SaaS subscribers may be unaware that they are in the path of the perfect storm. Today’s massive economic crisis has collided with the allure of new software delivery models, putting many businesses at risk.

Delivery models like cloud computing and Software as a Service (SaaS) are here to stay. In fact, Gartner says the SaaS market is expected to more than double, with revenue reaching $14.8 billion in 2012. These models’ promises of lower cost ownership and quicker time to deployment are certainly attractive to any business.

But, add today’s economic climate to the mix and those promises are quickly broken. Rampant vendor consolidation, mergers, business insolvencies, contractual issues, and business disagreements can result in the loss of application functionality and access to all of the SaaS subscribers proprietary data. As we all know, this can happen whether you’re working with start-ups or industry leaders.

That’s why Forrester analyst Liz Herbert advises companies to make sure their legal team is “involved in SaaS negotiations as SaaS contracts today are more like marriages than experimental flings.”

Technology escrow can protect SaaS subscribers from this storm – as long as the escrow technology takes the cloud computing/SaaS paradigm into account. According to a recent ThinkStrategies white paper, “This means employing escrow services that can not only store and secure valuable source code, but also continuously track changes, allow inspection of the real-time version of the source code and ultimately ensure that the source code can be built into an up-to-date, working version of the software.”

InnovaSafe Technology Escrow technology can help protect subscribers from today’s cloud computing pitfalls. InnovaSafe’s Dynamic Escrow Solution, using patent-pending technology, allows the solution provider to set up a secure, central repository for source code and mission-critical data that can be updated in a secure manner and on regular basis. Version control features keep track of changes and give the solution provider the ability to roll forward or backward to the version of their choice. Plus, detailed content and activity reports provide an accurate view of repository functions.

To learn more about how this technology can help you, contact us today at info@innovasafe.com for a free consultation. We look forward to explaining how our technology can help you weather the perfect storm.

SaaS applications are becoming more and more common. With a SaaS solution, the software supplier hosts the software and stores client’s data on its web servers or leased servers. The requirement for a technology escrow agreement is important because the source code, object code and access to the client data are controlled by the software supplier.

On Dec 18, 2006, Forrester Research announced an Enterprise Software Licensee’s Bill of Rights (the LBoR). While it is nothing like the Founding Fathers’ declaration of rights, Forrester boldly proclaimed that licensees need certain rights to free themselves from “onerous [software] ownership restrictions.” For example, enterprise software can be one of a company’s largest investments, subscribers of SaaS applications, like distributed applications, have constraints on how they may use the application. For example, unilateral modification and or maintenance of the software are generally not permitted without the software vendor’s approval. It is simple business that a supplier, who owns the IP, is more than justified in charging its customers a reasonable fee for the use as well as the modification of the application. That is the sole purpose of business and we all understand and appreciate it. However, over time as the customer invests more time and money in training its staff to use the software solution and it buys equipment and develops expertise in using the software solution to take care of its customers, it creates enormous asset value for its own account. This investment could easily equal or outspend the annual licensing and or maintenance fees the customer pays for the use of the software. All things being equal, software suppliers encourage such activity and in deed have a vested interest in the success of its subscriber customers in the use of the application. In fact, software suppliers want nothing more than their subscribers to effectively use the software application in furtherance of their own business success. This creates a successful long term business relationship.

Ray Wang, the Forrester analyst who is one of the authors of the LBoR, mentioned above, talks about a “slow shift” in the pendulum in favor of the licensee with “new deployment options” such as SaaS. For this reason, plus because of increasing vendor consolidation during this, the Great Recession, on July 7, 2009 Forrester added 11 more items to its LBoR. Based on discussions with CIOs, business process and apps professionals, systems architects and IT licensing experts, Forrester concluded SaaS vendors should provide their customers with software and database escrow protection from a reputable, established escrow agent. Forrester says the [technology] escrow company should keep in trust a copy of the source code, the customer’s databases, object code and related material to reproduce the SaaS environment in the event the SaaS vendor fails to provide services at the contracted level or worse, goes out of business.

And why not? Think about it. Having a reasonable and balanced technology escrow agreement already in place assists the SaaS provider in numerous ways. For example, (1) it address its customer’s immediate and real concerns about being totally dependent on the vendor, (2) it cements a business relationship based on trust and (3) assists the provider in adding a new client.

Conversely, the same technology escrow agreement assists the provider’s customer because the supplier, its IP, subscribers’ databases, maintenance activity, data center operations and virtually every significant function associated with using an application, resides with the vendor and should a pre-determined event occur that may require release of the intellectual property, a properly drafted technology escrow agreement gives the subscriber access to critical information in a reasonable time period to keep the solution running and allow the subscriber to avert its own disaster.

Technology escrow is a modestly priced protection tool that helps subscribers’ mitigate the risk of total reliance on a single supplier for a vital business function and a technology escrow helps SaaS vendors close more deals and do more business. Its win-win.
Your thoughts?

Dear Visitor,

This is our first InnovaSafe blog. We’re very excited to finally get it started.

InnovaSafe Technology Escrow Services is happy to announce the start of its ninth year in business. I am extremely proud of the company and what we have grown into. We have stayed the course and held fast to our mission: “Surpass and Supply – to surpass clients’ expectations and supply clients with outstanding service”. We provide leadership in our industry and we provide our clients with the service and devotion that they demand and deserve. We may be the third largest in our industry in terms of quantity, but we’re the first largest in terms in of quality.

We have learned many lessons building of this business. The consistently positive feedback that we receive from our clients and their attorneys that use our services strengthens our commitment to provide superior, cost effective products in a professional manner.

InnovaSafe offers the following services:

• Source Code escrow
• Software escrow
• Technology escrow
• SaaS escrow
• Asset based lending escrow
• Trade secret escrow
• Custodial escrow
• Cloud escrow
• Litigation discovery assistance
• Secure inspection of source code
• Verification of software
• Verification of hardware
• Tier III data facility for business continuity

We serve thousands of clients globally and pride ourselves with the loyalty they show to us by referring others and repeatedly seeking our advice and help.

The intent of this blog is to educate and inform you with straight information. Some of our products have an element of complexity. We will explain how they work; when and how they add value to you, and when they do not. The common denominator for every one is the trust our customers have in us that we will meet both the letter and spirit of promises we make. We welcome your comments and look forward to a relationship that brings us both more prosperity.