"Escrow can mitigate SaaS dangers in financial sector"

11/06/2009 00:00:00

NCC Group plc, Europe’s leading software escrow provider, is advising financial services organisations to protect against unexpected downtime, data loss and data inaccuracies by initiating Software-as-a-Service (SaaS) Escrow agreements with their providers.

Uptake of SaaS in the financial sector has been rapid and widespread, with businesses attracted by the model’s cost and time saving benefits. However, confusion over contractual obligations or intentional contract omissions from the provider to avoid heightened responsibility can expose companies to business continuity problems, which could seriously impact business-critical functions.

Escrow can mitigate the risk of applications becoming unavailable should suppliers become unable or unwilling to release essential software source code in the event of contractual issues, business disagreements or supplier insolvency.

Jon Leigh , Escrow Director at NCC Group plc, comments: “The consequences of losing access to a business-critical application are magnified when the application and end user data are stored elsewhere, as with SaaS. An extended or permanent outage not only removes the user’s ability to support the application in the event of an error; it prevents them from accessing the application, its platform and their data altogether. The effects are immediate and can cause serious damage to an organisation. The SaaS model’s popularity amongst financial services companies is well founded, but they need to be protected.”
Under the terms of an escrow agreement, the escrow provider securely holds a copy of the application executables, end user data and source code on behalf of the financial services organisation with the agreement of the SaaS supplier. The information held is updated at regular intervals with the agreement of the SaaS provider to ensure that the deposit held is up to date and reflects the latest version of the application. Should the worst happen, the escrow provider can legally release the material so that the end user organisation can source an alternative infrastructure and continue operations with minimal disruption to their business.

Leigh says: “It is essential in any business relationship, especially during a recession, for a provider to instil confidence in its customers, and SaaS providers are becoming aware of this. If they are unwilling to appease a company which is keen to secure access to a critical application should it become unavailable, it’s probably time for the business to look elsewhere. At NCC Group, we’re working with SaaS providers to help further strengthen their reputations and the business continuity strategies of their clients.

“For financial sector businesses who are already in the firing line, losing essential software could mean the end of the road. SaaS Escrow should be considered as an essential facet of a wider disaster recovery strategy.”

Press contact: Dave Lafferty @ MC2 (0161 236 1352)

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