Software Escrow

Check out this great article from the Software Advice teamhttp://blog.softwareadvice.com/articles/enterprise/the-cloud-and-why-installed-software-isnt-going-away-1013112/ .  It is a good summary of the forces keeping installed software around as cloud computing continues to emerge.  I too believe installed software will stick around.  In many instances it is a better fit for enterprises.  I have worked with EscrowTech over 13 years and witnessed the emergence of cloud computing.  In the cloud environment the vendor is exposed to additional inherent financial and business risks than with traditional “installed” Software.

One example – The SaaS user no longer obtains “ownership” or access to their unique customer data.  In traditional software this customer database resides on the user’s computer not in the cloud on the SaaS vendor’s servers.  Recently I received a call from a SaaS user who had been using a CRM SaaS solution for the past five years.  The SaaS user decided it was time to move to a more robust software solution from a different software vendor.  According to the SaaS user the current SaaS vendor held their customer data “hostage.”  Because the SaaS user no longer agreed to pay the SaaS vendor, the SaaS vendor was unwilling to release their customer data to them.  The SaaS user was forced to either stick with an unsuitable SaaS solution or move to a new solution and lose access to their customer data.  The SaaS user ended up suffering the loss of losing customer data and migrated to a new SaaS solution.  We set up a SaaS escrow with the new SaaS vendor to protect the SaaS user from experiencing this same situation again.  https://escrowtech.com/saas_escrow.php

When a SaaS customer adopts a SaaS solution over a traditional software license the customer may no longer have possession and control over its data residing on the servers and storage devices of the SaaS vendor.The customer, as a subscriber to the SaaS solution service, is vulnerable to inherent risks of the cloud and a SaaS business relationship.

SaaS customers are faced with the reality of these risks:

  • Sudden temporary or long term loss of access to SaaS services, applications and data due to legal and financial disasters such as SaaS vendor bankruptcy, insolvency, business discontinuation, contract termination, legal disputes, litigation, and deteriorating business relationships.
  • Their own SaaS data being corrupted or lost by the SaaS vendor.
  • The need to comply with internal policies and external regulations that are not met by the current SaaS vendor’s practices and capabilities.

A traditional SaaS storage escrow can provide assurance to the SaaS customer that it will have access to the SaaS application (source code and object code) and SaaS data if a release condition should ever arise.In this type of escrow, the SaaS application, build environment, implementation instructions, and any other desired materials are stored in escrow along with timely deposits of the customer’s SaaS data.Upon the occurrence of a contractually-agreed-upon release condition, the deposits materials (e.g., the SaaS application and SaaS data) will be released to the SaaS customer.The SaaS customer is then able to install and use the SaaS application to assist it in continuing operations that were dependent on the vendor’s SaaS solution.The SaaS customer will also be able to recover and use its data from the escrow.

In instances where immediate or prompt access to the SaaS solution is required, only a complete SaaS data center escrow is sufficient.In a SaaS data center escrow, the SaaS application and data are hosted on servers and storage devices at an Escrow Data Center.The SaaS application is continually populated with the customer’s SaaS data.In effect, a mirror of the SaaS solution is held at the Escrow Data Center.If a release condition occurs, the mirrored SaaS solution can be brought online for access and use by the customer.The SaaS customer is then able to continue operations without losing access to a functioning SaaS solution and its SaaS data.

There are significant motivators for software users to transition from traditional software licenses to SaaS solutions accessed over the Internet. In many instances the risks described above have inhibited some customers from adopting a SaaS solution. SaaS escrows can eliminate or substantially mitigate those risks for customers. SaaS vendors can also benefit from the adoption of SaaS escrows because these escrows proactively alleviate the concerns of prospective customers. By proactively protect the interests of customers when a SaaS vendor escrows its SaaS solution, the SaaS vendor provides a more reliable solution and addresses what may be the unspoken reservations of a prospective customer.

To learn more about EscrowTech’s various levels of SaaS Escrow solutions watch https://escrowtech.com/video_saas.php.

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