A cloud vendor “gotcha” – escalating fees – is a real concern for many companies considering a Software as a Service (SaaS) strategy and to be candid, unfortunately, it’s completely justified. I myself have heard the industry stories about vendors holding clients hostage with unjustified subscription fee increases that, over the long term, all but completely erode the original savings in software, hardware and support.
This underscores the need for what I like to call “Meyer’s List of Contractual Assurances.” Trust me: Read this little piece of software insider wisdom now and you’ll thank me later. OK, so without further ado, here it goes:
In the area of pricing assurances, make sure there is a price cap, so going into the relationship you’ll know what the fees will be if all is successful and you decide to renew the service. This ensures you (and the vendor) have an absolute understanding of the upper range of what you will pay.
It’s also important to have data assurances. Yes, breaking up is hard to do, but if you’re cutting ties with your SaaS vendor and they have your grandmother’s ring (so to speak), you’re going to want it back — without any emotional blackmail, and also without a $$$$ penalty, let’s say.
DATA CENTER ASSURANCES
Next data center assurances should be validated. This is an easy one, simply ask to see the SAS 70 II certification report to validate that the system is being hosted in a credible, top-tier data center and not some server in the vendor’s storage closet. A SAS 70 II is a detailed audit that shows the data center has been thoroughly checked and deemed to have satisfactory controls and safeguards in place for hosting.
SERVICE LEVEL ASSURANCES
Service level assurance is important, of course. From my perspective, it’s become table stakes. However, contractual assurances regarding the service’s downtime limits and support response times should be called out, nonetheless.
As the cloud continues to grow in popularity, customers will gain more options and more leverage as SaaS vendors grow in number and no longer wield the power to make aggressive and unilateral demands. But in the interim I leave you all with the list and invite you to get more tips on venturing into the cloud in Infoworld’s Special Report.