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The Evolution of Source Code Escrow for Hosted Applications

Published on 01/07/2024


Ensuring Business Continuity and Data Security

Cloud computing and SaaS (Software as a Service) dominate the software industry, businesses are more reliant than ever on third-party service providers for their critical applications. This reliance brings with it a heightened need for robust business continuity measures and data security. One of the essential tools that has evolved to meet these demands is the software escrow service. Originally focused on safeguarding source code, traditional software escrow has transformed into a more comprehensive SaaS escrow model, which includes both source code and application data.

Understanding Source Code Escrow

Source code escrow is a service where software developers deposit the source code of their applications with a neutral third-party agent. This ensures that the software licensee can access the source code if the developer is unable to maintain the software due to bankruptcy, failure to provide support, or other reasons. The primary aim is to mitigate risks and provide assurance that the software can continue to be used and maintained, thereby ensuring business continuity.

The Transition to SaaS and Cloud Computing

The shift towards SaaS and cloud-based solutions introduced new complexities regarding data security and service continuity. Unlike traditional on-premise software, SaaS applications are hosted on external servers and accessed via the internet, making both the software and the associated data critical to business operations. This dependency necessitated an evolved form of escrow—one that could protect not only the source code but also the application data and runtime environment.


Emergence of SaaS Escrow

SaaS escrow extends the traditional source code escrow model by addressing the specific needs of cloud-based applications. SES Escrow, a leading provider in this field, offers comprehensive SaaS escrow solutions designed to ensure that businesses can maintain continuity even if their service providers fail.

Key features of SaaS escrow include:

  • Source Code and Data Protection: SaaS escrow agreements secure both the source code and the current version of application data, ensuring uninterrupted access and functionality.
  • Regular Data Updates: SES regularly collects copies of application data and updates from the service provider, storing these securely alongside the source code. This ensures that the most recent versions are always available.
  • Platform Independence: SES’s SaaS escrow services are platform-agnostic, capable of integrating with major cloud providers such as AWS, Microsoft Azure, and Google Cloud Platform, thereby maximising data capture and redeployment capabilities. 
  • Disaster Recovery and Continuity: The Continuity 365 service guarantees rapid accessibility to hosted applications in the event of a provider’s failure, minimising downtime and financial loss.


Benefits of SaaS Escrow

The evolution from traditional source code escrow to SaaS escrow offers significant benefits:

  • Enhanced Security: Protecting both source code and application data provides comprehensive security against potential service disruptions.
  • Business Continuity: Ensuring access to the latest application data and runtime environment allows businesses to maintain operations without interruption.
  • Scalability: SaaS escrow solutions can scale to meet the needs of various businesses, from small enterprises to large multinational corporations.


Why Cloud Hosting Alone Isn't Enough

While cloud hosting providers offer significant benefits, including scalability, cost-efficiency, and ease of access, relying solely on them for business-critical applications comes with inherent risks. Here’s why cloud hosting doesn’t necessarily protect you from application failure:


  1. Provider Outages and Failures: Even the most reliable cloud service providers can experience outages or failures. For example, major providers like AWS, Google Cloud, and Microsoft Azure have all faced downtime incidents, impacting numerous businesses dependent on their services.
  2. Vendor Lock-in: Depending entirely on one cloud provider can lead to vendor lock-in, making it difficult and expensive to switch providers or recover your applications and data if the provider fails to meet your needs or goes out of business.
  3. Limited Control and Customisation: Cloud providers often offer standardized solutions that may not fully meet the specific needs of your business. Customizations can be limited, and you might not have full control over the infrastructure or data management practices.
  4. Data Security and Compliance: While cloud providers invest heavily in security, data breaches and compliance issues can still occur. Ensuring that your data is securely backed up and that you have control over your data is crucial for maintaining compliance with regulations like GDPR.

The Essential Role of Escrow

This is where SaaS escrow becomes essential. By incorporating SaaS escrow into your business continuity plan, you can mitigate these risks effectively:

  • Access to Source Code and Data: In the event of a cloud provider failure, SaaS escrow ensures that you have access to both the source code and the latest application data, allowing for uninterrupted service.
  • Independent Validation: Regular updates and independent validation of the source code and data ensure that what is held in escrow is accurate and complete, providing peace of mind that the application can be redeployed as needed.
  • Business Continuity Planning: SaaS escrow is a critical component of a comprehensive business continuity plan, ensuring that your business can recover quickly from disruptions caused by third-party failures.


The transition from traditional source code escrow to SaaS escrow reflects the broader technological shifts in the software industry. As businesses increasingly rely on cloud-based solutions, the need for robust, comprehensive escrow services that ensure both source code and data continuity has become critical. SES Escrow's innovative solutions exemplify how escrow services have adapted to meet these new challenges, providing businesses with the security and continuity they need to thrive in a dynamic technological landscape

For a comprehensive understanding of our offerings and to discuss tailored solutions for your firm, get in touch with our Commercial Escrow Specialist, Darragh Lavin at [email protected] 


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