SaaS is a giant umbrella term, covering everyone from the big players like Salesforce and Shopify, to each new start-up currently incubating in a tech accelerator. The global SaaS market hit $272B in 2021, and is expected to reach almost $437B in 2025. Investors, industry regulators, vendors, and consumers alike all have their eye on this market, and are ready to be a part of the climb up. All vendors are attempting to create the perfect recipe to have their information security boosts B2B SaaS sales.
2021 was the year of the QR code, the switch from Facebook into Meta, and the continued rise of the vendor security questionnaire for B2B SaaS applications. Knowing the risks of an attack may help make sense of why vendor security requirements are increasing, but it doesn’t explain the full steps of how we got here.
For any venture-backed B2B SaaS start-up or scale-up, investor appeal is one of the most prized factors that can make or break your business. Among many other things, investors want to know that your business can make money. And to make money, your business needs to be able to secure B2B business deals.
To secure B2B vendors, you may need to prove compliance with industry standards and/or complete a security questionnaire outlining how your application will be able to handle their data securely. Some proof, such as a certificate of compliance or penetration testing certificate, is often needed to secure the deal. Often, these requirements change as industry standards are updated, new risks surface, and technological innovations develop. Each vendor may also have unique requirements, depending on their internal policies, industry, and size, among other factors.
Achieving the security requirements of B2B vendors allows you to land the deal and generate revenue. When you have B2B sales growth, you have success. So the snowball continues, allowing you to build more investor appeal, close more deals, and scale your business. And as such, vendor security questionnaires become more common for both you and the enterprises you hope to work with.
According to PWC’s October 2021 report, 46% of enterprises have audited or verified the security posture and compliance of third party or suppliers. Additionally, 42% recently changed their criteria for onboarding and assessing the security risk of third parties, and 40% even re-wrote contracts with third parties to mitigate risks.
It’s almost obvious to say that securing B2B enterprise deals is vital. As such, it's important to understand why vendors ask for a security questionnaire, the most frequently asked questions, and best practices for your industry will help ensure that you are a low-risk, easy choice.
Incorrectly responding to a vendor security questionnaire or inefficiently managing multiple requirements can be associated with increased costs. Direct costs include delayed sales timelines, increased legal review time and lost sales from incorrect or incomplete responses. Other potential costs include regulatory fines, lawsuits, civil or criminal penalties, or negative media exposure if you answer a vendor security questionnaire to make it seem like you have better information security practices than you actually do (and you get caught on it when there’s an attack which leaves them exposed).
Here’s a guide on the four most common security control questions asked, and how to respond.
Security is no longer optional, and most B2B businesses are engaged in some form of application security. What helps you stand out?
A reactive, test-as-needed approach slows your sales cycle. It means waiting for results before you can close a deal. It potentially means some uncertainty in responding to your vendor security questionnaires. And ultimately, it can lead to the enterprise vendor feeling doubtful that they may not get the right results from you in the right time frame, and decide to move on to another SaaS provider.
As the SaaS industry grows and organizations are quickly adopting more digitized tools and processes, the relationships between vendors and suppliers have become more cognizant about the information security implications included in each new tool or platform. You can show your readiness to engage in B2B enterprise deals by having a proven secure application. Regular audits, compliance checks, and penetration testing as a service (PTaaS), are year-round ways to ensure your application security is up to par.
Additionally, training your developers on best security practices ensures that your team is knowledgeable on how to write secure code. It will be easier to understand your application’s security controls, identify risks, and patch vulnerabilities on your own.