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‘Cloud’ is the new black. Cloud computing has emerged as the principal approach for reducing escalating operating costs, managing complexity and driving business integration and alignment. As more businesses turn to cloud computing, Independent software vendors (ISVs) and application developers must prepare to deliver more and more of their solutions on the cloud. 

The following is a guide to understanding the infrastructure and ecosystem on which cloud applications are built, and is structured around six key questions customers should be asking -- and which Software-as-a-Service (SaaS) application providers need to take note of when planning, building and delivering solutions to customers.

The cloud environment in which applications have been built will have major implications on the quality of service ISV and application developers will be able to offer. This will inevitably trickle down to the business consumer or end user. So before entering into any contractual agreements for SaaS cloud offerings, businesses need to ask the following: 

1. Integration: How does the vendor ensure the application’s compatibility with existing IT infrastructure and future extensibility?

To ensure quick setup and ROI (return on investment), the vendor needs to be able to demonstrate ease of integration with existing legacy systems, and other solutions you may wish to build into your systems in the future.

Some aspects to look into include customizability -- to dynamically adapt to changing business needs, scalability -- for growth in demand, and compatibility -- with other solutions on the market e.g. other applications developed on the same cloud ecosystem can offer add-on functionality should you need it.

2. Performance: What kind of performance and service level agreements (SLA) can the vendor offer?

Depending on what kind of processes are involved, you need to ensure that the proposed SaaS application is suitably aligned to business needs in terms of availability, transaction time, storage and performance.

To ensure security, look for transparency in situations where there may be a breach of service levels such as monitoring, operational and performance management, and ask for specifics on the vendor’s disaster recovery plan.

Also, with promises of transparency, scalability and performance, consumers need to ask what security and compliance practices they have in place to ensure confidentiality, integrity and availability of data. 

3. Service: Where are the vendor’s servers physically located? 

When selecting a cloud service, an important factor which many often forget to consider is the physical location of servers on which the application is based. This has a significant effect on processing speeds, lag times and network relays -- greatly affecting user experience.

A person in Thailand requesting access to an application hosted in the US is being sent data around the world and is likely to experience significant delays. For businesses, this could mean either a loss in user efficiency -- or worse -- sales.

To support future growth, businesses should look out for software vendors who rely on reliable cloud service providers. 

4. Pricing: What kind of contractual flexibility and price guarantees can the vendor provide?

Cloud computing offers many benefits in how software can be consumed and acquired, but much of this is driven by the vendor’s subscription model and speed of innovation.

Most vendors should be able to provide safeguards such as a standard annual termination for convenience, an annual usage level alignment for changing needs and seasonal peaks. If the application is to be used as an integral part of the business, it is also important to verify if the vendor can provide long-term price protection guarantees.