Welcome!

Release Management Authors: Pat Romanski, Elizabeth White, David H Deans, Liz McMillan, Jnan Dash

Related Topics: @CloudExpo, Microservices Expo, @BigDataExpo

@CloudExpo: Blog Post

SaaS Adoption: Before You Sign on the Dotted Line | @CloudExpo #API #SaaS #Cloud

The attraction of SaaS offerings for businesses include advantages such as speed of delivery, scalability, and low cost of entry

The purpose of this article is draw attention to key SaaS services that are commonly overlooked during contact signing that are essential to ensuring they meet the expectations and requirements of the organization and provide guidance and recommendations for process and controls necessary for achieving quality SaaS contractual agreements.

Introduction
The attraction of Software as a Service (SaaS) offerings for businesses include advantages such as speed of delivery, scalability, low cost of entry, accessibility, and lower costs to just name a few. But one can't deny another aspect of SaaS adoption which is the "selling" aspect of such solutions. SaaS providers want their customers to feel that not only do they have the best solution, but they have your best interest in mind and will take care of everything for you. They will often pitch their solution services as complete and comprehensive to their customer's needs. But is it necessarily true in all cases? Just like leasing a home or an automobile, it's extremely important to understand the services provided and if those services match the needs and requirements of your business. There are some basic common areas in which key services should be understood and, if needed, be negotiated with the provider to ensure you're provided the best services possible. Don't assume that because other customers agreed to the provider's standard agreement, that it also meets the needs of your business.

Hosting Arrangement and Third Parties
Not all SaaS solutions are developed, integrated, supported and hosted the same. In order to understand and evaluate potential risks, such as the SaaS Provider becoming insolvent and going out of business, it's important to understand the hosting arrangement and identify all parties involved. Here are some things to ask:

  • Is the solution single tenant, multi-tenant, or on its own hardware?
  • Does the SaaS provider host their solution or utilize a third party such as Amazon and Microsoft Azure?
  • Will the solution be implemented or supported by a third party?
  • Are there third-party products or services required for the solution to operate?

Understanding the Data
Data is the critical part of a SaaS solution. Before the contract is signed, the data formats and even the data relationships of the solution should be well understood. This becomes even more essential if the SaaS solution is expecting data imports from legacy or integrated systems. Once understood a data strategy will often need to be in place. But without understanding the work involved in conversion, the budget and resources may not be adequate for the project. As early as the Request for Proposal (RFP) stage, all potential SaaS providers should supply data format and relationship information.

Environments
It's common for a SaaS Provider to only provide a production environment and use of a common sand-box environment. This proves to be insufficient because the customer has no control as to who makes changes to this environment in terms of configuration and data refreshes. In most cases at least two environments (production and non-production) environments are necessary, so there's an opportunity to test out any configuration changes before going into production. Here are some other examples as to the requirement for additional environments:

  • A development environment could be needed to test complex system integrations or custom development.
  • A training environment with the specific company configuration is required.

True System Availability
SaaS providers will give a percentage (such as 99.9%) of guaranteed uptime / system availability and if for a given month that is not met, a credit is due back to the customer. SaaS agreements define uptime / system availability in a variety of ways. The trick is to step back and fully understand all the possible ways the system could be unavailable on a monthly basis. There are usually two main kinds of unavailability that are planned and unplanned. One of the more common unplanned calculations is as follows.

Uptime Calculation:

((Users Minutes - Downtime) / User Minutes) x 100 = Uptime %

In addition to the promised uptime from the SaaS provider there's also a section in the agreement for planned maintenance. The window of the planned maintenance varies greatly depending on the provider and solution. It could be one hour a month or it could be eight hours per week. What's extremely important to point out here is that in most cases the provider will not include planned maintenance in this calculation for the promised uptime. Therefore the true uptime / system availability promised by the provider is much less given that they could use the entire planned maintenance window and not have to provide any service credits. This may or may not be acceptable based on when the solution is expected to be used, but it's important to understand all aspects of when the solution may not be available.

Time Zones for Service Support
It's important to be aware of the time zones indicated in the agreement in terms of Support Center availability. Your organization could be located in the Eastern Standard Time zone while the SaaS provider's support center is located in the Pacific Standard Time zone where there's a three hour difference. This can be an issue when employees come in at 8 am EST on Monday only to find the solution is not working and the provider's support center is not open until 8 am PST.

Security Breaches and Reporting
The SaaS contract should define the procedure in which pProvider informs your organization when a security breach occurs including how your organization should be contacted and the actions to be taken. In addition, there should be language that by request they should provide any penetration testing reports and proof of on-going security certifications standards (ISO27001, SSAE16, etc.).

Incident Resolution
Expectations as to how incidents are handled should be well defined. Here are some areas to consider:

  • Quicker response for critical and high incidents
  • Escalation of high priority incidents. For example if a high priority incident isn't resolved in two days it becomes a critical incident.
  • The specific method of how your organization should be contacted when these incidents occur.
  • How quickly the vendor should communicate the incident and the expectation of when it will be resolved. Failure to do so would lead to a service credit.

Service Level Credits
What good is a system uptime guarantee of 99.9% if there's no defined compensation when service levels are not met?

  • Define what areas of the service need to be measured (performance, availability, incidents, etc.). Note that in order for this to be effective, there must be a non-subjective way to gather information to measure whether service levels are being met.
  • Make sure your credit structures are well defined in terms of when a credit would occur.
  • Make sure that the contract spells out when (quarterly or annually) and how service levels will be applied (credit or cash back).

Service Renewal
Beware of rate hikes! Many SaaS providers will put in high increases once the term is over. Here are some suggestions to help reduce the high expense impact on renewal:

  • Limit the increase in fee to 3% or an industry standard price index.
  • You may also want to look for a longer term contract up-front (five years instead of three, etc.)
  • Make sure you include a clause that even if the product name changes or gets bundled you pay the same fee.

Return of Company Data
Though the focus when adopting a SaaS solution is getting it up and running, it's important to know how you will handle the data once the relationship with the provider comes to an end. Here are the things to keep in mind:

  1. Data Format: Many SaaS providers will tell you that they will give you the data in the format they select or refer to a standard format. Make sure you negotiate the specific format in the agreement or state that you need to agree upon a format.
  2. Data Definitions: Make sure the provider includes the data definitions of the data they give you. What good is a blob of data if you don't understand it and how to parse out the information?
  3. Data Completeness: Make sure the data given back to you includes any custom scripts and APIs. You want all the custom data that is specific to your organization as it will also include business rules.
  4. Data Expiration: Make sure the provider holds the data for enough time so it can be sent back to you.
  5. Data Return Request: Many SaaS providers will return data only upon request, so make sure you have enough time and understand that you have to initiate the request.
  6. Cost: Beware that some providers will charge for the return of your data so make sure that this is negotiated upfront in the agreement.

In addition, be aware that some providers get rid of the data as little as one week after the end of the contract (usually 30 days). Make sure the time-frame meets your expectations.

Recommendations
In addition to the guidance provided, the following recommendations are encouraged:

Hosted Services Requirements Document
Work with your procurement, security, IT architecture, and legal teams to develop a Hosted Services Requirements document outlining service expectations for the SaaS provider. The document should be used as part of the contractual agreement. If the SaaS provider would rather utilize their own agreement, the Hosted Services Requirements document can then be used as a guideline to compare what your organization wants and what the provider is proposing.

The Hosted Services Requirements document will consist of legal, security, and service related items such as (just some examples):

System Availability

System Performance

Incident Management

E-Discovery

Disaster Recovery

Subcontracting

Insurance

Infringement Indemnity

Service Renewal

Data Ownership

Data Storage

Data Retention & Return

Data Protection

Security

Service Level Credits

Reporting

Dispute Resolution

Software Escrow

Advertising

Acceptance Period

Compliance & Laws


Develop Standard SaaS Questions for RFI / RFP
Though not all SaaS solutions are alike, there are still basic questions you will want to know about the solution from a support, implementation, pricing, and hosting arrangement perspective. In order to measure provider risks and evaluate solutions in a common manner, standard questions become very important.

Institute A SaaS Agreement Review Process
SaaS service agreements and contractual documents should be looked at carefully from various points of view. Such as:

  1. Legal - Is there enough protections to minimize risk?
  2. Procurement - Are the pricing terms and renewal rates acceptable?
  3. IT Architecture - Does the solution meet our Enterprise IT standards and strategy?
  4. IT Security - Does the offering provide adequate security protections based on the type of information being used and how it's utilized?
  5. Solution Owner - Does the solution provide the services necessary for the community using this solution?
  6. Accounting- What part of this solution can we capitalize and what is expense?

More Stories By Ed Witkovic

Ed Witkovic is an IT Solutions Architect at Eversource based in Berlin, Connecticut. His 20+ years of diverse expertise includes leading development and integration teams, Manager and Director of IT Key Account Management for Henkel, and now currently focused on Cloud Adoption in regards to IT Processes, Roadmaps, Solution Design, Strategy, and Solution Assessments.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
SYS-CON Events announced today that Daiya Industry will exhibit at the Japanese Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Ruby Development Inc. builds new services in short period of time and provides a continuous support of those services based on Ruby on Rails. For more information, please visit https://github.com/RubyDevInc.
As businesses evolve, they need technology that is simple to help them succeed today and flexible enough to help them build for tomorrow. Chrome is fit for the workplace of the future — providing a secure, consistent user experience across a range of devices that can be used anywhere. In her session at 21st Cloud Expo, Vidya Nagarajan, a Senior Product Manager at Google, will take a look at various options as to how ChromeOS can be leveraged to interact with people on the devices, and formats th...
SYS-CON Events announced today that Yuasa System will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Yuasa System is introducing a multi-purpose endurance testing system for flexible displays, OLED devices, flexible substrates, flat cables, and films in smartphones, wearables, automobiles, and healthcare.
Organizations do not need a Big Data strategy; they need a business strategy that incorporates Big Data. Most organizations lack a road map for using Big Data to optimize key business processes, deliver a differentiated customer experience, or uncover new business opportunities. They do not understand what’s possible with respect to integrating Big Data into the business model.
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities – ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups. As a result, many firms employ new business models that place enormous impor...
SYS-CON Events announced today that Taica will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Taica manufacturers Alpha-GEL brand silicone components and materials, which maintain outstanding performance over a wide temperature range -40C to +200C. For more information, visit http://www.taica.co.jp/english/.
SYS-CON Events announced today that Dasher Technologies will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Dasher Technologies, Inc. ® is a premier IT solution provider that delivers expert technical resources along with trusted account executives to architect and deliver complete IT solutions and services to help our clients execute their goals, plans and objectives. Since 1999, we'v...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, will discuss how they b...
SYS-CON Events announced today that MIRAI Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MIRAI Inc. are IT consultants from the public sector whose mission is to solve social issues by technology and innovation and to create a meaningful future for people.
SYS-CON Events announced today that TidalScale, a leading provider of systems and services, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale has been involved in shaping the computing landscape. They've designed, developed and deployed some of the most important and successful systems and services in the history of the computing industry - internet, Ethernet, operating s...
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant tha...
SYS-CON Events announced today that TidalScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale is the leading provider of Software-Defined Servers that bring flexibility to modern data centers by right-sizing servers on the fly to fit any data set or workload. TidalScale’s award-winning inverse hypervisor technology combines multiple commodity servers (including their ass...
As hybrid cloud becomes the de-facto standard mode of operation for most enterprises, new challenges arise on how to efficiently and economically share data across environments. In his session at 21st Cloud Expo, Dr. Allon Cohen, VP of Product at Elastifile, will explore new techniques and best practices that help enterprise IT benefit from the advantages of hybrid cloud environments by enabling data availability for both legacy enterprise and cloud-native mission critical applications. By rev...
Infoblox delivers Actionable Network Intelligence to enterprise, government, and service provider customers around the world. They are the industry leader in DNS, DHCP, and IP address management, the category known as DDI. We empower thousands of organizations to control and secure their networks from the core-enabling them to increase efficiency and visibility, improve customer service, and meet compliance requirements.
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Amazon is pursuing new markets and disrupting industries at an incredible pace. Almost every industry seems to be in its crosshairs. Companies and industries that once thought they were safe are now worried about being “Amazoned.”. The new watch word should be “Be afraid. Be very afraid.” In his session 21st Cloud Expo, Chris Kocher, a co-founder of Grey Heron, will address questions such as: What new areas is Amazon disrupting? How are they doing this? Where are they likely to go? What are th...
SYS-CON Events announced today that N3N will exhibit at SYS-CON's @ThingsExpo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. N3N’s solutions increase the effectiveness of operations and control centers, increase the value of IoT investments, and facilitate real-time operational decision making. N3N enables operations teams with a four dimensional digital “big board” that consolidates real-time live video feeds alongside IoT sensor data a...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, will lead you through the exciting evolution of the cloud. He'll look at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering ...
Digital transformation is changing the face of business. The IDC predicts that enterprises will commit to a massive new scale of digital transformation, to stake out leadership positions in the "digital transformation economy." Accordingly, attendees at the upcoming Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA, Oct 31-Nov 2, will find fresh new content in a new track called Enterprise Cloud & Digital Transformation.