers package service plans to be pretty standard in order to keep their costs down and provide you with an affordable solution.
