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Seven Essential Questions For SaaS Hosting Providers
'Software as a Service' (SaaS) continues to gain momentum among software business executives as a more cost effective and easier to control delivery mechanism. SaaS has the added benefit of a recurring, predictable revenue stream. But the move to SaaS often leads ambitious software companies finding themselves with two major headaches:First, how do they continue to deliver excellent service to their growing customer base without making major capital investments in essential IT and Facilities infrastructure?
Second, how do they minimize the ongoing operating expenses and tech personnel costs of being at the leading edge of a very competitive environment?
Online Tech has worked closely with SaaS companies looking to achieve the advantages and cost savings that come from partnering with a premier Managed Data Center operator. Based on that experience, this article presents seven essential questions any SaaS company should ask before selecting a SaaS Hosting Partner.
1) A 100% Guarantee isn't an SLA
As a SaaS provider you offer a certain level of functionality to your customers, with the level of service being specified in a Service Level Agreement (SLA).
Many hosting providers will offer you a "guaranteed 100%" uptime. However, this doesn't mean they deliver 100% uptime. What happens is that you get a service credit if they don't deliver 100% uptime. Therefore make sure you carefully review their uptime statistics and SLAs to make sure it is consistent with the SLA you're offering to your customers.
You should also ask for written details on how they deliver their electrical power, network and server SLAs. (For example, do the managed servers have hot-swappable power supply units? Do they have dual network connections to redundant Internet connections? Does the data center have multiple power paths into the building and full generator backup? Is there more than one data center for remote data backup and disaster recovery?)
Many hosting providers will offer you a "guaranteed 100%" uptime. However, this doesn't mean they deliver 100% uptime. What happens is that you get a service credit if they don't deliver 100% uptime. Therefore make sure you carefully review their uptime statistics and SLAs to make sure it is consistent with the SLA you're offering to your customers.
You should also ask for written details on how they deliver their electrical power, network and server SLAs. (For example, do the managed servers have hot-swappable power supply units? Do they have dual network connections to redundant Internet connections? Does the data center have multiple power paths into the building and full generator backup? Is there more than one data center for remote data backup and disaster recovery?)
2) Do They Get the Big Picture?
Want to know a SaaS company's worst hosting provider nightmare? Signing a contract only to find their SaaS hosting provider does little more than deliver 'ping, power & pipe'.
What's apparently been saved in lowered monthly costs is lost many times over by not being able to scale up the infrastructure to support rapid growth, or recover quickly enough from operational problems.
That's why some leading SaaS hosting providers use a conceptual framework to position their service offerings appropriately. At Online Tech we call ours the 'Internet Delivery Stack'. This is a nine-part model that helps our SaaS clients better understand the value we each bring to the technical and business relationship.
The top three layers of the stack (user experience, application code and database) should be the primary focus for SaaS providers, as these are what their customers see and touch.
The lower six layers of the stack (server operating system, server hardware, Network, Internet Connections, Electricity and Facilities) are normally best outsourced to the expertise of the managed server hosting providers.
What's apparently been saved in lowered monthly costs is lost many times over by not being able to scale up the infrastructure to support rapid growth, or recover quickly enough from operational problems.
That's why some leading SaaS hosting providers use a conceptual framework to position their service offerings appropriately. At Online Tech we call ours the 'Internet Delivery Stack'. This is a nine-part model that helps our SaaS clients better understand the value we each bring to the technical and business relationship.
The top three layers of the stack (user experience, application code and database) should be the primary focus for SaaS providers, as these are what their customers see and touch.
The lower six layers of the stack (server operating system, server hardware, Network, Internet Connections, Electricity and Facilities) are normally best outsourced to the expertise of the managed server hosting providers.
3) Leave 'High Availability' Dedicated Servers and Managed Hosting to the Professionals
There's a very logical reason for doing so.
Business-class data centers can cost from $1000 to $1500 per square foot to construct, equating to 10 - 20 year investments. This means that significant capital investments are required to provide and maintain space, power, cooling and network functionality in a way that is cost-effective for SaaS companies to take advantage of.
At the server level this translates into being able to deliver a range of high-end and affordable managed server solutions that match business requirements. That's why Online Tech delivers SaaS hosting with Intel Xeon-based Dell servers, running either Linux or Windows operating systems. Our managed dedicated servers come in four main flexible configurations - basic, advanced, database and virtual server platforms - and all of these contain dual power and network feeds as standard.
Add in dedicated firewall connections, remote (KVM) monitoring plus managed storage and backup, and you have a formidable infrastructure in support of your SaaS business.
Contrast that approach with one where a SaaS provider assigns an in-house developer the often hurried task of deploying poorly configured servers for testing, staging and even production. The application, not the infrastructure, is where the competition happens, so the developer in the end abandons the infrastructure that quickly becomes a growth bottleneck due to security, reliability or scalability issues.
Business-class data centers can cost from $1000 to $1500 per square foot to construct, equating to 10 - 20 year investments. This means that significant capital investments are required to provide and maintain space, power, cooling and network functionality in a way that is cost-effective for SaaS companies to take advantage of.
At the server level this translates into being able to deliver a range of high-end and affordable managed server solutions that match business requirements. That's why Online Tech delivers SaaS hosting with Intel Xeon-based Dell servers, running either Linux or Windows operating systems. Our managed dedicated servers come in four main flexible configurations - basic, advanced, database and virtual server platforms - and all of these contain dual power and network feeds as standard.
Add in dedicated firewall connections, remote (KVM) monitoring plus managed storage and backup, and you have a formidable infrastructure in support of your SaaS business.
Contrast that approach with one where a SaaS provider assigns an in-house developer the often hurried task of deploying poorly configured servers for testing, staging and even production. The application, not the infrastructure, is where the competition happens, so the developer in the end abandons the infrastructure that quickly becomes a growth bottleneck due to security, reliability or scalability issues.
4) Real-time Maintenance Windows Should Not Affect Your Customers
If you design your hardware stack properly (see the model described in the Internet Delivery Stack) and make use of redundant hardware, you can still maintain full production availability even during a maintenance window.
Real-time maintenance allows you to roll out new features more quickly as you avoid having to schedule and announce maintenance windows to your customers. Your developers will appreciate it because they're able to work more normal business hours, but in a real-time maintenance environment. Users like it too because their confidence in the reliability and stability of your entire application solution increases.
Real-time maintenance allows you to roll out new features more quickly as you avoid having to schedule and announce maintenance windows to your customers. Your developers will appreciate it because they're able to work more normal business hours, but in a real-time maintenance environment. Users like it too because their confidence in the reliability and stability of your entire application solution increases.
5) Scalable Service - Not Just Scalable Infrastructure
A significant challenge for a SaaS provider is to properly size the "store." Imagine you had to build a store but you've no idea if it should be 500 sq feet or the size of two city blocks. It's very important to select a hosting provider who has the infrastructure to support your growth and not be a bottleneck.
For example, you might begin with dedicated servers and a managed backup server in the same data center.
Then, as clients and data traffic increase, your business model requires that backup data is securely replicated offsite on a daily basis. (And also stored for much longer than just the typical 35 days.)
But if your managed server hosting provider has only one data center, how will you achieve these objectives? And even worse, what if they're only offering legacy tape backup solutions?
Such unplanned limitations can become major roadblocks for expanding SaaS companies. That's why Online Tech has three managed and inter-connected data centers in Michigan, separated by up to 50 miles, for geographic disaster planning and recovery.
For example, you might begin with dedicated servers and a managed backup server in the same data center.
Then, as clients and data traffic increase, your business model requires that backup data is securely replicated offsite on a daily basis. (And also stored for much longer than just the typical 35 days.)
But if your managed server hosting provider has only one data center, how will you achieve these objectives? And even worse, what if they're only offering legacy tape backup solutions?
Such unplanned limitations can become major roadblocks for expanding SaaS companies. That's why Online Tech has three managed and inter-connected data centers in Michigan, separated by up to 50 miles, for geographic disaster planning and recovery.
6) Proactive Customer Service: Who's Watching Your Back?
Nothing is more frustrating as a SaaS provider than getting little to no information about a service issue from your hosting provider.
The best hosting providers have a genuine and very visible culture of service that prevents this from happening to their clients. Expect to see systems such as port-level network monitoring plus automated trouble ticket notification in the event of a service degradation or break/fix issue.
And any reputable provider will be following clearly documented guidelines for all aspects of configuration and change management. If you're not sure, ask to see these documents.
A key aspect of being proactive is that your managed server provider should be keen to work with you on dealing with software bugs before they cause issues for you both. So don't be surprised if their technical staff politely suggests that you work together to solve such problems.
The best providers will also show a willingness to help you with application upgrades by involving their network engineers and Sys Admin staff in minimizing the impacts of any service disruptions.
The best hosting providers have a genuine and very visible culture of service that prevents this from happening to their clients. Expect to see systems such as port-level network monitoring plus automated trouble ticket notification in the event of a service degradation or break/fix issue.
And any reputable provider will be following clearly documented guidelines for all aspects of configuration and change management. If you're not sure, ask to see these documents.
A key aspect of being proactive is that your managed server provider should be keen to work with you on dealing with software bugs before they cause issues for you both. So don't be surprised if their technical staff politely suggests that you work together to solve such problems.
The best providers will also show a willingness to help you with application upgrades by involving their network engineers and Sys Admin staff in minimizing the impacts of any service disruptions.
7) Make Sure Your 'Data Bank' is Regulated and Secure
The Internet has given a whole new meaning to the idea of a 'data bank'. For SaaS providers, it's becoming mission-critical that a trusted business partner securely and reliably hosts their customers' data.
To some extent, managed dedicated servers hosted in an outsourced data center have now become a trusted data bank on which the SaaS business model depends.
That partly explains why many SaaS providers are being required to achieve PCI compliance or HIPAA compliance, as well as periodic and detailed audits of their systems, such as a SAS-70 audit.
Online Tech has already been successfully audited to the SAS-70 standard in 3 different data centers. You can therefore have confidence that our infrastructure solutions will meet and exceed regulatory requirements.
To some extent, managed dedicated servers hosted in an outsourced data center have now become a trusted data bank on which the SaaS business model depends.
That partly explains why many SaaS providers are being required to achieve PCI compliance or HIPAA compliance, as well as periodic and detailed audits of their systems, such as a SAS-70 audit.
Online Tech has already been successfully audited to the SAS-70 standard in 3 different data centers. You can therefore have confidence that our infrastructure solutions will meet and exceed regulatory requirements.
Conclusion
Apply these seven tips when choosing a managed dedicated server-hosting provider for your SaaS business and you'll, increase your uptime and minimize your frustrations with your server infrastructure. This lets your team focus on the highest value-add portion of the SaaS business model – the application and your users’ experience.Find additional information on Online Tech's SaaS hosting services including colocation and managed dedicated server offerings or visit our home page.
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