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Cloud and SaaS Escrow agreements

February 22, 2013

There are many uses for software escrow agreement when organisations license server based applications from software authors on traditional licensing models. These escrow agreements protect the user in the event of supplier failure by providing a copy of the source code that enables the user to support and maintain the solution.

The SaaS model of application delivery does not change the fundamental conditions of an escrow agreement but changes the way that the material is deposited. There are two trains of thought when depositing material and it really is up to the client to decide which is the most appropriate for the business continuity and disaster recovery strategy they have chosen to implement.

  • Material Deposit 1

The owner of the software deposits a copy of the application/service source code, the operational component’s, hardware specification and any other documentation that they think the user may need to recreate the application or service with a new supplier or a new host environment in the event of a release.

  • Material Deposit 2

The owner of the software application or service deposits a Virtual Machine Image of the host environment that contains a copy of the source code and all other installation tools required for the deployment of the application. This option also enables the escrow agent to perform some relatively simple tests to compile the source in the VM to prove the deposit is complete.

This is a very simple example of the changing face of software escrow and how we are meeting the changing needs of businesses that use mission critical applications.

Software escrow is a simple idea that can be adapted to meet the needs of supplier and users of software applications, nothing is set in stone and you can pretty much do anything you need to meet the needs of your clients.

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written by David Clee

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