Escrow for SaaS

SaaS (Software as a Service) is software that the vendor offers online. Users therefore do not have to install, manage and maintain the software locally themselves. They connect via the Internet to the application installed at the software vendor. That has benefits, but also risks-particularly for users’ business continuity. Escrow for SaaS is aimed at that.

SaaS Escrow

What is the biggest risk of a SaaS service?

The risk of complete loss of the software application and any data is greater than with software running locally (on-premises). This is because the software of a SaaS service is not installed at the software users’ premises, but at the vendor’s premises. That manages, maintains and hosts the application or has it hosted by a hosting party or cloud platform such as Microsoft Azure, Amazon Web Services (AWS) or Google Cloud. So it is important to be able to continue the service (temporarily) if the software provider or SaaS vendor is no longer able to do so.

What is escrow for SaaS?

A SaaS escrow arrangement is an agreement between the user(s) and the software provider.

  • The agreement establishes arrangements for the circumstances under which the software components will be made available to the user. Consider situations where the supplier can no longer fulfill (maintenance) agreements, such as bankruptcy.
  • These agreements define how the software will be continued in those cases, giving you enough time to take the necessary measures. Consider:
    • Setting up the application yourself
    • Migrating to an alternative
    • Continuation of the SaaS service by a different or new party

It is wise to also arrange for underlying services, such as hosting and third-party licensing, to be temporarily maintained. You can sign an additional agreement with those relevant service providers for that purpose: the continuity declaration.

Short- and long-term security

In escrow for SaaS, we distinguish between short-term and long-term securing of the application environment.

  • Short term: the user can temporarily continue the SaaS service and the application environment remains operational.
  • Long-term: the user can continue to maintain, modify and develop the application environment as part of their own business continuity.

What is the most suitable solution
for your situation?

Find out about the possibilities, we are happy to think along with you.