• Legal Escrow & Arbitration Services Ltd.

    Escrow news

What’s The Real Disaster – A Service Outage Or A Bankrupt Provider?

Three years ago, public cloud services seemed plagued by unplanned outages and many businesses were understandably wary about entrusting key business functions to the cloud.

Today, the top tier SaaS providers such as Google and Amazon Web Services have improved their act and some now approach the Holy Grail of offering 99.999 percent availability, which translates into just 5 minutes of downtime a year, according to website tracking firm CloudHarmony.

That’s good news for the growing number of customers prepared to trust SaaS for business-critical applications.

For if a business were to lose access to a key SaaS application, such as a financial system, for even a few hours, the consequences in terms of disruption, lost productivity and customer dissatisfaction could be dramatic.

Fortunately, cloud computing offers a variety of ways for businesses to mitigate the effects of SaaS outages and failures. In some cases, for example, it may be economically justified to use two different SaaS providers to protect against the cost of outages. Some more disaster recovery strategies for the SaaS era are described here.

But it is important to keep the risk of SaaS outages in perspective.

To be sure, there will be a short-term impact that results in disruption, extra work and maybe some lost revenues. But the impact will typically only last a few hours or, in the worse cases, a couple of days. It is unlikely to turn into a disaster.

But if your SaaS provider suddenly goes out of business, then the damage can be permanent. If the provider’s computers are turned off and no-one answers the phone, then you may have no practical way of recovering customer data or other business-critical information in possession by the now-bankrupt provider, irrespective of what the terms of the contract say.

As escrow agreement protects your rights and ownership of proprietary data and ensures that, if your SaaS provider does stop trading, it does not turn into a disaster for you.

Share it now!
This entry was posted in Agreements, Escrow transfer, SAAS Escrow. Bookmark the permalink.