Tuesday’s Tip: Now’s The Time To Consider SaaS Software Escrows
With 2009 rapidly becoming the “Year of SaaS” and the tipping point for Cloud Computing, it’s hard not to notice the growing number of SaaS start ups (along with the legacy application vendors rushing to provide an “On-Demand”, but not really multi-tenant deployment option). My snarky SaaS bigotry aside, we can expect hybrid deployment options to be here to stay. As with the early days of on-premise packaged apps, we have to ask the question, “What to do about the risk in working with fly-by-night SaaS vendors who might not be around in 2011?” In fact, this was an interesting part of the panel disucssion at the “Honeymoon and Divorce: Changing SaaS Providers” session at Interop with Jerry Smith (CTO of Symphony Services) , Michael Topalovich, (CTO of Delivered Innovation), and Rick Nucci (CTO of Boomi).
SaaS escrows provide a key safety net for the SaaS users
End users often demand software escrows in the on-premise world when they are concerned about vendor viability, takeover threats, and other related breaches to performance or service level agreements. Software escrows vendors serve as the trusted third party independent organization which holds a copy of the software code. This often includes user data, source code, documentation and any application executables. For SaaS escrows, expect a few unique distinctions such as:
- More frequent intervals of version updates, almost similar to live data backups.
- Hot backups that the end user can immediately and legally swap to the escrow version without business disruption
- Requirements for SaaS vendors to provide detailed software configuration management and data management
The bottom line - SaaS code is rented so protect yourself
With no access to the code or application when a SaaS vendor goes bankrupt or fails to meet performance requirements, now’s the time to ask your SaaS provider if they provide a SaaS software escrow. This should be included in all criteria during SaaS vendor selection. Those who provide SaaS escrow deliver an additional benefit - peace of mind that data will be doubly backed up both by the vendor and the software escrow company.
Companies providing SaaS Escrow Services
Here’s a list of a few vendors in the market. They have not been rated or reference checked so caveat emptor. If you provide SaaS escrow services and weren’t listed, feel free to add a comment to the post.
- EscrowTech (Added 6/3/2009)
- InnovaSafe
- Iron Mountain
- NCC Group
- OpSource
For more about how to shape your apps strategy to include SaaS, read the Forrester Report found here.
Your POV
Have you worried about whether your SaaS vendor will be around in 2011? Did you successfully enter into a SaaS Escrow agreement? Considering a SaaS Escrow? Send me a private email to rwang0 at gmail dot com. Posts are preferred! Thanks and looking forward to your POV!
Copyright © 2009 R Wang. All rights reserved.
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| Tags: , boomi, Business Models, Delivered Innovation, deployment options, Enterprise 2.0, enterprise applications, enterprise apps, Enterprise apps strategy, Enterprise Business Apps, Enterprise Business Apps Vendors, Enterprise Software, hybrid deployments, InnovaSafe, Iron Mountain, IT Services, IT Strategy, Jerry Smith, lessons learned, Michael Topalovich, NCC Group, OpSource, PaaS, R "Ray" Wang;, Rick Nucci, SaaS, SaaS escrow, Software as a Service, Software Ecosystems, software licensing, software trends, software vendors, sourcing, support, Symphony Services, Trends, Tuesday's Tip, Vendor Selection, vendor strategy, | Categories: Business Models, Delivered Innovation, Enterprise 2.0, Enterprise Business Apps, Enterprise Business Apps Vendors, Enterprise Software, Enterprise apps strategy, IT Services, IT Strategy, InnovaSafe, Iron Mountain, Jerry Smith, Michael Topalovich, NCC Group, OpSource, PaaS, R "Ray" Wang;, Rick Nucci, SaaS, SaaS escrow, Software Ecosystems, Software as a Service, Symphony Services, Trends, Tuesday's Tip, Vendor Selection, boomi, deployment options, enterprise applications, enterprise apps, hybrid deployments, lessons learned, software licensing, software trends, software vendors, sourcing, support, vendor strategy
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[...] code. This often includes user data, source code, documentation and any application executables. SaaS escrows work in a similar way. Vendors such as EscrowTech, InnovaSafe, Iron Mountain, NCC Group. and [...]
Hi Ray- I don’t know whether you got my previous comment as my internet died halfway through posting… iPhone tethered
Anyway- I thought there were some interesting comments here in the Linkedin SaaS group.
http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=122612&discussionID=1756814&sik=1259584154135&trk=ug_qa_q&goback=.ana_122612_1259584154134_3_1.afs_122612_1259584154135_1
Hi Ray
There were a few interesting comments on this in the LI SaaS group here:
http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=122612&discussionID=1756814&sik=1259584154135&trk=ug_qa_q&goback=.ana_122612_1259584154134_3_1.afs_122612_1259584154135_1
[...] going under and competitor GoodData offering free safe harbor. Is now the time to make sure SaaS escrows [...]
[...] Security will be built along the way, as will best practices on things like Escrow and mechanisms to migrate from one service provider to [...]
Amit,
good points. however, what do I do with the meta data? I’m renting apps on SaaS and if they shut down, all context may be lost. Anybody have an alternative to SaaS escrows that would also allow you to “rent” the shell and add your data?
R
Good point Ray!
Definitely with you on the challenge, but I don’t believe code escrows are the solution.
SaaS or not, I have yet to see the buyer that can take over foreign code and make it work, let alone support it over time. I have worked for quite a few software companies, and I know how hard it is to bring in new developers and familiarize them with existing code base. Now imagine doing this for an entire team at once. I think a more modest, but practical approach is to make sure you can always pull your data, that you are given enough notice, and that you can recover unutilized support or subscription fees.
My $.02
We have great interest in SaaS solutions. Not sure if companies will survive economy. Will SaaS escrow keep software running if company goes bankrupt. Who do we pay maintenance if SaaS vendor fails? Do we pay these escrow companies the right to use the code? Does anyone know the answer?
Majid
[...] This post was Twitted by CPA_Trendlines - Real-url.org [...]
Hi Tucker,
Thanks for your comment. As we mentioned, we knew we were probably missing a few companies in the mix. We do see EscrowTech a lot in the non-SaaS market. Now that we know, we’ll be adding you to the list!
R
Great post Ray. It is interesting to see how more and more the software escrow industry is trending towards offering SaaS specific solutions. I am glad to see as an industry that we are moving to support the changes in how software is provided.
With SaaS escrows it is also critical to consider if the client’s data needs to be included as part of the escrow or not. In some situations the vendor will provide the client with the data (for free or at a cost) but other vendors will not. If the vendor does not provide access to the data then that data will need be included as part of the escrow. Many SaaS applications are of little value without the client’s data. The data requirement could result in the need of weekly or daily escrow deposits (far different than the traditional software escrows where deposits are quarterly or yearly).
I am a bit surprised/hurt that you did not include EscrowTech in your list of vendors (disclaimer - I am associated with EscrowTech). They are one of the industry leaders in the US when it comes to software escrow solutions and this includes SaaS escrows.