Welcome to All Things IP!

Posted on Posted in Announcements

This blog is a place to discuss any and all things related to intellectual property.

Change is inevitable and the intellectual property that drives change is powerful.  Every day we see and experience something new that intellectual property created which was implemented and or litigated upon.

This is a online community where we can share ideas and communicate about topics that pertain to All Things IP!

SaaS Escrow – Don’t be Caught “Dead in the Water”

Posted on Posted in Technology Escrow

Do you want to avoid being caught “dead in the water”!

Providers, subscribers and legal counsel are all well aware of the benefits and burdens that surround implementation and use of SaaS applications for mission critical requirements. Disaster can strike in any number of ways and the need for a risk mitigation tool such as SaaS Escrow is more important for SaaS application than it is for a distributed (non-hosted) application.

There are several reasons:

Application Access: Imagine is the lights really went out.  When lights shut off with a SaaS application the disaster is immediate and swift. Unlike a distributed application where the customer has access to the application and their data when a SaaS customer is denied access they are dead in the water.

Data Access:  Picture trying to switch vendors during a calm period?Switching vendors is never a simple process, what would it be like if you had zero days due to a failure? Do you have your data? If not, where does it reside and how do you get it? Will you get it in a usable format for migration to a new provider? Can you find a new provider quickly? All this takes time, costs money and does not avoid disaster.

Code Access: Subscribers who wish to access the run time environment must have the object code, source code and the data.

Hosting: If disaster strikes and you have a SaaS Escrow agreement in place will you host the application?

Business Continuity:  Remember, in order to avoid a disaster you need to have plan, test your plan, and test that plan yet again.  A good insurance plan comes in more than one form.

SaaS Escrow, testing and back-up hosting should be part of the disaster plan because it’s simple, because it’s cost effective and because it makes good business sense. InnovaSafe, a SOC2 Type II Compliant technology escrow service provider can provide you with all these solutions.

Technical Verification

Posted on Posted in Technology Escrow

With source code escrow (SCE), a developer gives assurance to its licensee that business-critical software will be maintained by the developer or, if necessary by the licensee, using the source code and related materials the developer deposits (the Deposit Materials) with InnovaSafe. (We make the Deposit available upon a developer’s written instructions.) Because it is one of their most valuable assets, no developer puts source code in escrow unless he or she is confident in their commitment to maintain the application.

SCE is a form of insurance. It compensates the “policyholder” (licensee) for a loss. Instead of paying cash to settle a claim as an insurer would for profits lost due to business interruption, InnovaSafe releases the Deposit Materials, after the developer’s failure to maintain, to enable a licensee to maintain the software to prevent business interruption.

Insurance and SCE help manage risk. They do not reduce it. For example, no company would ever conclude that because they have business interruption insurance, they can do without data recovery procedures. That would be insane. It is cheaper to reduce the risk of business interruption by paying for redundant systems, including a duplicate data center, then paying the insurance premium and picking up a claim check for “lost profits.”

Yet, this is exactly what licensees do with SCE, telling themselves, in effect, “If the developer doesn’t maintain the application, I can have access to and use the source code.” But, risk reduction is just beginning.

Enter technical verification of Deposit Materials. It is a process where InnovaSafe with the assistance of the developer, both acting to benefit the licensee, to ensure that the Deposit can be assembled, compiled, and built into executable programs and is usable if the Deposit Materials are ever released to the licensee (Beneficiary). Generally speaking, the party requesting the verification pays for the verification and the cost for this service is small as compared to the cost of reducing the risk of business interruption.

Is there a need for technical verification? You bet there is. An industry axiom says that around 90% of Deposits are incomplete, because they are complex, not because of anything a developer does intentionally.

Here’s a thought. What would the marketplace for business-critical software look like if a developer included a technically verified SCE in its standard offer to its customers? For example, would it cut a SaaS vendor out of the herd? Think about it.

Your comments?

Cloud Computing and the Need for Technology Escrow

Posted on Posted in Cloud Computing, Technology Escrow

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: should software and/or database escrow be a mandatory requirement when using a Software as a Service application?”

Posted on Posted in Technology Escrow

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?