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How Safe is Your Data if the Hosting Company goes into Administration?

Data is a valuable resource in any organisation. It makes sense, therefore, that protecting and securing data is a priority. And, with many organisations now having comprehensive disaster recovery and business continuity planning in place, it’s easy to see why they think they’ve covered every eventuality. But, this is not always the case. In fact, after 2e2 slipped into administration in January this year, it emerged that organisations using their hosting services had difficulties accessing their data. Many were left paying between £4000 and £40000 a week, just to maintain access. Clearly not an ideal solution- especially if budgets are tight.

So, why has this problem emerged and what can organisation do to ensure they are not vulnerable if their hosting company goes into administration?

Why has this problem emerged?

Traditional software arrangements between a specific organisation and software company are being supplanted as a result of SaaS solutions. One of the big drives behind cloud migration is cost-savings. When you are running software on site, you need to manage all parts of the system- servers, backups, maintenance. SaaS options, however, mean that some of these tasks are handled by the provider, which can make it a more affordable solution.

The potential downside of this comes from the more complex supply chain associated with cloud solutions. Instead of just dealing with the software company, you rely on both the software provider and the hosting company. This, inevitably, opens up more potential points of failure. As cloud adoption becomes more widespread, there are potentially more organisations than ever before who would be vulnerable should their hosting company or software provider go into administration.

A major part of this problem is an ‘It won’t happen to us’ mentality, which means that appropriate protection is not implemented. If hosting companies or software providers get into financial difficulties or are placed in administration, there are not normally procedures in place to ensure continued data access. This could happen if a software provider doesn’t pay its bill or the hosting company cannot meet its financial obligations. All of this results in organisations being exposed, unable to access their data or maintain business as usual.

What are the options to protect yourself if your hosting company goes into administration?

If organisations are choosing to use cloud services, then there are precautions that they can take. Organisations can elect to have a SaaS Escrow agreement. This would mean, should your hosting company go into administration, access to your data would be maintained. (Not all SaaS escrow agreements are proactive. As far as we’re aware AccessAssure is the only one that doesn’t rely on additional backups to maintain access to data. Key to AccessAssure is that the agreement starts working before the company goes into administration. So you are able to deal with the issues while the company and its employees are still around.

If any of 2e2’s customers had an AccessAssure SaaS Escrow agreement in place before 2e2 went into administration, then they would have enough time to plan data backups and plan a strategy for moving forward. They would not have been vulnerable to data loss or the expense of maintaining data access. A key element in the Access Assure agreement includes financial monitoring, so organisations can be forewarned if their hosting company or software provider is in financial difficulties. It also ensures that should a trigger point be reached that there is contractual recourse to facilitate the protection of business critical data. This advanced warning would give enough time for organisations to make the necessary plans to prevent any disruption. It also means that organisations can save additional money, by avoiding unnecessary backups when there is no risk to their service being disrupted.



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