What is SaaS Escrow and Why You Need It: A Comprehensive Overview
Written by Jo Rust | Published on March 23, 2023
SaaS (Software as a Service) escrow is a process of placing software source code into an escrow account for safekeeping. The purpose of SaaS escrow is to provide assurance to SaaS users that their important data and software will be secure even if the SaaS provider goes out of business, fails to maintain the software, or experiences other difficulties.
SaaS escrow is becoming increasingly popular as more and more businesses rely on SaaS to store and manage their critical data. Many organizations are concerned about the risks associated with entrusting their data to third-party SaaS providers, and SaaS escrow can help to mitigate these risks.
SaaS escrow is typically managed by a neutral third-party software escrow agent like Codekeeper. The escrow agent acts as an intermediary between the SaaS provider and the SaaS user, ensuring that all conditions are met before releasing the software. The SaaS provider is responsible for depositing the software source code into the escrow account, and the SaaS user is responsible for paying the escrow agent a fee for their services.
The most common reasons for you to invest in SaaS escrow include:
Ensuring your business continuity: In the event that an unforeseen event or disaster occurs, SaaS escrow helps ensure that the business-critical software your company utilizes through a 3rd party provider is made available to you so your business can keep operating as per usual.
Protection against software abandonment: If the SaaS provider goes out of business or otherwise fails to maintain the software, the SaaS user will have access to the software source code in the escrow account. This can help to minimize the impact on the SaaS user and reduce the risk of losing their data and software.
Protection against data loss: SaaS escrow helps to ensure that the SaaS user's data will be secure even if the SaaS provider experiences data loss. The escrow agent can release the software source code to the SaaS user in the event of data loss, allowing them to access their data and recover their software.
Protection against intellectual property disputes: SaaS escrow can help to resolve disputes between the SaaS provider and the SaaS user over ownership of the software. The escrow agent can hold the software source code in escrow until the dispute is resolved, ensuring that the SaaS user has access to the software in the meantime.
Protection against unauthorized access: SaaS escrow helps to ensure that the SaaS user's data and software will not be accessed by unauthorized parties. The escrow agent can release the software source code to the SaaS user in the event of unauthorized access, helping to protect their data and software.
Compliance with regulations: SaaS escrow can help SaaS users to comply with regulations such as GDPR and HIPAA, which require that data be stored securely and that access to data be controlled. By placing the software source code into an escrow account, SaaS users can help to ensure that their data will be secure even if the SaaS provider experiences difficulties.
SaaS escrow is an important tool for organizations that rely on SaaS to store and manage their critical data. By providing protection against software abandonment, data loss, intellectual property disputes, unauthorized access, and compliance with regulations, SaaS escrow can help to reduce the risks associated with SaaS and improve the security of critical data.
If you are looking to invest in SaaS escrow, we’re here to help. Simply click here to set up a demo call with one of our experts who will happily answer any questions you may have.
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