How to Evaluate Your SaaS Provider

The ever-growing trend towards EaaS, or Everything as a Service, provides IT buyers and decision makers a wide variety of choices to streamline and minimize the cost of IT resources. On the one hand, there is a plethora of available SaaS platforms, while on the other there is an important need for employees making purchasing decisions to know how to properly asses these service providers.

To help you evaluate SaaS providers, here are four specific criteria that should be considered in the process before any decisions are made.

Services Are Delivered Around Best Practices

In their brochures, many companies boast that their services are “top class” or “above industry standards”. The easiest way to verify the validity of these claims is to check which standards or best practices they are meeting. For example, one of the most important standards for enterprise contract management system providers is SAS70 compliance. There are two levels of SAS70 audits, Type I and Type II. The Type II audit checks the established controls for operation and testing of operational effectiveness. This is a very thorough audit that examines the activities of the SaaS provider during a 6-month period.  Depending on specific conditions, the testing period may vary between 4 and 10 months.

Takeaway: Don’t blindly trust sales people and their brochures. Make sure to check for industry standards that provide assurance for best-in-breed claims from service providers.

Establish Expectations for Service

A common practice from SaaS providers is to try to upsell you more comprehensive models or additional modules. Before you accept those additional terms, make sure to establish specific service clauses that define your expectations upfront.

For example, your Service Level Agreement, or SLA, needs to include specific clauses for response and fix times. Don’t let your vendor get away with a minimal service commitment that may put your business operation in jeopardy. If your vendor convinces you to virtualize a key business application, then they need to include a clause that provides adequate response times. Patent attorney, Tyson Benson provides some specific guidelines for this:

Response time clauses may set forth a quicker response time for more serious reported issues (e.g., a severity level 4 problem receives a quicker response time as compared to a severity level 1 problem).  Of course, fixing the problem should be part and parcel with responding to the reported issue.  Thus, the SaaS agreement should set forth an agreed amount of time for the vendor to fix a problem.  As with the response time clause, the fix time clauses may dictate a quicker turnaround time for more serious issues as compared to less serious issues.

Takeaway: To establish clear expectation for service, you should always include specific clauses in your SLA.

End Users Provide Feedback to Provider

While a SaaS provider may meet established expectations for service, they should also be checking in with end users on a regular basis to pinpoint opportunities for improvement. This is the key difference between a service provider and a business partner. You want to look for the companies that survey users for feedback on a continuous basis (e.g. every 4-6 months), because that company will be often be more willing to make the necessary improvements for better performance over time.

Takeaway: When committing to a SaaS provider, you should make sure that they are committed to making continuous improvements based on end user feedback.

ROI is Evaluated Periodically

Even though you should expect to enter into long-term SaaS agreements (after all, the longer you work with a provider, the better the provider will understand your business), you should avoid the “OK, I’m done” mindset. You only get out of a SaaS relationship as much as you put into it. Constant communication with your provider is necessary for a successful, long-term relationship.

A key element to review is the ROI of your investment. Just like kicking the tires of your car won’t tell you how well it’s running, you need to probe deeper into the performance from your SaaS application to truly determine its ROI. Before signing any service agreement, you should establish a period for measuring key performance indicators with your provider. Having these KPIs will allow you to work with your provider in an structured and objective manner.


Measuring ROI is just as necessary as measuring user feedback. Knowing the return on your investment will help you evaluate the performance from your current partner and determine whether or not you need to find a new one.