While SaaS data storage offers immense scalability, relying on third-party providers introduces organizations to five critical risks that can jeopardize business continuity. Mitigation requires proactive governance, from securing independent backups to establishing clear exit strategies.
- Vendor Bankruptcy: Mitigate service discontinuation by implementing a SaaS Escrow agreement to secure access to application source code and data.
- Data Breaches: Bolster SaaS security posture by vetting provider compliance certifications and enforcing Multi-Factor Authentication (MFA).
- Inadequate Backups: Do not rely solely on the vendor’s infrastructure-level backups; maintain an independent SaaS data backup outside the platform.
- Governance & Lock-in: Reduce compliance risk through centralized SaaS data management and ensure data portability via clear export and termination clauses.
Have you migrated your business’s critical operations to the cloud? You’re probably aware that SaaS data storage has become the backbone of modern enterprise infrastructure. After all, the cloud offers unmatched flexibility and scalability. But entrusting mission-critical data and operations to a third party introduces its own set of risks.
What if your SaaS provider experiences a cyberattack or technical failure? What if they face financial insolvency or discontinue support?
To maintain business continuity, organizations must anticipate and mitigate the risks. Below, we discuss the top five risks associated with cloud-based applications and how to mitigate them effectively.
1. Vendor Bankruptcy and Service Discontinuation
The most overlooked risk in SaaS data protection is the vendor’s financial stability. If your SaaS provider goes out of business, you could lose access to your data and the software you need to read it. This is a catastrophic scenario for subscribers relying on that software for mission-critical operations.
To mitigate this risk, implement a SaaS Escrow agreement. This contractual safeguard ensures that if the vendor fails, you gain access to the application source code as well as the data and structures necessary to restore service.
2. Data Breaches and Unauthorized Access
A SaaS data breach can harm a company’s reputation and incur massive fines. Because most SaaS platforms operate on shared infrastructure, a single misconfiguration or vulnerability can expose sensitive information across multiple tenants.
We recommend assessing your SaaS provider’s security posture by vetting their provider’s compliance certifications (such as SOC 2 or ISO 27001). Additionally, ensure your internal team enforces Multi-Factor Authentication and access controls.
3. Inadequate Backup and Recovery
Many users believe that SaaS providers automatically guarantee a full SaaS data backup. In reality, many providers back up data for system resilience, not individual account recovery. If a user accidentally deletes a critical file, it may be gone forever.
To mitigate this, always clarify the provider’s disaster recovery (DR) terms. Ideally, you should maintain an independent backup of your data outside of the SaaS platform, too.
4. Poor Data Governance and Compliance
SaaS data management becomes increasingly complex as data volume grows. Without clear policies, businesses risk violating privacy regulations like GDPR or CCPA.
The solution is to centralize your SaaS procurement and oversight and conduct regular audits. It’s the best way to ensure all stored data adheres to your industry’s regulatory standards.
5. Vendor Lock-In
Vendor lock-in is when a customer cannot easily transition to a competitor. Typically, this is because their data is stored in a proprietary format or retained under terms difficult to export.
To mitigate this, carefully evaluate the “termination assistance” clause in your contract. Ensure there is a defined process for exporting your data in a standard, usable format.
Secure Your Business Continuity with EscrowTech
The cloud is powerful, but it requires a safety net. By addressing these risks upfront, you can enjoy the benefits of SaaS without exposing your organization to threats. EscrowTech can help. Explore EscrowTech’s SaaS escrow solutions to protect your application source code, data, and operational environment—and ensure your business can continue regardless of what happens to your vendor.