5 Tips to Avoid a SaaS Contract Nightmare

5 Tips to Avoid a SaaS Contract Nightmare
Image credit: Shutterstock

Grow Your Business, Not Your Inbox

Stay informed and join our daily newsletter now!
Co-founder and CEO of Bluecore
3 min read
Opinions expressed by Entrepreneur contributors are their own.

Your business may use 20 or more software-as-a-service (SaaS) vendors to manage a variety of company functions. You may use Github for source control, Google App Engine for hosting and serving applications, Zenefits to manage employee benefits, Gainsight for client success management and more.

The process to determine which one is right for your business is a long one with multiple sales pitches to hear before implementation. If you participate in these sales demonstrations, especially those for highly technical products like cloud hosting or accounting software, you might notice a disconnect between what's sold in the sales process -- when vendors tend to promise the moon -- versus how the product performs when delivered.

Within the context of emerging technology, buying cloud infrastructure can be confusing when it comes to sorting out the difference between the flash of a sales pitch and the reality of product performance in everyday use. Unfortunately, it's easy to get locked into an undesirable contract before any pitfalls can be detected.

Related: 6 Leaders Share the Secrets to SaaS Startup Success

Here are five tips to help you wade through the sales pitch and discover whether what's being offered is worth it for your company:

  1. Ask the representative conducting the sales demo to bring an engineer onto the next call. You don’t want a “sales engineer,” but someone who works on and understands the value of the core product. Companies that conduct a sales pitch that truly represents how the product performs will happily oblige.
  2. Ask for several demos right at the beginning of the call. Don’t rely on PowerPoint decks, which can depict an unrealistic, ideal world. These presentations are usually crafted by sales teams and rarely include valuable product information.
  3. Ask the sales rep for an example of their slowest deployment (not just their fastest one) to ensure they are being honest. Slow deployments aren’t necessarily bad -- everyone has hiccups -- but a team that's willing to talk about it is likely one you can trust on other aspects of the sale.
  4. Beware of integrations that supposedly seamlessly connect with every technology on your stack. Historically, more than 70 percent of all enterprise software solutions have failed in this aspect, and there's little reason to believe your situation may be different -- without all of these companies accepting standard data formats or APIs.
  5. Always check references, particularly when dealing with someone who has only recent experience implementing the product. The pains of integration (not to mention what happened during the sales process) are usually forgotten by stakeholders a year into usage, so recent familiarity is important.

Making sense of an over-the-top SaaS vendor sales pitch and gleaning usable information from it can be challenging. Taking the time to follow the steps above can make the difference between regretting your agreement to a sub-par contract and truly finding the right solution.

Related: 10 Questions to Ask When Choosing a Cloud Provider

More from Entrepreneur

We created the Start Your Own Business (SYOB) course to help you get started on your entrepreneurial journey. You will learn everything you need to know about testing the viability of your idea, writing a business plan, raising funds, and opening for business.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Create your business plan in half the time with twice the impact using Entrepreneur's BIZ PLANNING PLUS powered by LivePlan. Try risk free for 60 days.

Latest on Entrepreneur