Moving to a Software-as-a-Service (SaaS)-based solution may be one of the smartest financial moves that a small or midsize business (SMB) can make, but it will only pay off if you choose the right vendor.

Security is always an important issue. Most companies ask if the vendor uses SSL, but security is much more than that. Consider the following points: • Who has permission to access these servers? Is it only internal employees, or do contractors also have access? • Is there a log that captures who came in and when they left? How often are those logs audited? • Does the application use industry-standard 128-bit encryption? • If multiple customers are housed on the same server, are they logically/physically separated to ensure your data is not viewed by unauthorized eyes?

Another important consideration is whether the system is actually web-based. If the vendor needs to install something on each user’s computer work station, you can bet that it is not. One of the largest benefits of having a browser-based solution is that you don’t have to install it on individual computers.

Another thing to watch for is applications that were built on a legacy platform, and then “webified”. They are not a true browser-based application, and these applications are not as scalable or secure as true browser-based applications. Your vendor should be able to demonstrate to you that it can grow with your company, as its needs grow.

Upgrades should be free, automatic and non-intrusive. SaaS solutions are generally easy to integrate with your other existing software applications. Data transfer in and out of the SaaS application should be available. Also inquire about data backup. You may need nightly backup or more infrequently. Also find out if the vendor or the 3rd party host has undergone a SAS 70 Type II audit.

Once you have your SaaS vendor selected and have established a working relationship, it would be wise to maintain a bi-annual review of your service to ensure that your vendor thoroughly covers these above items. SaaS will continue to revolutionize the business landscape, and vendors will continue to compete for your business. Take advantage all of the benefits that SaaS can offer: Cost effectiveness, scalability, flexibility, real time data, easy upgrades, easy integration and thin client structure.