SaaS Due Diligence - Part 1 of 2

We all know the importance of due diligence prior to signing a contract.

Here, I've dropped down some thoughts designed to jog your memory - some of these you'll be familiar with, while others are more aligned to a SaaS-type service.

This doesn't get you out of doing your own due diligence - of course - but hopefully you can use these as a springboard to develop a complete checklist tuned to your circumstances.

Internal fit

Narrowing down of the potential offerings that fit to your business, based on factors (in no particular order) including:

• Ease of use

• Performance - including latency

• Functionality - fit to requirements

• Fit to IT architecture - current and future

• Cost

• Balance of risk and opportunity that's an appropriate fit to your specific business

Vendor Profile

• Company strength, history of IPOs, mgmt buyouts, acquisitions, and company valuation history

• Is there a parent company and what are its strategic interests?

• Ownership structure

• Level of innovation

• Strategic partnerships

• Revenue and profit, and how they are trending

• Years in business

• Headcount

• Local account manager

• Localized support

Financial

• Licence structure - what does the subscription comprise - e.g. # users/sites/company subsidiaries, data usage, backup data volume

• Often the service is offered at different grades of functionality - costs varying accordingly.  What are these options and attendant costs?

• How would software upgrades be rolled out - with or without warning, should interruption to service be expected, confirm this would be at no cost to you as client.

• Do costs vary with client headcount?

• Does your bandwidth have sufficient spare capacity - if extra capacity is to be provisioned, is the financial implication significant?

• What compensation is offered should the SLA not be met?