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How does moving software to the cloud affect escrow agreements?

Did you know that between January 2012 and June 2013 organisations increased their average monthly spend on the cloud by 45% [Source: Cloud Tech]?

This is not necessarily surprising. The advantages of cloud computing are well documented and many organisations are eager to benefit from these. But, there are also risks that come with using the cloud. The cloud is inherently different from traditional software. This means there are different requirements to consider when it comes to risk management and the type of escrow agreement you need. In short, traditional software escrow doesn’t work for cloud-based software. To mitigate the risks of using the cloud, organisations need to put in place specific measures that reflect the nature of the cloud.

Why doesn’t traditional escrow work for SaaS?

As cloud-based software isn’t stored on your local server, it means that a traditional escrow agreement won’t protect you if your software provider or hosting company goes into administration. Typically, with cloud-based software, you are completely dependent on your SaaS vendor and hosting company to maintain access to your software.

As organisations move to the cloud, they have to consider how this change will affect their relationship with their suppliers. Using the cloud means you’ll be relying on SaaS vendors and hosting companies that are external to your premises, all of which means you have less control.

Organisations need to consider how this change will effect  their risk management strategy.

Often, organisations believe their existing risk management plans are enough to protect them. They believe they are already protected from the risks associated with cloud computing because they have:

  1. A business continuity plan
  2. A disaster recovery plan
  3. Their source code is protected by the supplier
  4. Their supplier uses multiple servers

But what do you do if your SaaS vendor or hosting company goes into administration? Suddenly your access is gone. The software application is no longer available and you lose your business critical data. In fact, in this situation, you would be left with a blank screen and no way to reclaim our data 

What can organisations do to manage this risk?

But, there is a solution to this situation. While traditional escrow isn’t effective, there are SaaS Escrow products, like Access Assure, which do protect organisations against the risks of using the cloud.

Access Assure has been designed to protect end users, by ensuring that they have contractual recourse prior to either their SaaS vendor or hosting company going into administration. This protects against the risk of permanent loss of data and software, meaning your organisation isn’t put at risk because you decided to take advantage of the cloud.

To find out more about Access Assure and how it can help you protect business critical software, please contact us.


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