The Difference Between Software & SaaS Escrow Solutions

Software as a Service (SaaS) escrow and software escrow solutions are two distinct yet related concepts in the software industry. While both provide a form of protection for users of business critical software, there are fundamental differences between the two. This article aims to explain the differences between SaaS escrow and software escrow.

To begin with, software escrow is a legal agreement between the software developer, the user, and a third-party escrow agent. The agreement allows the user to access the source code of the software in the event that the software developer is unable to provide support, maintenance, or updates for the software. In contrast, SaaS escrow is an agreement that provides protection to users who subscribe to a SaaS provider. The agreement ensures that the SaaS provider’s software and data are accessible to the user, in the event that the provider is unable to provide access to the software, so that the user can continue to use the SaaS application.

Another difference between the two is the type of software involved. Software escrow primarily deals with standalone software applications that are installed on the user’s computer. The software is typically owned by the user, who licenses it from the developer. In contrast, SaaS escrow deals with software that is hosted by the provider and accessed over the internet. The user does not own the software but rather subscribes to the provider’s services.

The release conditions for the two types of escrow are also different. With software escrow, the source code is released to the user when certain predetermined events occur, such as the developer going bankrupt or discontinuing support for the software. With SaaS escrow, the user is granted access to the provider’s software and data when specific conditions are met, such as the provider experiencing a significant outage or data loss.

Modern SaaS escrow solutions often include data backups as well as a tested and running recovery site to serve as a failover for the end user to avoid significant downtime in the event of developer failure. 

In conclusion, while both SaaS escrow and software escrow provide protection to software users, they differ significantly in terms of the type of software involved, the deposit materials required for continuity, the release conditions, and the role of the escrow agent. It is crucial for software users to understand these differences to make informed decisions when considering software escrow or SaaS escrow agreements.

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