As a SaaS vendor we get these questions all the time. So I'm sharing our answers. Just say yes.

1. Sticker shock – Salesforce.com is almost getting too big for its own britches. I recently read about new licensing from them that was ominously as confusing as traditional enterprise software terms. However, Gartner’s David Coyle recently called out SaaS licensing as the most significant innovation in the IT service desk software market after years of confusion at the hands of industry incumbents. Service-now.com licensing is simple by design. In fact, we guarantee that the cost of one Service-now.com license will be 80 percent of the cost of one HP Service Desk or BMC Remedy annual maintenance fee.

2. IT in the decision making process – Isn’t it about time IT gets some SaaS love. Sales, marketing, HR, payroll…they all got their SaaS love. We sell to the IT guy who wants to know which server is running the mission-critical app, the help desk worker who doesn’t want to fight the software while trying to help the end user, the CIO looking to adopt ITIL processes.

3. Is SaaS mature enough? – Check customer references. There is safety in numbers. Also, keep in mind that SaaS development maturation is not on the same slow and tedious timeline as traditional enterprise software. While HP is acquiring competing technologies, deciding which one to end of life, figuring out how to provide orphaned customers with a migration path, all while trying to support thousands of legacy customers on dozens of different versions of the same product, SaaS vendors like Service-now.com swiftly leverage agile development platforms to deliver multiple upgrades per year to customers who are all on the same version of the software. Keep in mind, true SaaS is not a new subscription licensing model, warmed-over ASP or a client/server application with a Web front end. SaaS that was born on the Internet and is delivered over the Internet is fundamentally different than legacy pretenders.

4. TCO – Service-now.com has been in business for four years, we have about 215 enterprise customers and we are cash flow positive. We are living proof that the TCO model for a SaaS vendor is realistic. As for the TCO of SaaS for the customer, this is a no brainer. The customer pushes all care and feeding of software to the vendor. We guarantee that our annual subscription license cost will be 80 percent of the cost of a traditional vendors annual MAINTENANCE fee. We also guarantee that implementation cost and time will be 25 percent of what it would take to do the same implementation of a traditional HP or BMC software product.

Do you need to keep your data on site? The Service-now.com instance can be hosted in our datacenter or the customer’s datacenter. Either way, we still maintain and update the software. We have large financial customers who require that electronic customer data remain in the country of origin. So in this case the customer is hosting the instance, the database and the data while we provide the software and maintain it remotely.

5. Integration – We use the power of Web services and crowdsourcing to address integration issues. It is much easier to integrate through open, Web services than it is through a legacy, proprietary API. We’ve already provided about 30 out-of-the-box integrations to our customers’ systems management products. As our customer base grows, we’ve seen more of the crowdsourcing phenomenon, in which customers develop integrations on our platform and then publish them for peers to use.

SaaS has come a long way. We've even posted many other SaaS myths we've heard along the way on our website at: http://www.service-now.com/different/myths/ Of course, we also take the opportunity to bust those myths as well.

Additional considerations:

6) Data Security - How can the SaaS provider guaranty your proprietary data is handled in the way YOU want? Can they 100% guaranty that none of that data will ever be accidentally available to competitors?

7) Exit Strategy - Is there a data migration capability that will allow you to take the data and data relationships to another provider if you decide to migrate in the future?

8) Out of Business - What happens when there are accounting issues or an SEC raid at the company and it is forced out of business almost immediately, along with all your data?

Be certain to place your requirements in the contract too.