I was reading a white paper from ThinkStrategies today about a new
service that offers to escrow technology from SaaS providers for their subscribers. Jeff Kaplan is the principle at ThinkStrategis and I’ve always found him pretty perceptive, but after reading the paper and thinking about this for a couple hourse I’m uncertain just how effective traditional code escrow can be for SaaS.

The concept behind putting the technology in escrow is simple; the supplier puts the source code and documentation into escrow and if the supplier ceases operation or fails in some significant obligation the customer can retrieve the code, build a functional system, and maintain the technology for themselves.

In practice, though, it’s never so simple. Despite the agreement it’s often necesary to sue before getting the code. Even in the bast of circomstances, it can take months. Plus, despite requirements that complete documentation and all needed compilers and libraries be escrowed with the code, the material recieved is almost always incomplete. Despite all that, I know of projects where it’s been invaluable.

Still, I can’t help feeling that SaaS represents a different situation for a few reasons.

First, with a traditional software license the customer has a running system to use during the time it takes to retrieve the code. With SaaS, however, the supplier’s hosting provider is likely to shutdown their systems so the customer will be without access to a functioning system for months.

Second, the customer has no experience running the system. Imagine Salesforce turning over their code to a customer; what’s the likelihood the customer could build a running system from it. Seems like a stretch for the typical customer and even for the largest subscribers I suspect it would take months.

Third, and possibly more importantly, the customer often isn’t in possesion of a current data set.

Even if the customer eventually get sthe code and manages to build a running system, the business impact could be catastrophic. Therefore, the value of a traditional escrow seems dubious at best for SaaS.

I think there’s a better way.

What customers really want isn’t the code, but simply continued access to functionality and data in the event the provider ceases operations. So, to determine a better solution let’s consider what happens when a SaaS provider declares bankruptcy? For starters, their assets, including servers are often frozen awaiting disposition. Their colo provider will deny them access to their facilities and may terminate internet access. In essence, the application and data are locked in limbo.

Utility computing provides a new opportunity for providing continuity to customers. Because applications aren’t bound to physcal assets any longer they can be migrated easily. Plus its a simple matter for someone other than the supplier to take over operation of the application. No escrow, no lawyers, no rebuilding, no reverting to backups. I need to spend a little more time thinking the details through, but I think there’s an opportunity to provide customers a better solution.