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The Cloud and Software Escrow: A match made in heaven?


The Cloud is everywhere, literally, and we use it for everything from social media uploads to accessing documents and emails on the go. Cloud-based technology is far more than just a convenient tool to keep connected, the latest developments enable companies to not just communicate with clients across the globe, but also operate their business from virtually any location in the world thanks to web-based software. Software developers are capitalising on the increasing popularity of Software as a Service (SaaS), as savvy business owners are choosing instant access to software wherever and whenever they need it rather than buying and installing software. Almost all standardised software services are now accessible via Cloud technology, and as SaaS is considerably more cost effective than buying software outright, it is now considered the go-to method of using business critical software on a daily basis.

Can Software Escrow apply to SaaS?

Software Escrow serves to protect businesses should their software provider fail to update their software or meet their needs in the event of the provider going into administration. Businesses relying upon operational software benefit from the implementation of escrow agreements because should the agreement between the end user and the software supplier be breached, the end user will gain instant access to the source code and be able to swiftly host it and develop it elsewhere to maintain continuity of service.  In theory, this is a fool proof way to protect your business-critical software, however, SaaS and cloud based services are a very different ball game. With cloud or web-based services you basically have access to your software via a link or application that is hosted elsewhere, meaning that you never actually own or install a copy of the software. Although this provides great savings for astute business owners, it can prove more challenging when it comes to protecting your business-critical software in the event of an emergency.

How do you protect something you do not have?

Quite simply, the answer is with some difficulty, depending on your cloud provider. Traditional software escrow would be implemented in the case of an emergency with custom built installed software as this gives the end user access to the source code so that the software can be rebuilt in the event of an emergency. However, with cloud based services, the end user never has access to the software itself, much less the source code to recreate it.

The ideal solution would be for the cloud service supplier to create a copy of a virtual server complete with SaaS application and preferably your company data to boot. This would pretty much serve to act as a conventional software escrow agreement in that you can continue to host and develop your business-critical software should the agreement be breached. However, this option is not offered by all cloud service providers, and even if it is, this can prove a costly option if you are updating code and data on a daily basis. If there is no such provision available, SaaS users would need a rapid alternative server set up where they can host the current SaaS application to buy them some time while they figure out the next steps.

Accessible Software Escrow

As an End User, you will likely already be paying for an agreed level of business protection such as Disaster Recovery and Comms Failures, so to pay an additional premium on top just in case your software provider goes out of business can become incredibly expensive.

This is where LE&AS’ AccessAssure Agreement can help. This agreement has been specifically designed for SaaS based applications and has key trigger points which ensure additional back up services are implemented at the relevant time with a relevant cost. In short dealing with the situation before your Software or Hosting Provider goes out of business.

As a business owner, you need to safeguard your business investments wherever possible to maintain continuity of service for your clients. Software escrow for SaaS is undoubtedly one of the best ways to protect both your business-critical software and your valuable client data, so if your current cloud or web-based service provider isn’t compatible with an escrow agreement, then maybe it is time to revise your technology services.

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