I got an email the other day from Escrow Associates, a provider of software escrow services that has just today announced the release of their SaaS software escrow agreement. For those not accustomed to escrow services, they are a contract where by the IP of a product is held by a third party and is released to the counter party in the contract if the owner of the IP goes out of business or cancels the product – in other words they guarantee ownership of data – be it user data, application data or integration data.
From their press release, Escrow Associates explains their SaaS escrow services by saying;
Access to data is the primary difference between SaaS and traditional source code escrow solutions. Historically, an end user had possession of their data and could find another application if their software vendor failed. With SaaS, the data is often hosted offsite, and is inaccessible if the vendor fails. Escrow Associates’ SaaS escrow agreement, however, provides for the data to be deposited and updated, so that the application and data are always available for release. This allows businesses to resume their vital operations quickly.
While not overly exciting, SaaS escrow services are becoming ever more important. Recently I posted about a new third party application providing granular user permissioning for a particular SaaS accounting application. My post caused something of a storm, the net result of which was users and influencers of SaaS accounting software balking at the fear of data loss and lack of security for the core application.
Others have noted escrow services as being valuable in the event that a vendor goes under, providing,as they do, certainty over data ownership. However there is a bigger issues with the ability of escrow services to cover the IP of a third party application and therefore give ongoing certainty around the functionality of a third party integration. As Escrow Associate points out;
Some agents make the process even simpler by ensuring the integrity and currency of the source code with software escrow verification services. In a SaaS environment, these testing services can also recreate the hosting environment and provide access for end user testing. These services protect both providers and subscribers, because they know that the escrow account contains useable code.
So the way I see it, escrow services can remove the issues people have around SaaS and third party integrations. Unfortunately what they can’t do is provide a foil to all the FUD being generated about it… oh well.
Update: Further discussion by Frank Scavo – the comments to his posts are worth reading, too.