Avoid These 5 Mistakes When Choosing a SaaS Hosting Provider

Startups

Paul Korzeniowski · Jan 9, 2024 · 5 minute read

Let’s say you want to buy a gold necklace. It’s not feasible to purchase an ounce of gold and acquire all the machines needed to melt it and shape it. A better choice would be to develop a relationship with a jeweler who has the equipment, expertise, and skills to create fine masterpieces, along with the knowledge of what’s comfortable to wear and what’s in fashion. 

SaaS hosting is the same. Rather than create a proprietary server from a bare metal setting, most small and medium businesses are turning to vendors to support their SaaS applications. And it turns out to be the smartest choice. A global survey of 1,300 C-Suite executives by Wipro FullStride Cloud Services found that while all companies enjoyed increased profitability, SaaS companies reported the highest margins.

Hosting is a sophisticated service with complicated and technical options, and the evaluation requires time and resources. Companies want a life partner, not a short-term fling. Therefore, they need to know what they’re looking for and what they’re NOT looking for in their quest to find the right application hosting service. Here are five potential problems to avoid when selecting a hosting provider for your SaaS solution. 

1. Do Your Homework

A typical evaluation process for a SaaS startup to find a cloud hosting provider might consist of a few cursory tasks. For example, a business owner might start with a Google search and do a quick browse of cloud providers’ websites.

To find the right match, a deeper dive is in order. They need to look behind the curtain and investigate the strengths and weaknesses of each hosting provider. One list item to consider is how long the company has been in business. Many providers are actually one- or two-person operations. Make sure that your potential partner has a long legacy and a real, experienced staff supporting its operations.

Reading customer testimonials is another important step in the process. Online reviews can be found for most of the major providers, or you can dig further and talk to current customers for real-life examples of how the provider keeps its clients happy (or not). 

Many cloud hosting providers offer free trials to test how well the services fit their workloads. This is a great opportunity to get a feel for the services and the support offered by each cloud provider. 

2. Ensure the System is Scalable

Every company wants to grow, and they need services that can grow with them. As they make the journey, they do not want to be hamstrung by inadequate computer infrastructure. They need a supplier that offers them a simple way to extend their services.

A good idea is to share your long-term business plan with potential SaaS hosting providers. What support services can they offer you? How does growth impact a Service Level Agreement (SLA)? Is the partner truly interested in helping your business or do they view you as a recurring revenue stream? The ideal SaaS hosting provider develops service plans unique to your business, rather than force your business into their cookie cutter solution.

3. Establish Top Notch Security

Security and governance are important considerations for any SaaS hosting service today, especially in areas like health care and government where industry regulations set high bars. Therefore, companies need a hosting SaaS provider that commits to a strong security framework. The service should feature cloud firewalls and support real-time monitoring of your workload. Data needs to be analyzed and filtered so the source, destination, and content are identified and authenticated. Finally, the services not only have to be secure but also easy to implement.

4. Avoid Vendor Lock-In

Some providers make it easy to sign up for the service but difficult to change if it doesn’t work out. They include very high switching costs that are often in the fine print of the agreement. In addition, the process of moving your data from their service to another can be complex, time consuming, and difficult.

The time to prevent vendor lock-in and maintain data independence is at the start of negotiation —not after an agreement has been finalized. Companies need to focus as much on what may happen later as on what is needed now. They need to work with suppliers that are transparent and support open Application Programming Interfaces, so should the need to move arise in the future, the process will not be onerous.

5. Read the SLA Closely

Most hosting companies offer a range of SLAs. The agreements may start with a free trial and move on to complex SLAs for heavy and demanding workloads. The agreements usually formalize a variety of performance metrics that impact users’ ability to access the SaaS app. 

A client should establish metrics for a performance SLA and an uptime SLA. The performance SLA examines how well the network is processing transactions. The uptime SLA examines whether or not the network is up and running. A system can meet the second measurement by being up and online, in a technical sense. However, users may wait for several minutes before their transactions are completed. It’s preferable to include both metrics in a contract, to ensure that your service is not only available but also responsive to user needs.

Conclusion 

Just like selecting the perfect gold necklace, finding the right hosting partner requires careful consideration. Don’t settle for a glittery facade – delve deeper, prioritize security and scalability, and avoid hidden clauses that lock you in. Remember, the ideal provider fosters your growth, not hinders it. With the right partner by your side, your SaaS can shine brightly in the cloud.