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Technology escrow has been relied upon as the primary form of third-party risk management during software licensing negotiations for the past 30 years. In order for an end user to sign a software license agreement (SLA) it was commonplace for a business to ask the software provider to store their source code with an independent third party. This source code would be released to the beneficiary of the escrow agreement, if the software provider failed to meet the requirements laid out in the SLA. This would allow the beneficiary to continue to use the software and make updates to the application installed on the beneficiary’s infrastructure independently of the software provider.
Under a SaaS relationship, where the vendor provides hosted access to the application, whose responsibility is it to manage supply chain risk? The software is no longer hosted on the end user’s infrastructure, so it’s completely acceptable to expect a SaaS provider to ensure appropriate disaster recovery measures, co-location and secondary sites. Yet, what if the SaaS provider fails to make payments to the infrastructure provider due to insolvency or other issues? This Briefing aims to educate the audience on the increased need for an escrow solution in a SaaS setting, considering the differences between on-premise software and SaaS third party risk, Thus, we shift the narrative of third party risk management from being able to continue to modify software, to a continuation of service, involving infrastructure availability, data backups and application functionality.
Join James Gibbs, Business Development Manager, NCC Group Escrow Associates, LLC and John Pavolotsky of Stoel Rives LLP as they discuss, among other things:
- Traditional third-party technology escrow and its application (5 minutes)
- On-premise vs SaaS deployment models (10 minutes)
- SaaS escrow: what is it, why you need it, how it works (20 minutes)
- Case study (5 minutes)
- SaaS Escrow Agreements: key issues and depositor/beneficiary concerns (20 minutes)
Program Level: Overview
Advanced Preparation: None