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Cloud adoption in the enterprise is increasing as more organizations realize the cloud's benefits, including lower costs, no downtime for software updates and scalability. But what makes an enterprise SaaS application truly enterprise-class?
Reliability and security are two of the most important qualities for SaaS tools. Companies that run their software on premises are able to store sensitive corporate information in their own infrastructures, which helps them keep that data secure. However, when it comes to SaaS, the software providers are responsible for keeping user data safe.
Consequently, it makes sense that security and data privacy are key capabilities in enterprise SaaS applications. Providers should also include features in their enterprise SaaS offerings that solve business issues and provide the availability and efficiency that are necessary in an increasingly challenging enterprise environment.
There is little doubt that companies are looking into SaaS -- usually in a multi-tenant model in which users from different organizations share the same instance of an application. SaaS is arguably the purest form of the cloud and the largest segment of the cloud market, with revenue expected to grow 22.2% to reach $73.6 billion this year, according to Gartner. In addition, SaaS is expected to reach 45% of total application software spending by 2021.
Here are the eight features software providers should include in their enterprise SaaS applications, according to several experts.
1. Security -- including privacy and GDPR compliance
Enterprise SaaS applications need to be secure and compliant with the General Data Protection Regulation (GDPR), the European Union law on data protection, said Matt Graney, vice president of product for Celigo, a vendor based in San Mateo, Calif., which provides integration technology to connect cloud applications.
"But I have wondered to which degree some enterprise software will meet the minimum requirements -- as in, it provides the full functionality needed to be compliant, but is hard to use -- versus solutions that make it so easy you can purge records with the simplicity of a single button," Graney said.
As these issues become more prevalent and distrust of technology increases, enterprises should be even more concerned about privacy and security.
"[Vendors] will need to capitalize not just on the related functionality, but also how easily that can be accomplished," he said.
George Lawrie, vice president and principal analyst at Forrester Research based in Cambridge, Mass., agreed that security is important.
"SaaS providers must of course comply with regulations like GDPR and secure the data against theft and the programs against unauthorized users," he said. "But, in my experience, enterprises look for something more. They want to determine the geography in which their data will be held -- sometimes for reasons of national security, sometimes for fear of future exposure to class actions."
Nick Brigman, vice president of digital strategy and client enablement at CompuCom, an IT managed services company based in Fort Mill, S.C., said one of the main advantages of using SaaS is that the software is perpetually updated, with instant upgrades, including security upgrades, for all users.
"Most SaaS providers who seek to deliver to midsize and large corporations in regulated industries most likely have embedded the costs and undergone the burden of security audits and attestations, such as SOX [Sarbanes-Oxley Act] compliance, PCI [payment card industry] compliance and so on," he said.
SaaS products are scalable and may be able to integrate with other SaaS offerings, according to Brigman. Enterprises don't have to buy additional servers or software as they grow; they only need to enable more users or increase transaction rates.
"But buyers must check the status of the named integration to ensure they are active, and not just on paper," he said.
A major attraction of cloud deployments is elastic compute and storage, which are enabling new types of services, such as predictive and prescriptive analytics or recommendation engines that use graph databases that previously required specialist hardware or an analytics group in the basement, according to Lawrie.
"SaaS apps need suitable design to support multithreading so that thousands of users can work in the same application simultaneously," he said.
Because most enterprises already have some SaaS and some on-premises apps, they will want to know how any further enterprise SaaS applications will interoperate with them, according to Lawrie. For example, "How will it guarantee the semantic integrity of common data -- e.g., my definition of net price and your definition? How will it guarantee completeness of shared processes?" he wrote in an email.
Graney concurred, saying every enterprise SaaS app should include a robust REST API.
"Your application no longer lives in isolation from other applications and business processes," he said. "For enterprise applications to be taken seriously, they need to be able to easily integrate with other applications as a company scales."
4. Identity management
Because SaaS applications tend to be siloed, managing user access and authorization is a mounting challenge. Therefore, one feature companies should look for in enterprise SaaS applications is the ability to link to single sign-on software or Microsoft Active Directory, according to Brigman.
"An enterprise can save time and multiple calls by linking the use of SaaS to existing identity management," he said. "This is exceptionally useful and cleaner when employees depart and you need to terminate privileges."
All enterprise SaaS applications should offer enterprise-level backup and recovery, including standard disaster recovery and redundancy, Lawrie said.
"There has to be a certain redundancy. There has to be a hot server standing by and the disaster [recovery] server has to be at least 100 or 150 miles away," he said.
Because not every company operates in the same way, SaaS offerings have to be highly configurable to support the unique processes of the users' organizations, said Carl Lehmann, an analyst at New York-based 451 Research.
"That means being able to craft workflows uniquely. That means being able to craft documents and forms uniquely. That means being able to set up messaging and alerts uniquely. That means to set up collaboration capabilities among the users basically on demand or as needed," Lehmann said.
A SaaS platform should be able to expose the performance of the processes within the SaaS application, what the business outcomes are likely to be, and how the SaaS application supports a company's key performance indicators, according to Lehmann.
"Oftentimes, businesses measure certain activities, cycle times, costs, quality [or] satisfaction," he said. "And I believe that SaaS applications need to -- in some way, shape or form -- assist the administrator in monitoring or meeting certain key performance indicators used by the department function in the organization that's using that SaaS."
8. Ease of use
It's a bonus if the purchase and implementation processes of enterprise SaaS apps are so easy they can be done entirely by line-of-business leaders instead of IT or operations, according to Graney.
"I'm the head of a line of business who has purchased tens of thousands of dollars in software and implemented it myself over the last few months without the need for full-time technical staff," he said.
Many companies don't want to spend money on IT staff and would rather allocate those funds to the core business.
"Vendors that have software that can provide enterprise capabilities but doesn't require a dedicated staff to purchase and implement it are the ones whose software will get purchased more frequently," Graney said.