How to Choose Cloud Vendors

When you?re selecting a cloud provider, it?s important to consider three key principles:

? The product must provide a quick win for your users through ease of use.

? The provider must be well-funded.

? Implementation times and the road map must be understood before you select a provider.

These three principles are universal in software selection, but are especially important criteria when you?re selecting a software as a service (SaaS) provider.

The Product: Obviously, if a product doesn?t resolve an issue, there?s no need to subscribe. However, when evaluating a SaaS solution, some additional items must be part of the solution.

First, the solution must be easy to use for at least 80 percent of the users? needs. Your training time should be spent on power features rather than basic usage instructions.

Second, the product must permit an easy setup for data access controls. System administrators should be able to readily set up and provide user access, reporting capability and data input. You should evaluate solutions that provide multiple levels of access.

Third, the product must be user-customizable. The end user should be able to customize a number of features without having to get the system administrator involved.

The Provider: The provider should be economically viable, so it doesn?t go out of business in six months. There are a few things you can review to determine economic stability. Start with financial statements, then speak with a couple of the provider?s board members and ask about new customers and why customers might leave. Be wary if the price and terms seem too good to be true.

You should ask for one-year contracts and at least quarterly billings. If you get a better deal, that?s great. However, if the deal negatively affects the solutions provider?s cash flow, your great contract terms could disappear if the provider runs out of money and closes its doors.

The second area to explore is the data center, where you can learn about and test the provider?s reliability, security and privacy. Ask the vendor to post, in real time, its site?s performance. A quality provider is most likely already doing this, but, if not, insist on getting real-time access to system status.

Finally, get to know the provider?s CTO and the product manager. Make sure you know the developers (or at least the leaders) and use this to assess the road map and quality of the team and to influence product outcomes.

A SaaS provider should always be listening to and acting on customer input. As a result, it should be updating its product at least three times a year. Anything less and the provider may not be properly architected for SaaS.

The Implementation: Implementation is critical to any solution, but it?s often ignored. The advantage of SaaS over traditional software is that it can be modified to better meet user needs. So look for open and standard APIs and ask to see integration with your other key systems.

Understand?and have the provider demonstrate?how its solution interoperates with other SaaS providers. The power of SaaS for the end user lies in its real-time sharing of information to enhance productivity.

Not all solutions will be seamless at the start, but you should drive the provider toward that goal and make it part of the process. The best providers are proactive in working with other SaaS companies to interconnect their solutions.

A word of warning: If you get resistance to easy integration, it may mean the provider has not thought through the issues, and you may find yourself stranded with uploads and downloads via spreadsheets, which will have a negative impact on productivity.

Over the next decade, SaaS will be the way in which all solutions are provided. The industry is still in the development phase, so you cannot compare features of a 30- to 40-year-old on-premises solution to today?s SaaS solutions.

But the new solutions will get there faster than traditional software, so it?s worth starting with SaaS now in order to learn the power of these solutions. You must also work closely with your provider to meet your needs over time so that you can influence how your problems will be solved.

Steve Cakebread is the founder and principal at J Stevens & Co., a San Francisco area business advisory firm. Prior to that, he was an executive at, Hewlett-Packard and Autodesk.