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Does my business need Software Escrow or something else?

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shutterstock_321052340Running a business requires a vast amount of skills and planning and most business owners today use software for at least one aspect of their business management.

Software Escrow Agreements are a way for businesses to protect their software provision and are part of any good disaster recovery strategy. They allow a business to access the software code in order to keep the software up and running if, for example, the software provider goes bankrupt or fails to provide a good service.

But what type of Software Escrow Agreement does your business need?

Traditional Software Escrow Agreement

This traditional agreement is between the Software User, Software Vendor and an Escrow Agent. It offers business owners protection if their Software Vendor fails to provide their software for a number of reasons such as insolvency or ceasing to trade.

In essence, this allows businesses to continue to use and maintain essential business software should anything happen to the Software Vendor., preventing ‘blank screen’ syndrome.

SaaS Escrow Agreement

More and more, businesses are turning to cloud based software. In the past, software would be downloaded to a computer or a server somewhere within the business.

With cloud computing, businesses can access their software through the internet.

Using cloud based software can bring a range of benefits including flexibility if business needs demand more or less bandwidth, automatic software updates and lowering of hardware costs.

But using cloud based software doesn’t change the need for a Software Escrow Agreement – businesses using this type of software will still need the right to use their software should something go wrong with the software provider or the third party hosting provider.

When using cloud based software, a normal Software Escrow Agreement between the user and the software provider simply isn’t enough

A SaaS (Software as a Service) Escrow agreement is an agreement between the three parties involved in the business’ software – the Software User, the Software Vendor and a third party hosting provider. This type of agreement is vital if business owners want to make sure that the software that is essential to their everyday business is not interrupted or lost altogether.

Without a SaaS Escrow agreement in place, a business owner could open up their computer one morning to find that not only is their software not working, but they have also lost all of their business critical data.

Businesses can, and do, go out of business in situations such as this.

With no software or data on any internal servers or computers, the outlook can seem extremely bleak.

Having this agreement in place protects businesses from this situation.

Whatever type of software your business uses, whether it’s cloud based or based on your computers and servers, having a Software Escrow Agreement can provide added peace of mind that should the worst happen and you come in to find your software and data has vanished, you have the necessary legal protection to continue to run your software and retrieve the lost data.

Which means if your software vendor goes out of business, you don’t go out of business with them.

 

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