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“Our Suppliers Will Never Go Out Of Business…”

Published on 12/06/2018

It’s easy to discount Escrow without fully considering the risks of not protecting your most critical applications. If you were unable to access your CRM, Logistics or Finance applications, what would the implications be to your business?

Unfortunately, there are no organisations (End User or Software Developer) which are immune from market forces. No matter the industry, size, market share or even media coverage all companies are susceptible.

A prime example of Software Developers suffering from the impact of market forces is the case of 2e2 Limited. 2e2 provided system integration and data centre facilities for 1000’s of global brands including Vodafone, NHS Trust, Citigroup, O2 and Kellogg’s, yet entered into voluntary liquidation in 2013. Following liquidation, 2e2’s administrators asked 2e2s customers for nearly £1m in funding, in order to retain uninterrupted services and access to their data centre facilities.

Although in this instance 2e2’s customers did have the option to continue using their application (although they had to pay) this is a rare occurrence. In the majority of instances, when your software vendor goes out of business you lose access to the application and your data, in many cases, permanently.

If 2e2’s customers had a Software Escrow agreement in place, they would have been able to legally access a copy of the source code (as well as potentially their data, a runtime, version, install version and a runtime report on how to rebuild it etc.) for the applications provided by 2e2, enabling them to maintain their services and operations going forward and without having to pay the large fees to the administrators in order to retain access.

For End Users using applications delivered through a SaaS model, the impact of Developer failure is much more immediate than if you were using standard, on premise applications. In many cases, the first indication of a problem with your supplier will be a complete withdrawal of service and access to your data.

Setting up Escrow protection will help you minimise the impact of vendor failure and safeguard your business. In the event your developer is no longer able to support your application, your Escrow agent will release everything you need to continue using and maintaining the application to the point a suitable replacement is procured. This limits the severity of vendor failure and provides continuity for your organisation.

SES also offers various testing options, including the ability to record and document the entire build process, ensuring your application can be rebuilt swiftly and accurately in the event of a release. This further reduces the impact of vendor failure and ensures minimal disruption to your business.

If you would like to find out more about how SES’s Escrow solutions can protect your business,  please get in touch and one of our specialists will get back to you within one business day. 

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